Nissan Leaf electric car coming to India; Check what Thomas Kuehl has to say about car-maker's strategy

Japanese carmaker Nissan Motors, which has had a tough time in India so far, except for some success of its subsidiary brand Datsun, now wants to focus on pushing the parent brand in the country.

According to the company executives, the strategy would also involve introducing the company's global products in India, including electric car Nissan Leaf. The company management expects KICKS to lead in garnering volumes. Image Source: Reuters

Japanese carmaker Nissan Motors, which has had a tough time in India so far, except for some success of its subsidiary brand Datsun, now wants to focus on pushing the parent brand in the country.

Thomas Kuehl, president, Nissan India Operations told DNA Money at the unveiling of KICKS car, "In the past, we had a little bit dip of Nissan lifecycle management. In the last four years, we were focused on launching Datsun. Now, the strategy we have is that of having a clear production and launches in a proper cycle."

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On the other hand, Datsun, which has REDI-GO, GO and GO+ in its kitty, will have its distinctive strategy separate from Nissan. Datsun now forms around 70% of total sales of Nissan India. Further, Nissan is aggressively working to double the number of dealers, especially in Tier-2 and 3 cities.

However, the experts remain sceptical as the company has made several efforts in the past to push its sales but without much success. As a result, the company continues to shift the goal post for 5% market share in India. Now, the target is to reach there by 2021. On a global level, the company is aiming a 30% increase in annualised revenues to 16.5 trillion yen by the end of fiscal 2022, along with the cumulative free cash flow of 2.5 trillion yen.

The insiders claim the first major shift in Nissan's strategy happened in 2015, when it decided to focus more on the domestic market so as to bring more parity with exports in the next five years. However, its domestic market share fell to 1.6% in FY18 from 1.8% during FY2015. Further, exports, which were their strength began to decline, with the company dropping to sixth position in passenger vehicle category in fiscal 2018 from second position earlier.

Stagnant product portfolio, frequent changes and resignations of some key executives led to dealers' exodus with around leaving or being terminated, leading to long legal battle, the insiders said. Now, the company is trying to double its retail showrooms in three years from 270 dealers at present.

Kuehl, who has been meeting with the dealers to apprise them of his strategies, said that a lot has changed in India at since the time of his last stint here when he was brand head of Skoda India. With regard to dealerships, Kuehl said earlier people thought that they can put some money (into dealerships) and then make some money, though they may not have any definite plans for it. "However, things are different now," he said.

Asked why Nissan has not been able to make a mark in the Indian market while the likes of Hyundai have been successful, Kuehl said every challenger company except two are struggling. "In fact, there is only one brand, Maruti Suzuki, which made the perfection of offering right product and price strategy. While I should not mention others (Maruti Suzuki), they did that and you have to give it to them," he said.

Kuehl denied that Nissan will get into MPV segment, as it's not a growing segment. " It's practically dominated by just one brand (Toyota Innova) and it's mostly institutional," he said. An analyst with a global consulting firm said that though Nissan still has a good perception in the India market, it will have to work a lot in getting its strategy and product right. " The after-sales service needs a push, too," the analyst said.

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Datsun, which has REDI-GO, GO and GO+, will have its distinctive strategy separate from Nissan

Nissan is aggressively working to double the number of dealers, especially in Tier-2 and 3 cities

Source: DNA Money

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