Nissan to unveil Datsun in India in cheap-car push

Sun Jul 14, 2013 12:09am EDT
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By Norihiko Shirouzu and Aradhana Aravindan

BEIJING/MUMBAI (Reuters) - Nissan Motor Co (7201.T: Quote) takes the veil off the first car in its resurrected Datsun brand in New Delhi on Monday - a sub-400,000-rupee ($6,700) hatchback that is part of a foray by the Japanese auto maker into cheap cars for emerging markets.

With the Datsun hatchback and other Datsun models to follow over the next three years - one of which could be priced as low as $4,000 (240,000 rupees) if Nissan can meet its aggressive manufacturing cost objectives - Nissan is treading ever so closer to the ultra-low-cost car market.

That market in India is now famously occupied by the Tata Nano, a barebones car that retails for between 150,000 and 220,000 rupees.

"We try to keep the price positioning for Datsun competitive, so that products are appealing" to the lower half of the auto market in India where Nissan has few products competing today, Nissan's program director for Datsun, Ashwani Gupta, told Reuters in an interview.

It is a move that has been generally resisted so far by other global auto giants, such as Toyota Motor Corp.(7203.T: Quote), out of concern a scruffy, ultra-cheap car model could tarnish their high-value brands.

Top Toyota executives, including current chairman Takeshi Uchiyamada, rejected a chief engineer's design for a low-cost emerging market car several years ago, saying it was too cheap to be called a Toyota, an engineering executive said.

The car has since undergone some design iterations and was finally launched in India in 2010 as the Toyota Etios sedan, which starts at 545,000 rupees. A hatchback version of the car, launched in 2011, starts at about 450,000 rupees.

Since Nissan plans to market Datsun cars in India through its existing Nissan-branded dealerships, Datsun could expose the Japanese auto maker to similar risks, though executives downplay the possibility.   Continued...

Nissan's logo is seen in a dealer in Jakarta February 14, 2013. REUTERS/Enny Nuraheni