Nissan revives Datsun brand to boost sales in emerging markets

Nissan Motor Co Ltd will add two Datsun models every year in Russia, India and Indonesia, said Carlos Ghosn, president and chief executive officer of the Yokohama, Japan-based carmaker. [Junko Kimura / Bloomberg]

Nissan Motor Co Ltd, Japan's second-biggest automaker, will revive its Datsun brand after three decades to increase sales in emerging markets.

Nissan will add two Datsun models every year in Russia, India and Indonesia, the Yokohama, Japan-based carmaker said in a statement on Wednesday.

The brand, phased out in 1981, will account for as much as half the company's sales in those markets by March 2017, it said.

Chief Executive Officer Carlos Ghosn expects the revived brand to help widen Nissan's reach to target more customers in countries such as India, Russia and Indonesia, where it will introduce the Datsun cars from 2014.

Nissan's third global brand will help the company compete against rivals such as Maruti Suzuki India Ltd in India and Toyota Motor Corp in Indonesia, according to Ammar Master, an analyst at LMC Automotive in Bangkok.

"Datsun could bring in volumes at the lower end of the market, ... while the Nissan brand will continue to move upmarket," said Master.

Nissan last year said the carmaker aims to increase its share of the global car market to 8 percent by the year ending March 2017, from 5.8 percent in the year ended March 31, 2011.

The company had said at that time it will introduce 51 new models, capture a larger share of the luxury-car market and increase sales in emerging economies.

'Specific incentives'

"Every country has its own specific incentives to encourage people that are riding motorcycles or riding used cars to move to a new car," Ghosn said on Wednesday in Yokohama, Japan.

"We don't want to have a product that fits all needs," he said.

Nissan shares fell 2.9 percent to close at 865 yen ($10.31) in Tokyo trading, the biggest drop since Nov 21. The benchmark Nikkei 225 Stock Average declined 0.6 percent.

In India, Nissan's lowest-priced car is the Micra compact hatchback that starts from 421,765 rupees ($8,360). The company competes with Maruti Suzuki and Hyundai Motor Co in Asia's third-biggest car market.

Low-end competition

Maruti Suzuki, India's biggest automaker, derives the majority of its sales from the mini-car segment that includes cars with 1 liter engines and span no longer than 3.6 meters. The New-Delhi based unit of Suzuki Motor Corp offers its best- selling Alto model from 240,352 rupees. In October, Hyundai added its cheapest model, the Eon, priced from 269,999 rupees, to compete with Maruti in this segment.

Compacts and mini-cars accounted for more than 75 percent of total passenger-car sales in the nation in the 11 months ended February, according to data released by the Society of Indian Automobile Manufacturers. Maruti had 42 percent of the total Indian passenger-car market while Hyundai had 19 percent and Nissan 1.5 percent, according to data from the group.

Vehicle sales in Indonesia are projected to rise more than 50 percent in five years as the growing working class demands minivans and compact cars. Nissan expects industrywide sales to double in Indonesia by 2017, it said.

CLSA Asia-Pacific Markets estimates Indonesia had 32 vehicles for every 1,000 people in 2010, compared with 123 in Thailand and 300 in Malaysia. Indonesia's economy and population are bigger than those two Southeast Asian neighbors combined.

Bloomberg News in Tokyo and Mumbai, India