Cleantech Market Intelligence
With Datsun Revival, Nissan Stays the Course
Recent press articles have made much of a Nissan announcement that it plans to bring back the Datsun brand, with a $3,000 vehicle for emerging markets. Car buyers in Europe and the United States wondered if something similar was coming to their markets. The answer to that is quite simply no, not possible. The main reason that such a vehicle will only be available in markets such as India, Russia, and Indonesia is that those countries have fewer rules and regulations about car specifications. China used to be like that, but has tightened up in recent years, partly to try to slow down the growth in car sales to allow the infrastructure to catch up, especially in cities.
Buyers in mature markets such as Western Europe, North America, and Japan have certain expectations for a new vehicle regarding its comfort and performance, and increasingly they expect premium sound systems and navigation systems as well as power everything. Automatic gearboxes have been pretty much standard in North America for decades, and as the technology gets more sophisticated they are catching on in Europe and the developed regions in Asia Pacific. National and regional governments impose stringent safety and emission targets, all of which require enhancements that cost money. Airbags are a major expense, as are exhaust after-treatments such as catalytic converters and particulate filters.
So if business can be done by going back to making simple, basic transportation why not give it a go? It’s been successful for Tata, in India, with its Nano vehicle. In many emerging countries, a basic, well-made car is a big step up from ancient two-wheel vehicles or even carts pulled by animals. As wealth spreads, the demand for simple transport will be strong in these countries that are not ready for hybrid or electric technology.
Some criticism has been leveled at Nissan management for this move, implying that it is a panic reaction to the weak sales of electric vehicles that have been supported by billions of dollars of investment in recent years. But Nissan’s partner Renault has been in the basic vehicle business for many years, since taking over Romanian manufacturer Dacia in 1999. And the basic Dacia models are proving popular in today’s sluggish European economies. The Paris Motor Show highlighted Dacia’s expansion in the U.K. market.
So Nissan is not changing course by bringing back the Datsun brand. It’s growing its volume products at the low end of newer markets while continuing its push to persuade mature markets that electric vehicles are where the future lies. (This month Volkswagen announced it will pursue a similar subbrand strategy.) With most of the growth expected to be concentrated in the emerging market countries for the next few years, that seems like a sensible strategy.