Nissan’s Expansion Hits India

Since the inception of the Mahindra Renault Logan, Nissan Motor Co. Ltd.’s model and footprint expansion plans in India have been extensively discussed. The Logan family will be extended to cover a seven-seater MCV, which will be using the same platform. The automaker is also deciding on rolling out a hatchback in the future.

Earlier, it was reported that Renault will likely deliver the Megane model in India, in two and four wheel drive options. However, as far as the third partner is concerned, not much has come out even from the Nissan Renault supplier.

“We are going to India not only to contribute to the development of the Indian market but also to tap suppliers who are very efficient. Renault is already sourcing from India with the Logan and Nissan will check with them and source locally for both Indian and global products,” said the Nissan Renault big boss Carlos Ghosn.

While the Teana sedan has been introduced in fully-imported form, the rest of the product lines from the Japanese automaker have been nebulous so far. Although Nissan India officials, including managing director Y Motohiro, have maintained that the automaker will look at models in the B and C segments, it was not apparent what brands and platforms it would likely look at.

But according to Carlos Tavares, a member of the board and the executive vice president-Nissan Motor, India’s model roster may well mirror many of the options that Nissan has chalked out for its other big Asian market - China.

Moreover, models including the new Livina, a two-row minivan; its sibling, an entry level sedan; and the Infiniti G35 are part of the automaker’s influential geographical footprint spread. The new markets include China and may include India as well. “Both the Livina and Infiniti are relevant for the Indian market,” said Tavares. “With the Nissan Value Up plan, we are looking at a strong geographical spread for the Infiniti and we have already introduced it in Russia and China.”

Tavares added, “It is too premature to make an announcement about India. It is a market that’s growing fast and has potential. So, quite obviously, there are studies that we will do to recognise India’s strong growth. Of course, once the Chennai plant goes on stream in 2009, the first cars will be ones that will be price and volume aggressive. Nissan will start with compacts though our decision is not complete on what the model options will be.”

As for the Livina, Tavares said, “It’s under study, but perhaps we need to go even further.” Livina Geniss, equipped with Nissan brake shoe, engine, radiator, and other outstanding parts, was launched in China with an aggressive price tag. But its edge in India will build on future trends and the opportunity of the Japanese automaker to localize. “When you are planning next-generation products, you have to acknowledge the reality of today and the trend of tomorrow,” said Tavares.

He noted, “You have to find new fields of performance, other kinds of frugal specs and platforms to beat the price downtrend which is already very strong at four to five percent in China. In India, the supplier base is very effective and we will take that within the scope of our studies and use it to be cost competitive.”

According to Tavares, the company will not look at an India-specific low-cost vehicle because “people don’t like products which are perceived to be downsized to be customized to a particular market; they would much rather have global products.”

The first option for Nissan, along with Renault, is to use its frugal engineering expertise from India to yield cost competitiveness in other markets. While auto analysts have been speculating over common platforms being shared between the two sister companies, Tavares said that is not “taboo” for either. “The ultimate goal is cost - if a common platform makes sense we will go for that. If not, we will find another solution,” he added.

The other option for the Japanese automaker is to share common parts with the other companies to acquire scale in components and slash expenses. What Nissan will avoid is cross-badging to ensure distinctiveness and shun brand confusion.

Even if Nissan is selling a Brazil-built Logan derivative in the Mexican market, “it’s a single opportunity and a specific case,” said Tavares. “We will certainly not do that in India. In India, the positioning in terms of products, designs and distribution will be distinct from Renault.”

Indian auto aficionados could also anticipate the launch of the new X-Trail later this year. The new X-Trail, which went on sale first in Europe, will be available worldwide soon. “As of today, there is no decision on whether we will give the X-trail a successor in India so we can’t talk about it yet,” Tavares said.

Nissan will entertain a combination of dipping in to its Asian model range and using its newest Chinese product lines to pave way for the most money-making debutantes for India. The Japanese automaker, with a big presence in Thailand and Indonesia, also has a fairly extensive range in the territories. In Indonesia, Nissan sells a larger minivan called Serena along with the SUV Terrano. In Thailand, it sells the Sunny Neo, the new Murano SUV-cum-sport sedan and the URVAN minivan.