In India, a diminished Nissan bets massive on a small SUV

The Nissan Magnite Idea SUV will be seen. (Photograph: Reuters)

NEW DELHI: By any measure, Nissan Motor Co Ltd has had a dreadful run in India. A push to revive its lower-end Datsun model flopped, gross sales have slumped 60% over the previous 5 years and its sole plant within the nation is working method under capability.
However the amount of cash and power that Nissan – battered by scandal and anticipating a document $4.5 billion annual working loss – will spend to show its fortunes round in India will hinge on the gross sales of 1 car, its new Magnite compact SUV, three sources with information of the matter advised Reuters.
The SUV might also decide how a lot heft Nissan will wield because it and alliance accomplice Renault SA thrash out their respective roles within the Indian market.
Unveiled this month and on account of be launched both late this 12 months or early 2021, the Magnite shall be Nissan’s first new car in India in two years. Furthermore, it will likely be simply one in every of three Nissan-branded fashions out there after two others had been pulled in April when more durable emission guidelines kicked in.
“Magnite will purchase Nissan a few years to determine a plan for India and the SUV’s success will decide whether or not it invests extra or scales down operations,” mentioned one supply.
A second supply referred to as the sport-utility car Nissan’s “final hope” to revive the model in India.
Japan’s No. 2 automaker has, nonetheless, no plans to withdraw from India, the place it has invested over $800 million, and discussions about technique are ongoing, the sources mentioned. They weren’t authorised to talk to media and declined to be recognized.
The Datsun model is prone to be phased out as a part of a worldwide overhaul, they added. Nissan’s solely different fashions in India are three Datsun vehicles.
Nissan mentioned in an announcement to Reuters it’s dedicated to the Indian market and has a well-defined technique for “a sustainable and worthwhile enterprise”. It declined to touch upon gross sales targets for the Magnite.
Who will lead?
Nissan’s inside plans name for gross sales of 1,500 to 2,000 Magnites a month, the primary supply mentioned – which if realised would exceed the typical India month-to-month gross sales it achieved final enterprise 12 months with seven fashions.
The SUV shall be priced “aggressively”, the sources mentioned with out elaborating. Initially developed as a Datsun mannequin, it’s now anticipated to have options sometimes seen in a mid-range automotive, together with a touchscreen and cruise management.
However the market is troublesome – demand has been pummelled by the coronavirus pandemic and India’s compact SUV phase is crowded. The Magnite may also go face to face with fashions from business leaders – Maruti Suzuki’s Brezza and Hyundai Motor’s Venue.
Complicating issues, Nissan’s India gross sales shops have nearly halved in quantity from round 270 in 2018 as sellers walked away from the model, the third supply mentioned. The supply added that Nissan hopes to export the mannequin.
India represents a very thorny marketplace for Nissan because it and Renault drastically restructure within the wake of former chief Carlos Ghosn’s shock 2018 arrest and ouster.
To save lots of assets, make clear decision-making and forestall overlap, the 2 companies have agreed to a ‘leader-follower’ technique in key markets the place one spearheads operations and the opposite is extra within the backseat.
Nissan, for instance, is taking the lead in america, China and Japan. However India is the only main market the place no such determination has been made, with the automakers saying they’ll coexist and compete.
“If Magnite is profitable, Nissan has stronger floor to argue to be the chief in India. If not, it’s again to the dialogue on who is greater and smaller,” mentioned the primary supply.
On one hand, Nissan has lower than 1% of the India market, promoting simply 18,000 autos within the final enterprise 12 months. Renault offered 5 occasions as many vehicles within the nation.
However Nissan holds 70% of their collectively owned plant within the southern metropolis of Chennai and exported 80,000 autos from the plant within the final enterprise 12 months, 5 occasions greater than Renault.
Two sources mentioned the automakers are in talks for Renault to extend its stake within the plant, which might construct 400,000 vehicles per 12 months. The plant was working at simply 43% of capability, Nissan mentioned in January earlier than the unfold of the coronavirus in India.
Nissan didn’t reply to requests for touch upon the stake sale talks or present utilisation charges. Renault additionally didn’t reply to requests for touch upon the talks.

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