Datsun Has a Hard Time Finding Customers for its Cheap Cars

Nissan’s budget brand Datsun hasn’t convinced too many buyers during the first months on its main three markets, India, Indonesia and Russia.

Deliveries have fallen in three of the past four months through August in India, even dipping below those of the Tata Nano in July. In Indonesia, Datsun needs to pick up the pace in order to meet its full-year sales target, while in Russia the brand suffers as does the entire market because of western sanctions imposed on the country.

Through August, deliveries of the Datsun Go hatchback in India have only totaled 9,557 vehicles since the car went on sale on March 19, according to the Society of Indian Automobile Manufacturers. By comparison, Maruti Suzuki, India’s top-selling carmaker, sells as many of its similarly priced Alto hatchbacks every couple of weeks.

Datsun’s struggle is a reminder that cheap cars don’t necessarily guarantee commercial success in emerging markets, as the Tata Nano has proved. Analysts believe the comparison with the Nano is justified and say the reason for Datsun’s disappointing sales is that people want to be seen driving cars that are not cheap.

Datsun has a very important role in Nissan’s plan to raise its global market share by a third to 8 percent by March 2017. If Datsun doesn’t deliver, Nissan’s plan is in jeopardy. Even though Datsun models generate lower profit margins, they are key to the company’s sales strategy because they target emerging markets with the highest growth potentials. Nissan has forecast Datsun will make up a third to half of its sales in the countries that the brand is operating in.

Story references: Bloomberg

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