Wednesday, October 3, 2012

OT: Datsun Rises from Ashes

This is exciting!

Nissan Motor's CEO Carlos Ghosn, who was born in Brazil and grew up in Lebannon and has been the turn-around CEO for 13 years of the Japanese auto company that went on the verge of bankruptcy, says he will bring back "Datsun" brand, at super-low price of $3,000.

From Yahoo Autos citing Wall Street Journal (10/2/2012):

It is the car that baby boomers may remember as much for its compact chic as for its slogan ("Datsun, We Are Driven!"). Now, a new version of this storied brand may get more attention for something else: its price tag.

In a bold move into the auto industry's fastest-growing category—emerging-market countries—Nissan Motor Co. is planning a revival to this Beatles-era star that might surprise its fans. According to interviews with Nissan's CEO, Carlos Ghosn, and other company executives, the rebooted car will appear in these countries as bare-boned as any rival has tried. And Nissan is hoping to set new lows for pricing for a global auto maker, offering the cheapest Datsun model for about $3,000 to $5,000. The lowest price is nearly a third the price of its most inexpensive car, the $8,000 Tsuru compact sold in Mexico. In revealing new details to The Wall Street Journal about the tightly controlled project, Mr. Ghosn said the company was committed to offering six Datsun vehicles, due out beginning in 2014, at a price range lower than all but a handful of smaller car makers in China and India specializing in mini autos.

He portrayed the relaunch as much as a life's mission as a business strategy, with the goal of providing poorer populations a greater chance at car ownership. No major car company has yet figured out how to penetrate profitably the lowest price segment in emerging markets, even though these countries already make up nearly half of all global vehicle sales.

But both the overall strategy and selection of Datsun to lead the cut-rate charge has already faced some opposition within the company and is likely to cause concern among some analysts and car buffs. In its heyday, Datsun was a much-beloved brand, an economy car that was nonetheless prized for classy designs and innovative touches. But to have a shot at keeping the price at $3,000 for the lowest-priced model—which even Nissan officials concede will be a hard to pull off—the company will have to jettison features that have long been standard in the U.S. but not in developing markets, from automatic transmissions to a full supply of air bags.

(Full article at the link)

Rival Toyota Motors scoffs at Nissan's plan, according to the article:

"It's a big mistake to think you can introduce a cheap car in emerging markets and be successful," said Yukitoshi Funo, the executive vice president at Toyota Motor Corp. in charge of developing markets, where the auto maker has bet heavily on subcompacts and pickup-truck derivatives in the $8,000-$10,000 range. "People want a car they and their families can be proud of."

Pride of ownership depends on the price you pay?

In the meantime, Nissan's rivals Toyota and Honda will cease production of their run-of-the-mill cars like Corolla and Civic in Japan and move them to the US and Mexico, in order to avoid exchange rate risk (=loss, mostly) and save a few hundred to a few thousand dollars per car.

I guess those Japan-based executives don't realize that many people even in the US would be happy to pay premiums of a few thousand dollars to buy a Corolla or Civic entirely made in Japan. The premium would probably be justified, given the much higher resale values of these brands compared to other brands in the low to mid range market.

(Datsun 510 Bluebird)


Anonymous said...

Just what the world needs - a more affordable way to burn hydrocarbon fuels.

If the UN wants to impose global taxes, they can start with a 9,000 USD tax on 3,000 USD datsuns

Anonymous said...

Oh shut up.

Anonymous said...

I'd rather have CO2 than radioactive cesium, plutonium, strontium, silver.

JAnonymous said...

Not surprised.

And I won't be surprised either when they will be successful and other makers will run around trying to negotiate a (doomed) deal with tata and the likes to make dirt cheap cars.

He did the exact same thing in eastern europe with the "logan" car under a new renault-owned brand called dacia. It has become insanely popular. You can now even buy the logan in whole europe (less cheap, but cheaper than anything else, even a lada), add some options like power steering (unless you want some schwarzenegger-class muscle), and find SUV or all-road versions.

It makes sense to bring a japanese brand to the mix, plus they won't really be competing, you see...

Anonymous said...

Risky move indeed. Remember the Volkswagen / Porsche struggle ? Cheap cars give very poor returns to car makers, luxury cars have huge returns.
Cheap or mid-price european, japanese - and now US cars are pretty good and good value, great for consummers but the market is very difficult.
(BTW my ego is satisfied with a second-hand little but well equipped FIAT Panda, although I had more fun with a sports gear Alfa 33 I bought from a... japanese executive on the leave).

arevamirpal::laprimavera said...

I got to drive old Nissan Z once. That was fun. I like the very first Honda Civic, too. Solid, no nonsense cars.

Anonymous said...

More metal and less plastic,humanised design.

It's a problem on our roads,terrible CAD mostrosities,naff paintjobs,a kind of banal homogenised individualism of people served up no taste.

Anonymous said...

Yup. What's on the road today all looks like a bloated teenager bully in the school yard.

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