When I first saw the news about the revival of the Datsun name, I must admit to growing just a bit excited. The reason for the emotional response was very simple – the first car that I ever owned was a Datsun 240Z. And it was amazing. So when this news first crossed into my area of research I had to check it out to see what the story was. And this is it.
The Datsun name is being revived for use in high-growth automotive markets. Initially these markets will include countries such as Indonesia, India and Russia. Very simply, Nissan wants to expand its global presence in markets where they currently have no presence at all in the ultra low cost segment. The segment name itself describes the challenge – ultra low cost. Obviously, if product is offered in this segment, by definition, these will be low profit vehicles – at least on a per vehicle basis. But, as they say (whoever they are), the plan is likely to profit by producing volume. Based on what Carlos Ghosn has done for and with Nissan since 1999 with the creation of the Renault-Nissan alliance in terms of profitability, we would not bet against him. So what exactly is an ultra low cost car. That depends on which region that you’re looking at.
In Indonesia, Datsun will likely offer 1.2 liter engines in vehicles priced under $10,000 as there are government regulations in place to incentivize that product. Mr. Ghosn mentioned that in India, the price could be significantly lower – perhaps $4,000. We are talking truly Ultra Low Cost. So why take on this challenge? Growth.
Nissan is currently the number one Japanese brand in China. If one doesn’t take the risk to establish a toehold in a market where you currently offer nothing, your share will always be zero. But by making an effort today and building a brand loyalty in this segment, as vehicle ownership expands to a larger percentage of the population, better equipped, higher cost, and more profitable vehicles will be made available.
So what does this have to do with electric cars? At first glance – nothing. I just happened to get excited about the reintroduction of a brand that I knew and enjoyed. But as I follow Mr. Ghosn’s train of thought, this undertaking will lead to (potentially) a significantly expanded global Nissan with improved profitability. Why do I care about Nissan’s profitability? Because currently Nissan is the only large scale global manufacturer with a committed eye toward the electrification of the automobile. We wish Nissan well in their newest global expansion endeavors, even if it does not include bringing the Datsun name back to the U.S. At least not yet.