MUMBAI –It’s taken just three years for the- Alliance’s share of the Indian market to go from virtually nothing to 5%, and President and CEO Carlos Ghosn believes the Japanese and French auto makers need only another three years to control 15%.
Driving the effort are revitalized research and development in design, engineering and marketing; technology and styling coming from’s Global Design Center in Japan; and Ghosn’s innovative strategies.
Ghosn estimates sales and exports of Nissan Motor India, including its Datsun subsidiary, and ofIndia, including its Dacia brand, will account for 600,000 units of India’s 4 million-vehicle market by 2016.
Alliance operations in India so far have not been profitable. But Ghosn told India television’s CNBC-TV18 in July he believes both Renault and Nissan will start making money in the country by the end of 2013.
Ghosn brings vision, patience, an understanding of technology and markets and ways to effectively use manpower and resources to Nissan’s push in India. “We are one of the largest car companies in the world, but we are very different and distinct without any boundaries,” he tells The Times of India in an interview.
The Renault-Nissan Alliance entered the Indian market in 2010, when Nissan delivered 7,164 light vehicles, according to WardsAuto data. The two auto makers sold a combined 80,396 units in 2012 and 52,893 through June of this year in the domestic market, while exports as compiled by the Society of Indian Automobile Manufacturers raised those totals to about 178,000 and 96,000, respectively.
The alliance’s current production capacity in India is 400,000 units, and it is spending Rs150 billion ($25 million) to increase annual capacity to 600,000 by 2016.
Ghosn’s confidence is audacious in light of the alliance’s financial struggles in India since 2010. The country’s current business and industrial environment is not conducive to rapid growth or solid profitability, as the overall economy is declining, interest rates and fuel prices are rising and consumer activity in the automotive markets is flagging.
Renault-Nissan, however, is relying on the buying power of the emerging young middle class, with high incomes and ambition to match, in developing economies such as India’s. These changing trends in global markets are guiding the alliance as it plots its growth plan.
Ghosn’s 3-year strategy for Renault-Nissan to meet its 2016 goals in India begins with the introduction next year of the Datsun Go small car, followed in 2015 by the rollout of an ultra-low-cost Datsun codenamed i2 and in 2016 by the adoption of Common Modular Family, a pioneering vehicle architecture for all alliance models.
The Go, a low-cost gasoline-powered hatchback, marks the return of the Datsun brand after a 33-year absence. Pricing is not revealed but, says Andy Palmer, Nissan executive vice president-global planning, the Go likely will sticker for less than the recently launched Micra Active costing Rs350,000 ($5,800).
Unconfirmed reports say the Go may base as low as Rs320,000 ($5,300), less than’s top-selling Wagon R city car and Alto K10 small car, or even India’s Eon, its highest-volume budget car.
The spacious Go is more than a mere revival of the Datsun brand. It it is the first model in the alliance’s new design-to-driving program developed for India as well as Indonesia, Russia and South Africa, where sales also launch next year.
Nissan says the Go’s fuel efficiency is rated at 46.1 mpg (5.1 L/100 km), on par with competingand models. Those auto makers offer small diesel engines, which Nissan does not have, although Renault is developing one.
The ultra-low-cost Datsun known for now as the i2 will be powered by a new, 0.8L engine Renault is developing and may be priced at about Rs240,000 ($4,000), Ashwani Gupta, Nissan program director for the Datsun brand, is quoted as saying.
The failure of’s ultra-low-cost Nano and Bajaj Auto’s withdrawal from its ULC-development partnership with the alliance in favor of making quadricycles does not faze Ghosn, who tells CNBC-TV18: ‟There is a huge demand for cars with high value and affordability...here is a potential for a car that can meet those needs and that is what we are pursuing. ”
The third and most important element in reaching Ghosn’s 2016 goals is the Common Modular Family, the novel vehicle architecture developed by Nissan and debuting later this year in the X-Trail global cross/utility vehicle.
Nissan claims CMF-A, as the system’s application to vehicles destined for emerging markets is called, reduces product and processing costs 30% to 40% and cuts parts costs 20% to 30%. It also provides the flexibility to expand model range and greatly widen choices for buyers.
Under CMF-A, car assembly is divided into five modules – engine, cockpit, front underbody, rear underbody and electrical or electronic architecture. Comparable parts and engines can be assembled into hundreds of possible configurations in each module and final assembly involves only the modules.
Ghosn says the technology, design and styling of vehicles under CMF-A originate at Nissan’s Global Design Center in Japan, but value-added components will be sourced and production engineering carried out in India and other markets.
"We are in India for the long run, and getting the production right is the key," says Toru Hasegawa, Nissan corporate vice president for Africa, the Middle East and India.
The new products will be sold in India, Indonesia, Russia and South Africa but adapted to each country’s driving conditions, family size, climate, market characteristics and price points. Exports from India will go to neighboring Asian countries.
Nissan's challenges in India are not confined to products. The auto maker has faced dealer unrest arising from commissions reduced by lost service and replacement-parts business. The Nissan-Renault India experiment in cross-badging saw initial success but has been a drag on sales this year.
Exports in the past two years exceeded 200,000 units, SIAM indicates, making Nissan the third-largest exporter from India after Hyundai and Maruti Suzuki. More than 200 variants of Nissan cars go to more than 90 countries. The India plant has replaced Japan as the hub of Micra exports to Europe.
The alliance plans to triple its Indian dealerships to 300 by 2016 and launch 22 new models during that period, including Datsun models, Ghosn tells news media during a recent visit to India.
The alliance’s confidence in reaching Ghosn’s 2016 goals is reflected in its new pact with the Ennore Port Trust. The 10-year agreement will be canceled if alliance cars are exported from any Indian seaport other than those in Ennore or Chennai, or if its exports in any year fall below 60,000.