Nissan Fields New Entry in Thai Eco-Car Market

Nissan launches its second eco-car in Thailand, this one a sedan version.

The Japanese auto maker also hopes the Almera will explode the myth that eco-cars have to be small and plain. At 177 in. (443 cm) long, it is bigger than its B-segment peers and features a spacious and reasonably comfortable cabin.

Nissan Almera sedan, known as Versa in U.S.

Thailand becomes the fifth destination for Nissan’s V-architecture-based Almera, which is already built for markets including China and the U.S., where it is called the Sunny and Versa, respectively. Eventually, the sedan will be sold in 170 countries, with an annual sales target of 400,000 units.

“We believe it will be a key model for Nissan in the region,” Nissan COO Toshiyuki Shinga says at the Thai launch of the Almera in Bangkok.

Toru Hasegawa, president of Nissan Motor Thailand and Nissan Motor Asia Pacific and regional vice president-Asia and Oceania operations, says he is confident the Almera will strengthen the auto maker’s standing as “leaders of the eco-car segment in Thailand.”

The Thai government’s eco-car initiative is designed to position the country as a global hub for production of low-cost, smaller-capacity, fuel-efficient and safe cars. The designation goes to vehicles that meet Euro 4 air-quality regulations, emit no more than 120 g/km of carbon dioxide and have engines no larger than 1.3L (gasoline) or 1.4L (diesel).

Nissan was the first out of the gate in Thailand last spring with its new-generation March, selling 28,000 units during the first year and a total of 47,000 thus far. The auto maker has orders for 53,000 more units, indicating small urban cars are an underdeveloped segment in Thailand.

The March is the first Nissan product to be exported to Japan, underscoring its importance to the auto maker. “It is well accepted by Japanese customers,” Shinga says.

The only eco-car currently on the Thai market besides the March and Almera is the Honda Brio.

Mitsubishi and Suzuki will field contenders next year, followed by Thailand’s biggest player, Toyota, with its Yaris.

While most of the launched or planned eco-cars have been hatchbacks, more sedans likely will join Nissan’s March-spinoff Almera in the program; Honda has a sedan version of the Brio in the pipeline.

But a low-cost sedan in the Thai market’s tough B-segment is by no means assured of success, and momentum will have to be built – possibly at the expense of March sales.

Thailand’s importance to Nissan was underscored in July, when the auto maker moved its Nissan Motor Asia Pacific headquarters to Bangkok.

“Thailand serves as an important strategic industrial base and export hub for Nissan, while the nation’s economic growth provides great stability for our business,” Shinga says. “I am proud that Nissan Motor Thailand stands as a center of excellence for our company in terms of manufacturing, R&D and customer care.”

The Thai government believes it has hit the nail on the head with the eco-car program, which is “developing products in response to the need of the customer,” Industry Minister Wannarat Channukul says.

He also is pleased the March has been “accepted in Japan” and is a symbol that “reflects cooperation between Nissan and the government.”

Adds Channukul: “The Thai government has a commitment for the auto industry to grow and prepare for the ASEAN (Association of Southeast Asia Nations) zone, the opening-up of competition.”

Nissan never has had a fully integrated strategy for Southeast Asia, but growing reception to recent models such as the March and Juke are giving it a solid platform to build upon.

The Almera is a key component in the auto maker’s “Nissan Power 88” global strategy, which includes major emphasis on the 10-member ASEAN markets.

Nissan is targeting 15% market share and annual sales of 500,000 units in the region by 2016.

The auto maker reported sales of 200,000 units and a 5% market share in the region in 2008, reaching 150,000 units and a 6% share last year.

Nissan’s ambitious 2016 target is underpinned by the rollouts of 10 new models, starting with the Almera. Prapat Choeychom, senior vice president-sales and marketing, says the Almera’s first-year sales target in Thailand is 40,000 units.

Nissan’s plans include doubling Thai sales from 65,000 units last year to 130,000 annually by 2016. Hasegawa says that strategy will be bolstered by “aggressive expansion of our sales network,” expanding capacity at the auto maker’s Samutprakan plant and outsourcing production of 60,000 Navara pickup trucks annually.

But Nissan Thailand faces an immediate problem: the flooding which has swept the country in recent weeks and disrupted the supply chain. At the Almera launch, Nissan executives made it clear they are working hard to stabilize operations and encouraging suppliers to relocate production equipment as soon as possible.

The Almera’s only available engine is a 1.2L, 3-cyl. mill producing 79 hp and mated to either a manual or Xtronic-CVT transmission. It offers five trim levels and nine colors. Prices range from 429,000 baht ($14,000) to TB599,000 ($19,560).

Nissan believes the Almera will usher in a new era of eco-sedans in Thailand and the wider region that offer respectable levels of comfort, refinement and luxury, allowing it go head-to-head with the traditional segment leaders.

The Almera marketing campaign will focus on attracting younger white-collar workers and image-conscious families – the so-called “iPad generation.” Nissan also hopes the car will make an impact in the provinces, where smaller sedans are considered less prestigious than hatchbacks.

Spare parts for the Almera will be priced 15% lower than its rivals. Nissan estimates operating costs at BT11,848 ($387) over 62,000 miles (100,000 km), compared with a segment average of BT19,745 ($645). The auto maker calculates fuel costs at BT161,000 ($5,260) over the same distance, compared with BT215,000 ($7,020) for the average subcompact.

The Almera likely will join Indonesia’s newly announced eco-car scheme structured along Thailand’s program. Nissan already has a foothold in Indonesia, with a population of 238 million.

The Almera for the Indonesian market likely will have less content, a 1.0L engine for the Thai version, and be priced at least one-third below the Thai version.