Japanese auto-maker Nissan Motor Co. said it may develop a new, compact car for the Indian market when it starts manufacturing in the second half of 2009 to boost?its?market-share?in Asia’s fourth-largest car market.
“To match the Indian customer’s needs, we may have to develop a real Indian car,” said Yoshie Motohiro, managing director of Nissan’s local unit. “We want to be a major player in India. To be competitive, we have to look at the small car segment.”
We are “actually looking at India as the lead country to manufacture a car,” said Neeraj Garg, director (marketing and sales) at Nissan Motor India Pvt Ltd. “We are trying to work out something specifically for India and to give it maximum success in India.”
Over three-quarters of the one million passenger cars sold in India are compact vehicles purchased by first-time buyers, who look for affordable, fuel-efficient transport. Only seven out of 1,000 Indians own a car compared with 12 in neighbouring Pakistan. This has prompted car makers such as Honda Motor Co., Toyota Motor Co., and Ford Motor Corp., to develop new compact cars for the Indian market, given the size of the population. At least 10 new small car models are likely to be introduced in the next three years.
Nissan, which currently imports the X-trail sports utility vehicle and the just-launched Teana sedan, is building a 400,000-units-a-year manufacturing facility along with partners Renault S.A. and Mahindra & Mahindra Ltd, India’s largest tractor and utility vehicle maker.It is likely to hold a 25% equity stake in the joint venture, said Motohiro.
Nissan, which also has a contract manufacturing arrangement with Maruti Udyog Ltd, India’s largest car maker, to export 50,000 cars a year made by the latter in its Manesar, Haryana facility, said it didn’t rule out introducing that car in the Indian market.
“That’s a possibility we are studying,” said Garg. The car is being developed by Suzuki Motor Co., Maruti’s parent, and the latter expects to export 100,000 units to Europe on its own.
Nissan, which has sold 600 X-Trails since its introduction in India three years ago, is targeting sales of 350 units of the Teana sedan, which will compete with the Honda Accord and Toyota Camry for market share.
Garg also said that the company was looking to introduce more higher-end models, to be imported as completely built units, as a brand-building exercise before the company starts manufacturing in 2009.
Car makers generally import only higher-end models since restrictive 100% plus duties, makes it unviable for them to price small cars competitively.