Budget brand will target emerging nations.
Until the early 1980s, Nissan was represented in the U.S. by Datsun alone. By 1984, the transition to its global Nissan name was complete and the Datsun name gradually faded into history. Today, it is all Nissan with the Infiniti brand representing Nissan luxury.
In March 2012, Nissan announced that it was reviving Datsun in a bid to harness a trusted name while delivering a budget vehicle. We have now learned that the new Datsuns, destined to serve emerging nations, will retail in the $3,000 to $5,000 neighborhood, according to the Wall Street Journal. That price puts Datsun within Tata Nano territory, a car that has been sold in India since 2008.
The new, low price comes in at less than half the price of its current lowest-price Nissan model, a Tsuru compact that retails for $8,000 in Mexico. The bare-bones new model will likely represent the first of six Datsun vehicles to hit the market beginning in 2014, helping Nissan to reach out to poorer consumers. Those consumers are generally carless, although in India many families pile onto a motorbike to get around.
Selling a $3,000 car and making money off of each sale will present a huge challenge for Nissan, even if the automaker is able to build Datsuns where labor costs come at the lowest rates. Tata has managed to build a car that sells from 1.75 million rupees or $3,334, but the rising costs of materials in recent years has turned a $2,000 car into a more expensive proposition. The Nano has had some safety issues including the occasional fire that sends drivers and passengers fleeing. The Indian automotive website, Carzy, has been tracking and detailing these incidents, for a car that is not living up to sales expectations. Nissan will want to serve up a car that is safe, building confidence in consumers and hopefully building loyalty in the process.
Another area that should concern Datsun fans is the impact that any new models might have on vintage Datsuns. An orange 1971 Datsun 240Z had recently attracted more than 25 bidders on eBay, with its price pushing past $7,000. As long as new Datsuns never grace American roadways, the prices for classic Datsuns should hold up.
Datsun will compete with Tata and a handful of other budget brands that are largely unknown outside of their markets. Don’t expect Toyota and Honda to follow suit especially if the cost of materials continues to rise. It is one thing to build a budget car and something entirely different to do so without draining company resources.
Wikipedia file photo picture.