Much to the chagrin of competitors like Toyota (NYSE:
) and Tata Motors (NYSE:
), Nissan (OTC:
) has announced plans to reintroduce its retired Datsun brand to
emerging markets with a price range of $3,000-$5,000.
Without releasing exact figures, the investment in new-model
development will be costly -- most likely in the $1 billion
range. Nissan is attempting to tap into the emerging market
category with a base price significantly lower than the $8,000
Tsuru model the company sells in Mexico.
Executive Vice President of Developing Markets for Toyota
Yukitoshi Funo was
, "It's a big mistake to think you can introduce a cheap car in
emerging markets and be successful," yet Nissan has decided to
push forward, calling attention to its Datsun release with an
ultra-low price tag.
Market share has been decreasing for Nissan in foreign markets
and is expected to continue doing so. However, emerging markets
continue to be an excellent source of revenue and product
development for companies outside of the automotive industry, and
Nissan wants to gain from that.
With an expected arrival date in 2014 and six new Datsun
vehicles planned, the new model will be extremely basic (think
manual transmission and few, if any, airbags) and the consensus
even among Nissan employees is that the release will be difficult
to pull off. Competitors also do not feel that there is enough
demand to warrant the new model, let alone a new brand.
Datsun was discontinued in 1986, despite being the second
largest selling foreign brand in the United States just a few
years prior. The Nissan name was then introduced to take over the
Datsun market and unify the company as a whole. According to The
Wall Street Journal, the brand-name change caused much confusion
and is, "still considered one of the worst marketing decisions in
Nissan's Motor Chief Executive Carlos Ghosn believes
reintroducing Datsun to the world will create excitement and help
assist in his expectations of boosting Nissan's global market
share from its current six percent to eight percent by 2016.
Ghosn also expects emerging markets to take a larger share of
auto sales and hopes that Datsun will reap the most benefits from
There is immense criticism surrounding the new Datsun, from
its predicted inability to tap into the emerging markets and its
presence in the United States, (where the price tag is likely to
become largely inflated). Whether the criticism is from bitter
rivals that aren't offering as cheap of a car or from Nissan
executives, the Datsun project has a team of members hard at
work. Tata Motors' Nano, with a sale price of $1,900, was a
disappointment in this sector, although the company blamed its
lousy marketing campaign. Chrysler's Dodge (OTC:
) division debuted a stripped down model called the Razor at the
2002 North American International Auto Show for $14,500, but the
production model never saw the light of day.
Shares of Nissan are flat premarket after having closed down
0.48 percent on Monday.
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