How low can you go? If you're Carlos Ghosn, you want to build a car cheap enough that Nissan finally can compete in the very lowest-priced segment of auto sales throughout the developing world. So as promised earlier this year, Nissan —up 30 percent on Interbrand's just-released 2012 Best Global Brands report — is moving forward with a plan to delve into the ultra-low-cost car market by offering a model for about $3,000 to $5,000.
And the Nissan-Renault alliance has promised to do so through a revival of the Datsun brand. Nissan plans to offer six Datsun vehicles, beginning in 2014, at a price range lower than all but a handful of smaller car makers in China and India, Ghosn told the Wall Street Journal. A $3,000 Datsun would be about one-third of the price of the currently least expensive Nissan, the $8,000 Tsuru compact.
By not doing so previously, the CEO of Nissan and Renault said that the company has left itself out of about 40 percent of the potential market in countries including India, Indonesia and Russia. "We just see an opportunity," Ghosn explained earlier this year. "Today, in all the markets we are present, there is a level of price below which we cannot compete, we have no offering. The risk is to do nothing."
Nissan hasn't been alone in its inability to compete in this segment, where of course brand preferences are greatly influenced for the lifetime of a consumer. And Nissan already is facing some opposition internally to the choice of Datsun to lead the cut-rate charge, the newspaper reports. Datsun was a "much-beloved brand" for its classy designs and innovative touches back in the day. But, the Journal noted, to push the new cars' price points down to under $5,000, the new Datsuns will have to jettison things that long have been standard in the U.S. but not in developing markets, from automatic transmissions to a full supply of air bags.
And some competitors remain outright dismissive of Ghosn's plan. "It's a big mistake to think you can introduce a cheap car in emerging markets and be successful," Yukitoshi Funo, EVP of Toyota in charge of developing markets, told the WSJ. "People want a car they and their families can be proud of."
But Ghosn isn't backing down. "We are going to be a big player in ultra-low-cost cars," he saidon the sidelines of the Paris Auto Show that continues this week, where Nissan also is offering a full spectrum of social-media activities to engage fans who can't make it there.
Part of the reason for his determination is that the Datson revival is an effort that Ghosn wants to be proud of. He is the only major car chief to have been raised in the developing world — born in Brazil and raised in Lebanon. And, the Journal said, he "has decided to stake his reputation" on the revival of Datsun.
Below, the Wall Street Journal's infographic on Nissan's plans to "revive its Beatles-era Datsun" brand at a lower-price point:
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