September 6, 2018 / 6:48 PM / in 8 months

Nissan redraws India strategy, to focus on premium cars

FILE PHOTO: Logo of the Nissan Motor Co. is displayed at the 44th Tokyo Motor Show in Tokyo, Japan, November 2, 2015. REUTERS/Issei Kato/File Photo

NEW DELHI (Reuters) - Nissan Motor Co (7201.T) will produce and sell only premium vehicles in India, while using its sister brand Datsun to crack the mass budget car market, in a revamp of its strategy in the country, a company executive said on Thursday.

India is one of the world’s fastest-growing car markets but several global automakers, including Nissan, have struggled to boost sales in the country where rivals Maruti Suzuki India Ltd (MRTI.NS) and Hyundai Motor Co (005380.KS) together control about two-thirds of the market.

Nissan will upgrade its manufacturing facility, double the number of car dealerships over the next three years from about 270 today and hire more people, Peyman Kargar, senior vice president at the Japanese carmaker, told reporters in New Delhi.

“India is one of the most important markets for us. We are not at the level we want today. That is why we have identified a very comprehensive plan,” Kargar said.

Several global automakers including Nissan, Renault SA (RENA.PA) and General Motors (GM.N) have launched budget cars to win over India’s cost conscious buyers but the segment has remained dominated by Maruti Suzuki.

Nissan’s share of India’s passenger vehicles market fell to 1.6 percent in the fiscal year ended March 31, from nearly 1.9 percent a year ago. Total passenger vehicle sales in the country rose 8 percent during the year to 3.3 million units, industry data showed.

As part of its new strategy Nissan, which sells cars including the Micra hatchback and Sunny sedan in India, will launch more sport-utility vehicles (SUVs) under its brand, starting with the Kicks SUV in 2019. It also plans to sell electric vehicles.

It will develop a range of new cars under the Datsun brand, mainly targeted at cost-conscious buyers in smaller towns and cities, where it will launch more dealerships to boost sales, Kargar said.

Nissan resurrected the Datsun brand in 2012 to try to capture market share in emerging markets such as India. It launched three Datsun cars in the country, starting in 2014, that initially boosted the company’s sales but has failed to sustain the momentum.

Reporting by Aditi Shah; Editing by Kirsten Donovan

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