“As part of a natural evolution we decided to have our own direct distribution for the Datsun brand. There will be a structured organisation. The manpower will be benchmarked with the competition that we have in the segment,” said John Kullu, general manager, Datsun India.
“We recognize the need to have an extensive dealership network, not just in tier 1 but tier 2&3 cities as well. There will be a separate dealer development, sales and marketing team which will look at marketing the Datsun successfully. We are creating a new arm,” he said.
Nissan Motors India has so far relied on its marketing and distribution partner Hover Automotive to sell its products in India. The company plans to initially engage the existing 100 Nissan dealer partners who will be prioritized for separate dealerships. In addition it is looking for newer investors as well.
“With 100 dealers we still have a good spread to start with as about 50 dealers are in the tier 3 markets. That network is expanding as well, going forward tier 2&3 will be the key focus markets,” said Kullu.
Nissan already has seven models in the market, including the Nissan Micra, and with Datsun it will be catering to a much larger target group. At least 50% of its 4,00,000 manufacturing capacity in India will be dedicated to the Datsun brand. With a fuller portfolio now, Nissan aims to more than double its dealer numbers by 2016.
“We have 100 dealers right now and expect to have 145 by the end of this fiscal. Our aim is to have 300 or more by 2016,” said Kenichiro Yomura, president and MD, Nissan Motor India. “Because of the headwinds in the market, our volumes are low but there are no plans to slowdown our dealership expansion plans,” said Yomura.
It takes R3-5 crore to setup one dealership in a tier 1 city while in the tier 2&3 the investment is halved. Rival Maruti has about 1,000 dealerships in India including small point of sales, while Hyundai has about 400 exclusive dealerships in India.
Datsun Go’s commercial launch is scheduled around the Auto Expo in February 2014. At present, in a three-month activity, the carmaker is showcasing the first production lot cars across 90 cities in India. While the company has not revealed the price, it indicated it could be looking at a below-4 lakh price to make the offer competitive.
The breakup with Hover
In October 2012, Nissan had a run-in with its dealership partner Hover Automotive, which helps the carmaker exclusively expand its dealer network across the country. Though the company has said Hover Automotive will continue to be its sole dealer expansion partner for the Nissan brand while it develops the marketing and the servicing arm for Datsun.