The introduction of compact SUV Magnite has boosted the prospectus of Nissan in India, with the model getting more than 50,000 bookings and 2.78 lakh inquiries within five months of the launch. With the recently launched vehicle subscription scheme, the carmaker says it is positive that customer sentiments will improve, leading to an increase in demand and sales for the rest of the financial year. Nissan India MD Rakesh Srivastava tells Sajan C Kumar he is confident that the company will achieve a three-digit growth, with an expected over 20% growth for the industry. Edited excerpts:
The first national lockdown in 2020 adversely affected the auto industry on domestic sales and exports as our entire industry suffered tremendously with disruptions in manufacturing, supply chain and sales. That being said, we were prepared to deal with the challenges of the current lockdown through prioritising and balancing health, safety and business continuity. While the situation has considerably improved, it is too early to predict the business trajectory for the upcoming quarters. Nissan has stayed resilient, and we work very closely with our channel partners and suppliers to overcome any challenges. We are positive that customer sentiments will continue to improve, leading to an increase in demand and sales for the rest of the financial year. We are confident that we will have a three-digit growth of over 100%, with an expected over 20% growth for the industry.
The auto industry, which contributes to 7% of the GDP, was severely impacted with zero sales in the first month of the financial year. It suffered losses of `2,300 crore per day, with an estimated job loss in the sector of `3.45 lakh. It was tough for us to start the financial year with the BS-6 transition of our existing product line-up. But we gathered the momentum with the successful launch of the big, bold, and beautiful Magnite and its highest value proposition in the segment. Our customer response was phenomenal with 32,800-plus bookings within the first month of the launch. This … encouraged us to introduce a third shift at the manufacturing plant, employing a 1,000-plus workforce and over 500 staff at the dealerships. While the passenger vehicle industry ended the year with a decline of 6%, Nissan grew at 5% with a very strong performance in the last quarter of the year.
The Nissan Intelligent Ownership Subscription Plan has recently been launched in Delhi NCR, Chennai and Hyderabad. Our customers have shared very encouraging responses and we will soon expand it to other cities as well. With the challenges brought on by Covid-19, many customers are more focused on the usage of vehicles without long-term financial commitment of capital. Thus, it is very important for us to have a subscription model to facilitate our customers. The subscription plan is a very innovative option for our customers as it also allows them to subscribe to the vehicle now and pay three months later.
During the last fiscal, the industry witnessed a steep increase in commodity prices. This year, the challenge continues with sharp increase in prices of steel and precious metals. The pressure on financials is heavy and the challenge is big in terms of holding the price points steady, but we are working very closely with our supplier partners to minimise the overall impact on our customers. Regarding localisation, we have 91% indigenisation level for Magnite, 88% for KICKS, 71% for Sunny GCC and 88% for Datsun redi-GO.
The pandemic has impacted the overall business ecosystem, and this has undoubtedly been a tough time for OEMs and dealers alike. We’ve offered our dealers a one-year comprehensive medical health insurance policy for all on-roll dealer manpower. It aims to safeguard the dealer’s partners and their families against any health-related issues and covers hospitalisation for a minimum period of 24 hours of admission in a hospital for medical/ surgical management with the active line of treatment. We have also worked on faster cash flows, structural support towards mitigating the fixed costs, extended financial limit enhancement and allowed them to enjoy full dealer margins with zero contribution to consumer offers/ schemes and exchange programmes.
Get live Stock Prices from BSE, NSE, US Market and latest NAV, portfolio of Mutual Funds, Check out latest IPO News, Best Performing IPOs, calculate your tax by Income Tax Calculator, know market’s Top Gainers, Top Losers & Best Equity Funds. Like us on Facebook and follow us on Twitter.