CEO Carlos Ghosn on the Return of Datsun

CEO Carlos Ghosn on the Return of Datsun

Nissan CEO Carlos Ghosn speaks at a press conference in Yokohama Wednesday, taking questions on the return of the Datsun brand.

CEO Carlos Ghosn: I'm sure everybody knows that yesterday we announced the revival, the relaunch, of the Datsun brand as a complement to, on the one side, Infiniti, and on the other, Nissan.

This is something that has been prepared within our Power 88 plan and will be a pillar of offering mobility for all, making sure that people—particularly in high growth markets—will have an offer from our company.

A lot of people in emerging markets today are driving motorcycles, some of them are driving used cars, others can buy a new car but, in fact, it's antiquated with very old technology and a very old platform – cars which have been there for 20 years or more. What we want to offer is a modern, affordable car—something that people will be very happy to own, a product that is generous, giving them exactly what they want, and at an affordable price.

As you can imagine, the reception in Indonesia has been very strong, particularly as the government at the moment is launching the green-car program. We considered the launch of the green-car program, we considered that this segment of the market may represent up to 40% of the future car market in Indonesia.

Q1. Is a new brand a risk?

CEO Ghosn: There is no risk. We just see an opportunity. 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 because it means that in India 40% of the market escapes us, in Russia 40% of the market escapes us, and what we think will be 40% of the Indonesian market will escape us. That's the biggest risk. The risk is to do nothing.

By taking the initiative and introducing the Datsun brand we're going to compete in a market in which could not compete before and we're going to compete strongly. We're not coming with antiquated product. We're coming with a modern, strong, attractive product under the brand of Datsun. That's why it's more of an opportunity than a risk.

Q2. Is the return of Datsun late?

CEO: Are we late? You're never late to do the right thing. There is never a great moment to start something. When you're ready, you should do it. When you're not ready, you shouldn't. So I don't think we're late. On the contrary, I think we're a major car manufacturer who is looking at entry-level products and saying, 'I can play a role,' and, as you know, our mission is not only sustainable mobility but mobility for all.

By taking this initiative of establishing the Datsun brand and launching products, we're going to be appealing to people who would love to own a car but cannot afford it.

And particularly what we want is a product we are proud of—a product that is reliable, good quality, generous, modern. Not an antiquated car, but something modern that people will buy.

Q3. Where do ultra low-cost cars fit in with the plans for Datsun to return?

CEO: Where will the ultra low-cost car fit? Well, the ultra low-cost car will fit with the Datsun brand. You cannot presume the Datsun brand is for that, but the day we come with a ultra low-cost car it will go inside the Datsun brand.

Q4. It's only two years to 2014. How far along is the development of cars for the new brand?

CEO: Two years is a very short time to come with a completely new brand? Not at all. We've been working on it. We can work on things without talking about them. We're not announcing something and then saying, 'Tomorrow, we're going to start work on the Datsun brand.' What we're announcing today is, 'We've been working on this.' The cars are already in development. Fortunately, we can still surprise you with what we're doing. It's not like now we're going to start work—we have already sketches, models, we know exactly what we're doing. We're announcing today in the middle of a work-in-progress.

Q5. Why go back to the Datsun brand instead of creating a new one?

CEO: Datsun is part of the heritage of the company. Why do I want to do something new if I can use the heritage of Nissan, which is long. Datsun is a good name. Datsun is part of the history of Nissan and Datsun has been part of the strength of Nissan. A modern Datsun, a revived Datsun, a Datsun of the 21st century compared with the Datsun of the 20th century. But I think it's part of our heritage and we want to make it strong. This name belongs to us and Datsun was known for a product, which was robust, reliable and affordable. These are good attributes, but we're not going to be limited. We're going to add to it quality and we're going to add to it modernity.

Q6. Does it matter that Datsun isn't well known in some of the target high-growth markets?

CEO: That's okay. It's fine. If in some market there is no recognition when starting with Datsun or another brand, then it's the same. But at least in the markets where there is recognition, we're starting with something

We announced that we're going to be positioning the Datsun brand in Indonesia, India and Russia, but this is a first step. Obviously the Datsun brand will become global particular to high-growth countries, but we're going to go by priorities. Our priorities for the moment are India, Indonesia and Russia.

Q7. How will the cars be tailored for different markets?

CEO: Datsun is going to be a global brand with a local product. Market by market we're going to be extremely pragmatic and fit the product to the market because every market has its own regulations. The green program in Indonesia is very specific: you qualify for the green-car program if you have an engine with a displacement that is less than 1.2 liters, the price has to be below $10,000, you have to have a local content higher than a certain percentage.

Every country has its own regulations for the affordable segment and, if you do that, you're going to have an incentive. In the case of Indonesia, the luxury tax will not apply, which today is about 10% of the cost.

We don't want to have a product that fits all needs because every market has its own specific incentives to encourage popular transportation, to encourage people who are today riding motorcycles and used cars to move to new cars. That's why we're going to very pragmatic and region by region and country we're going to make decisions based on the a product which we will fit to each market.

In some markets we can do it jointly with Renault, we can do it jointly with another partner of the company. But the master word is that we are here to make an offer to make sure that every single person who would love to buy a car can buy a car, and can buy a car from our company. That's the reason for launching the Datsun brand.

We want no more sections of the market where there is no offer from our company, particularly in the high-growth markets. This is part of our strategy to take leadership in the emerging markets.

We are the number one Japanese brand in China. We said clearly that we want to be the number one Japanese brand in Russia. We clearly are also going for leadership in Brazil, and the positioning of the Resende plant is in it. And obviously in the southeast of Asia we would like to play completely our role as a leading Japanese brand.

And this is part of our strategy to occupy all the space possible, contribute as much as possible to the development and the growth of the emerging markets.

Q8. How much will the Datsun vehicles cost?

CEO: We cannot talk about the price range overall because in every market the taxation is going to be different. Some markets have very high taxes, in other markets there are no taxes at all. But we can tell you that the price range is going to be in a segment of the market where usually we don't compete.

But again, you should not say this is another entry-price point made by a car manufacturer. What we want to do is a modern, affordable, reliable car in this segment of this market.

So obviously in Indonesia the price range is below $10,000, where there is no offer today. In Russia it is going to be something different. In India it is going to be something different, probably below this level – $4,000. So in every segment we are going to position ourselves at a level specific to the segment.

But our objective is to make sure that the person who today has a motorcycle or a used car and wants to buy a new car is going to consider Datsun. Today, we are not in the game.

Q9. Will you be continuing your cooperation with Bajaj in India, and when will a car be released?

CEO: In this segment of the market we are into testing, trying, launching. That's what you do. In India, we have many cars that we are considering for that price point. Bajaj is one of them. It's not the only one.

We have many other cars – our own and developed with other companies. We have been putting on the market recently a small pick-up truck with Ashok Leyland, the Dost, which has been very successful. It is an extremely affordable product and taking a very good position in the market.

This is part of our approach to the market. We test different possibilities and then we launch. If the project goes well, obviously we continue. And with Bajaj we are still evaluating the proposal that they made on a four-wheeler, which is expanded from their three-wheeler. And they we will decide after examining this possibility if we will use it or not.

But this doesn't mean that that stops the collaboration. The collaboration will continue. But this is a collaboration that is extremely pragmatic, based on win-win. As you know, in India we work with many companies: Ashok Leyland, Bajaj. We may continue to work with other partners because our objective is to have the strongest offer adapted to the Indian market.

Q10. What is your opinion on rising oil prices and their effect on the Japanese economy?

CEO: If you think that oil at $100 a barrel is high, you ain't seen nothing yet. When we launched electric cars we said clearly that we are preparing for a long period of time when oil prices are going to be very high. We took as a basis for the launch of the LEAF $80 a barrel. That was in 2007. In 2010 people said that it would go down, that it's not going to work.

Today we are at $100 and Europe is not growing and the United States is still in recovery mode, still below the level where it was in 2007. So when the US will be in full growth and Europe comes back – because it will – I don't think the price is going to remain at $100.

If you consider that oil prices are expensive today, we don't. We think that they are going to go up, and we are prepared for this. What is taking place today is part of what we have foreseen and we think that there is more to come in the future.

Q11: Will you sell Datsun in Japan?

CEO: I don't think that today we have plans to launch Datsun in Japan or any developed country. Again, we are business people. If we see a demand, why not? But we are not planning for it. This is for high-growth emerging markets. Again, we are business people. We should never say never, but it's not planned.

Q12: Why are you marketing Datsun cars to young people when old people are the ones who remember the brand?

CEO: We are not launching the Datsun name, reviving the Datsun name, counting on the fact that many people remember Datsun. Datsun is part of our heritage. We know the brand, we know how strong this brand has been in some markets. Again, for young people, launching Datsun or some other new brand is the same, because they don't remember.

So why not Datsun? In markets where Datsun left a good name of reliability, robustness, we are going to be capitalizing on it. Between launching the Datsun name and a new name, Datsun is equal or better. So we are going for something belonging to the heritage of Nissan that we would like to revive.

Q13: What will the displacement of Datsun cars be?

CEO: We are going to be very pragmatic. It's not going to be one displacement for all. In Indonesia it's going to be 1.2 liters or lower. So, it's going to be pragmatic.

Let's not forget, this is going to be a car for consumers in high-growth markets. And this segment is very important. Today, this segment is 43% of the market in India. We have zero offerings. This segment is 42% or 43% of the market in Russia. We have zero offerings. We think that this segment will be 43% of the market in Indonesia but today we have no offer. We are just going to get into the segments of the market where today we don't compete. We said zero – we have zero market share. Again, it is not a risk, it is an opportunity.

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