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Is Ultra low cost segment really ready for the customers?

Snapshot: Is Datsun following the Nano's sales footprints?

Is Ultra low cost segment really ready for the customers? This question seems valid when you compare the world's two most, low cost cars, Tata Nano and Datsun GO. Is Datsun following the Nano's sales footprints? Looks like, other than the image that the Nano and GO with them, as the cheapest offering from the Tata and the Datsun respectively, they also share another aspect, and that is the sales figures, which went drastically bad, under the over ambitious nature of the project. Launched in 2008, the Nano was touted as the cheapest car in the world priced at around $3000 and was hopeful of doing 2,50000 units annually, which is also the production capacity of the Nano plant.

But what followed was the bad marketing and reliability issues, creating loads of trouble for the Tata, touching the 250000 units mark in 5 years. The customers were not too inclined towards the ultra cheap vehicle as opposed the initial thinking. The Datsun, it seems, has fallen into the same trap, now. They managed to clock only 10000 units in 6 months since its launch globally in the Feburary Auto Show, held in Delhi. Priced around Rs 3 lakh, the GO was also marketed as the low budget car among the likes of Hyundai Eon and Maruti Alto.

Tata Nano

The Alto, in comparison, does double the amount of GO sales in just a month, that's 20000 units in a month. Both the vehicles Nano and GO were made specifically for the developing counties and didn't faired well in these markets too, leaving aside the developed markets, which go for the safety and features in the first place.

Carlos Ghosn, the CEO of Nissan-Renault, was very much hopeful about the project, as he pledged to increase the Nissan's global market share by one-third to 8% by 2017. His hopes were depending on the low budget cars, which could bring the volumes. Indonesia and India were the biggest market for the Datsun, looking at the appetite of the people for lower cost cars. But Datsun GO was not received very well in these markets either. 

Datsun Go+ MPV

Datsun was revived a year ago, by Nissan, to serve as its budget brand, similar to what Renault did with the Dacia. But, this is not the end of the bad news, reports are suggesting that the markets will continue to shrink. The current lineup of the Datsun includes, Go hatchback, Go+ minivan, On-Do sedan and Mi-Do hatch. This line-up, although, is restricted only to the Indonesian markets for now, as the Indian markets receive the Go hatchback only, for now. Although Datsun is ready with the launch of the Datsun GO+ MPV too. All the current vehicles are largely based on old architecture, equipped with basic equipment and sold at rock-bottom prices.

Though it is too early to predict the future of the company, as it is still in the process of creating its brand image in India, or globally, for that matter. Still, the last 6 months showed that Dastsun is well on the course of becoming another Nano. It will not be wrong for us to say, about both the cars, 'insanely cheap cars, still no one wants to shell out money to buy the car'.

Check our video review of the Datsun Go, here.

Carlos Ghosn, CEO, Nissan -Renault

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