Nissan reintroduces Datsun to emerging markets

The company wants to price its new model at $3,000 to $5,000, hoping to build back its global share.

By Benzinga Oct 2, 2012 5:19PM
Credit: Nissan
Caption: Nissan TsuruBy Joe Young

Much to the chagrin of competitors like Toyota (TM) and Tata Motors (TTM), Nissan (NSANY) has announced plans to reintroduce its retired Datsun brand to emerging markets with a price range of $3,000 to $5,000.


Although Nissan did not release exact figures, its investment in new-model development will be costly -- most likely in the $1 billion range. Nissan is attempting to tap into the emerging-market category with a base price significantly lower than the $8,000 Tsuru model (pictured) it sells in Mexico.


Yukitoshi Funo, an executive overseeing developing markets for Toyota, was quoted saying that "it's a big mistake to think you can introduce a cheap car in emerging markets and be successful." Yet Nissan has decided to push forward, calling attention to its Datsun release with an ultra-low price tag.


Nissan has lost share in foreign markets and is expected to continue doing so. However, emerging markets continue to be an excellent source of revenue and product development for companies outside of the automotive industry, and Nissan wants to gain from that.


Six new Datsun vehicles are planned for expected arrival starting in 2014. The new model will be extremely basic (think manual transmission and few, if any, airbags) and the consensus even among Nissan employees is that the release will be difficult to pull off. Competitors also do not feel that there is enough demand to warrant the new model, let alone a new brand.


Datsun was discontinued in 1986, despite being the second-largest selling foreign brand in the United States just a few years prior. The Nissan name was then introduced to take over the Datsun market and unify the company as a whole. According to The Wall Street Journal, the brand-name change caused much confusion and is "still considered one of the worst marketing decisions in automotive history."


Nissan CEO Carlos Ghosn believes reintroducing Datsun to the world will create excitement and help his expectations of boosting Nissan's global market share from its current 6% to 8% by 2016. Ghosn also expects emerging markets to take a larger share of auto sales and hopes that Datsun will reap the most benefits from increased demand.


There is immense criticism surrounding the new Datsun, particularly over whether it can tap into the emerging markets and expand its presence in the United States, where the price tag is likely to become largely inflated. Tata Motors' Nano, with a sale price of $1,900, was a disappointment in this sector, although the company blamed its lousy marketing campaign. Chrysler's (FIATY) Dodge division debuted a stripped-down model called the Razor at the 2002 North American International Auto Show for $14,500, but the production model never saw the light of day.


Shares of Nissan rose less than 1% Tuesday to close at $16.84.


More from Benzinga
118Comments
Oct 2, 2012 8:00PM
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For many people, just having affordable transportation without all the fancy stuff is just fine.  If it runs and is easy to maintain, it will meet the needs of a lot of people who otherwise would live without an automobile. 
Oct 3, 2012 7:28AM
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Why not have an affordable pickup? All it needs is a heater, a/c, and rubber floor mat. Just a work truck
Oct 3, 2012 7:26AM
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The public has been priced out of the market and the auto manufacturers know it...$30K - $60K is not in Avg Joe's wheelhouse so they have to reboot...Nissan is the 1st and others will have to follow or disappear.
Oct 3, 2012 7:21AM
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all negative comment about low cost car from nissan must be all car salesman. why would you put down a car costing less than $8000. i guess you think that millions of people that lost their homes can afford a $25000. WAY TO GO NISSAN!!!!!!!!!
Oct 3, 2012 7:36AM
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WEEEE HOOOO!!!!. bring it back Nissan. for $5000, i can buy 5 cars for the price of ONE. I'm with whoseyourauntie (significant other using her comp.had 280z with over 365,000 miles,),  millions of people that lost their homes in the CRASH will be sooo happy,along with young college students.. I DON'T KNOW WHAT KIND OF THINKING IT IS THAT BUYING A $25000 CAR IS OK. AFTER MILLIONS OF PEOPLE WENT ON FORECLOSURE

Oct 2, 2012 7:58PM
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I would love to see Datsun come out with a small, safe, cheap car. Make it 1.0 liter 3 cyl, DI, turbo engine. It should be small like a IQ with a 5 door hatch and seating for four. They could save money by having cloth seats, no radio, manual windows and a 5 speed manual tranny. Make a/c, radio, pw, pl, and sunroof an option. Spend the money on safety and a modern engine for max fuel economy. It would make a great commuter car if they could sell it for 5k-8k. I would buy one and drive my old Sonata as a weekend car.
Oct 3, 2012 11:04AM
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We'll never see such a cheap car in America.  Safety regulations alone will guarantee it.
Oct 3, 2012 8:14AM
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I've owned 5 Datsuns -I miss my 310 easy to work on parts are cheap and great gas mileage.
Oct 3, 2012 9:38AM
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My first new car was a Datsun B-210 'Honeybee".    Just a car, heater, radio, no carpet.  It was the BEST car ever!!!!  I drove it 280,000 miles before I finally bought a new one and the only reason I did then was I wanted air conditioning.  I blew a tire on it once and it was so well balanced, I was able to drive home on 3 wheels.

Bring them back, Nissan!  We miss our Datsuns!!!

Oct 2, 2012 7:09PM
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Several of my friends had Datsuns back in the late 70's, early 80's, and they were great cars, I was sad to see them go. The B210 was a good little car, and the 280 ZX was totally hot in it's day. I hope it works out for them.
Oct 3, 2012 11:31AM
Oct 3, 2012 7:07AM
Oct 2, 2012 8:37PM
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I never liked the name change. They should have stuck with Datsun.And building cheap durable little cars.
Oct 3, 2012 9:03AM
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How about the Datson convertible roadster while your at it.
Oct 3, 2012 8:08AM
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At 3k to 5k they will sell a bunch of them!
Oct 3, 2012 10:28AM
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Fond memories of the Datsun!  Everyone I knew that had one, loved their Datsun, and our Datsun, would never die!
Oct 3, 2012 3:08AM
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I spent 30 years in the field working for a major auto manufacturer.  What I saw over time was a trend where dealers were more interested in selling one vehicle for $1,600 profit than 16 for $100 profit.

 

So I doubt a $3,000 Nissan, would be popular for dealers in the US because it would probably have a low profit margin.

 

Now days it appears if the car is not a rolling IPod, IPad, it is not desirable or so dealers and advertisements would have you believe.  Try finding a basic transportation vehicle with minimum accessories, they are few and far between.

 

I remember it was not that long ago that KIA one of the cheapest cars available had a two for one promotion.  Today their pricing is compatible with most of their competitors for the same class vehicle and they are now loaded with all bells and whistles.

Oct 3, 2012 10:42AM
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with those prices even i can afford a car
Oct 2, 2012 11:52PM
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I have a 73 datsun 240z and it is amazingly dependable, powerful, exotic, headturner, and worth at a minimum of 5 times more now than what it sold for then. I wish the newer cars were as dependable as this old 1973.
Oct 2, 2012 7:51PM
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I wish more car companies would make small, basic cars. If they can sell them for five grand overseas they can sell them here also. I love small cars.
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