Datsun out of India: the cause and effect

Datsun’s exit from India will affect the resale value of existing Datsun vehicles.

by : HT Auto Office
written by : Minak Das
Update in:
April 21, 2022, 04:33 PM

Datsun has announced that it has ended production of its redi-GO small hatchback in India.

Nissan has decided to stop launching its affordable small car brand Datsun in India, due to poor sales performance. The automaker confirmed on Wednesday that it has ended production of its redi-Go at its Chennai plant. Two of its other models, the Datsun Go and Go+, have not actually been produced. India has never been a volume-generation market for Datsun, but its withdrawal from the world’s largest small car market means the Japanese auto brand is now only available in a few markets around the world.

(Read also: Nissan concludes the Datsun brand in India as production of the redi-Go ends)

Datsun’s exit may not create a strong ripple in the Indian auto market, but it shows how the small car segment that once ruled the country is shrinking. Datsun sold only 4,296 units in the CY2021, recording just 0.09 percent of the market share. With the exit of Datsun, the small car market in India will shrink even more.

What led to Datsun’s exit from India?

Despite being practical passenger cars, the Datsun models were not able to impress consumers, due to their lackluster features and poor design. The automaker’s cost-cutting measures have left Datsun’s cars vulnerable to poor build quality. The lack of features is something that has played a significant role in making these cars unpopular with Indian buyers as tech-savvy consumers opt for new features. Although Datsun attempted to sell these cars in the name of lower operating costs and lower maintenance costs, the strategy did not work.

In such a situation, it makes sense to focus energy and resources on the Nissan brand and models like the Magnite that deliver impressive sales results for the brand.

The impact of Datsun’s exit from India

Datsun’s exit from the Indian market will not upset consumers in general and industry stakeholders much. However, the current Indian owners of Datsun cars will be worried because of this. Nissan has confirmed that existing Datsun consumers will be able to continue to benefit from service and parts through the company’s existing network.

Nissan said in its statement that it will continue to provide after-sales service, spare parts availability and warranty support from the national dealer network. While the availability of service and parts may not be an issue for Datsun owners, reselling their vehicles will be a headache, with a drop in resale value.

Auto and branding expert Avik Chattopadhyay believes Datsun’s exit will not have any impact on the industry at all. “In fact, it will be easier for Nissan now that there has been no differentiation between brands all this time, just different price points,” he added. But he noted that customers will face the same problems as the likes of Chevrolet and Ford exiting the market. “They are going to lose out hard in resale value,” he added.

Speaking of Datsun’s exit from India, Vinkesh Gulati, President of the Federation of Automobile Dealers Associations (FADA), said that Datsun as a brand has never sped up with quality that does not match the Indian consumer. “There is no doubt that India is a price sensitive market, but Indians also need a good profit for their money as cars remain an ambitious purchase,” he added.

First Publication Date: Apr 21, 2022, 11:39 AM Indochina Time

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