Ever since the Carlos Ghosn imprisonment and subsequent escape, the Renault/Nissan Alliance has been in trouble. It seems the future of Datsun is in jeopardy now too, is it a case of no more Go?
Nissan is desperately attempting to reorganise and downsize its business, as it suffers more losses and a share price which has nearly halved, this year.
After a terrible 2019, Nissan has awoken to the reality that it might no longer possess the resources to be a volume vehicle brand.
Projections from the Japanese company are for immediate cost savings of R50bn according to Automotive News Europe. Nissan wishes to build fewer cars, with better margins and higher prices. That business strategy means no more cheap Nissans. In fact, Bloomberg reports from a source that the Infiniti brand will see renewed investment as the brand focuses more on the premium sector of the market.
Reducing Nissan’s size and rationalising its business has cast doubt on the future of Datsun, which was revived as a value sub-brand in 2013.
Although vastly popular in developing markets (like South Africa), the profit potential in cheap Datsuns are too small. Nissan is no longer interested in scaling large production and distribution assets, for low returns, which means Datsun has no future.
Emerging market economies and entry-level buyers will be in a very weak economic position after the Covid-19 lockdown. India, Indonesia and Russia are crucial Datsun markets, all facing economic ruin after the Covid-19 economic disruption. For those oil producing countries which were strong Datsun target markets (Indonesia, Kazakhstan and Russia), the crash in crude prices will significantly dent new car sales for many months.
Nissan’s future strategy is to align its products to American, Chinese and Japanese demand, where budget cars are only a peripheral part of the product portfolio.
If Datsun swiftly disappears, it will radically reduce Nissan’s South African presence, where it accounts for most of the company’s passenger car sales.