 "Nissan India President Guillaume Sicard")
Having spent a year in the crowded Indian car market, Guillaume Sicard of Nissan India is still figuring out the dynamics of the trade.
"I have worked in many countries. After a year, you normally master the environment. After 12 months here, I still feel I have a lot to learn. It's a complex environment, a complex market," says Sicard, president of Nissan India.
The Indian passenger vehicle market has about a dozen players but most of them are struggling to maintain a low single-digit share in a market dominated by a handful of players. "I need some more months to have a better understanding of the overall set up of all original equipment makers in terms of engineering, manufacturing, sales and marketing," he says.
Sicard is faced with the challenge to grow the company's share in the Indian market and deal with the complexities of government policies. The company, through its alliance with Renault, had invested Rs 6,100 crore in a manufacturing unit in Tamil Nadu based on certain fiscal incentives promised by the state government.
However, incentives worth Rs 2,700 crore are estimated to be due to the company from the state. The matter has been brought to the Centre's notice by Nissan, which now awaits clarity before going ahead with its second round of investments in India.
"We are busy looking at our second round of investment in India. We would like to invest in Tamil Nadu. We have worked extensively on this with the state government. To make sure the next round happens, we need to fine tune some aspects of phase I to go to Phase II. Investment is ready from our parent company," says Sicard.
One may wonder why Nissan wants to invest more when only 60 per cent of the 400,000 unit capacity is being utilised between Nissan, Datsun and Renault, large numbers of which gets exported.
"We know that we will be launching more products and selling more in the domestic as well as export market. So we need capacity," he says, adding that in India the company wants to grown its market share from less than 2 per cent now to 5 per cent by 2020. If Nissan wants to be a major player in the world with 10 per cent market share by 2020, it needs to have a good market share here.
Most car makers want to expand share in India, a market predicted to grow rapidly in the years to come. But it is not going to be a smooth ride. "India is a difficult market because it is dominated by three manufacturers that have 71 per cent market share. In 2012, they were doing 56 per cent. This is quite unusual. In no other market, you have one brand doing 50 per cent and top three doing 71 per cent. It's extremely difficult because global OEMs face a hard time trying to penetrate because the three players are extremely big. All others need to be extremely innovative and perseverant while trying to crack it," says Sicard.
At present, Nissan sells over 60 per cent of its product in the export market. A greater focus on Indian market means a gradual decline in exports. "Ideally, we would like to gradually reduce exports and increase domestic presence."
Nissan will not only have to compete against the well entrenched players like Maruti Suzuki, Hyundai and Honda but also against players like General Motors and Ford that are making constant efforts to get a larger pie of the market.
Nissan is not rethinking its India strategy. "We knew it was going to be difficult in the domestic market and good amortisation of our fixed cost export was important. The strategy was 100 per cent right. Today, the set up is profitable based on three brands and exports. We need to fine tune the strategy in domestic market. It is taking more time than we thought," he says.
Nissan wants to work on strengthening its brand. "When you are a young company and your brand is not well known you need time. In five-seven years you cannot become a trustworthy brand like Maruti, Hyundai or a Honda. These all have been here for ages," adds Sicard.
Sicard says there are many customers who like the Datsun Go after a test drive as the car is good, spacious, fuel efficient and has a powerful engine. "When they go back home and discuss with their family and friends, you know what is going to happen. It is very difficult to change the traditional mindset though it is evolving," he says.
With its Nayi Parampara campaign for Datsun Go, Nissan hopes to break that mindset.
