Datsun exits India: Reason and impact of it

Nissan has decided to discontinue its affordable small car brand Datsun in India, owing to lacklustre sales performance. The automaker on Wednesday confirmed that it has ended production of its redi-Go at the Chennai plant. Two of its other models Datsun Go and Go+ were already not in production. India has never been a volume generating market for Datsun, but its withdrawal from the world's largest small cars market means, the Japanese car brand is now available only in a handful of markets around the world.

Datsun's exit may not create a strong ripple in the Indian car 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, registering a mere 0.09 per cent market share. With Datsun's exit, the small car market in India would further shrink.

What led Datsun to exit India

Despite being practical passenger cars, Datsun models were never been able to impress the consumers, because of their lacklustre features, and shoddy design. The cost-cutting measures taken by the automaker made the Datsun cars vulnerable to poor build quality. Lack of features is something that played a crucial role in making these cars unpopular to the Indian buyers as the modern tech-savvy consumers opt for new features. Despite Datsun's attempt to sell these cars in the name of low running and low maintenance costs, the strategy didn't work.

In such a situation it makes sense to focus the energy and resources on the brand Nissan and models like Magnite that have been fetching impressive sales result for the brand.

Impact of Datsun's exit from India

Datsun's exit from the Indian market wouldn't bother the overall consumers and industry stakeholders much. However, the existing Indian owners of Datsun cars would be in a state of worry because of this. Nissan has assured that the existing Datsun consumers will be able to continue availing of service and spare parts through the automaker's existing network.

In its statement, Nissan said that it will continue to provide the aftersales service, parts availability and warranty support from its national dealership network. While servicing and parts availability may not be an issue for the Datsun owners, reselling their cars would be a headache, with a slump in resale value.

Automotive and branding expert Avik Chattopadhyay believes that Datsun's exit will leave no impact on the industry at all. "In fact, it will be easier for Nissan now as there was no brand differentiation all this while, only different price points," he added. However, he pointed out that the customers will face the same issues as faced by the likes of Chevrolet and Ford quitting the market. “They will severely lose out on resale value," he added.

Speaking about Datsun's exit from India, Vinkesh Gulati, President of the Federation of Automobile Dealers Associations (FADA), said that Datson as a brand never picked up the pace with quality not matching the Indian Consumer. “No doubt, India is a price-sensitive market, but Indians also need a good buck for their money as vehicles remain an aspirational purchase," he further added.