Nissan has been struggling to gain a strong foothold in the Indian market for a while now, and its troubles have only worsened with the coronavirus outbreak. In March, monthly sales fell to a new low of 826 units, a terrifying 72 percent drop from the same period last year; the industry saw a corresponding drop of 52 percent overall.
However, when the world comes out of this extraordinary crisis, Nissan is banking heavily on its upcoming compact SUV (codename: EM2) to mount a strong comeback and pull it out of the abyss. In fact, the EM2 is seen as a ‘make-or-break’ point for the company as it is throwing everything it possibly can into this all-new model to ensure it succeeds.
Though the market name is yet to be formally announced, company officials have confirmed that the ground-up compact SUV, built on the Renault-Nissan Alliance CMF-A+ platform, will be called ‘Magnite’ and carry the Nissan badge. The initial plan was to launch the EM2 as a Datsun, until Nissan pulled the plug on its budget brand late last year. However, the axing of the Datsun brand could actually benefit the Magnite. With a Nissan badge on its nose, it’s an opportunity for the company to price the Magnite compact SUV a notch higher as customers would be willing to pay more for a Nissan than a Datsun. However, the good news is that it will still be priced like a Datsun, and in fact, that will be the Magnite’s main weapon.
Known for its sharp focus on the bottom line, Nissan has always been reluctant to get into a price war, and, as a result, its products haven’t offered the same value proposition as their rivals. The Kicks is a case in point – its uncompetitive pricing was a large reason for the very capable SUV’s poor show in the market. With the Magnite, Nissan doesn’t want to take any chances and has gone against its grain by committing to an incredibly aggressive launch price which sources say will be “around Rs 5.25 lakh for the base variant.”
A new disruption
This ridiculously disruptive pricing for a compact SUV around the same size of the Vitara Brezza is just what Nissan needs to buy market share and boost confidence in a brand that has steadily eroded. But it’s not price alone that Nissan is relying on to make the Magnite a winner. Its baby SUV is packed with big-car features including a massive touchscreen and all the connected tech from the Kicks. Higher variants of the Magnite will get a 360-degree camera, two-tone paint options and a premium set of alloys. Company executives who have viewed the car and the teaser images suggest that the Nissan Magnite’s design will be its most distinguishing feature. Official sources have also indicated that the compact SUV will have a crossover stance and won’t look as boxy and upright as the Vitara Brezza, but a few have voiced concerns about it appearing optically smaller than some rivals. However, Nissan’s designers have worked hard to give the Magnite a distinct identity and make it stand out in the compact SUV segment. It gets lots of design details, like sharp creases and character lines across the bodywork, striking headlight and tail-light clusters, chunky wheel arches, front and rear scuff plates, and a two-tone finish.
The Nissan Magnite will be offered in multiple variants at launch. The base model will come with the recently upgraded version of the familiar Renault BR10 engine that also powers the Renault Triber. This three-cylinder, naturally aspirated motor develops 72hp and 96Nm of torque, and is paired to a 5-speed manual gearbox. An AMT option with the BR10 is also a possibility.
Higher variants of the Magnite will get Nissan’s state-of-the-art HR10 engine. This potent and compact 1.0-litre, three-cylinder turbo-petrol will develop around 95hp, and will be available with two transmission options – a 5-speed manual and a CVT. Even the top-end CVT variant is expected to be very aggressively priced with sources indicating it could be “under Rs 6 lakh”.
Ironically, it was Renault that first showcased the Nissan-developed HR10 engine at this year’s Auto Expo. Nissan’s alliance partner will also use this potent engine for future variants of the Triber, as well as the Kiger compact SUV (code: HBC). However, the Magnite will be the first model to get the HR10.
First-mover advantage
Nissan’s current plan is to launch the Magnite this August, in the run-up to the festive season, but the uncertainty surrounding the coronavirus crisis could result in a delay. If there is no change in plans, Nissan will get a jump over partner (and rival) Renault. The Renault Kiger compact SUV, which shares the same platform, engines and mechanicals with the Magnite, is scheduled for a Diwali launch this year, but again that could change depending on how the pandemic pans out.
Historically, Renault has always had the first-mover advantage within the alliance and this has always been a pain point for Nissan. Except for the Pulse and Scala – badge-engineered spin-offs of the Nissan Micra and Sunny, respectively – Renault has always taken the lead when it comes to products built on common platforms. Both the Terrano and Kicks trailed the Duster and Captur (all built on Renault’s M0 platform), while the Redigo remained in the shadow of the revolutionary Kwid with which it shared the CMF-A platform. Renault was also the first to use the CMF-A+ platform which underpins the Triber. However, in the compact SUV race, Nissan has fought hard to be the first one out of the blocks.
In addition to coming first to market, the Magnite is likely to undercut the Kiger’s price by a substantial margin. Also, since the HR10 is technically owned by Nissan, Renault may have to pay an internal transfer fee to use the engine, and this is likely to make the higher variants of the Kiger that much more expensive. “We are successfully present in many segments of the market, our brand is much stronger, so is our dealer network and our life is not dependent on one model. So we don’t need to give a desperately low price for our compact SUV,” quipped a Renault source. That said, Renault won’t price the Kiger out of contention, and has enough aces up its sleeve to put up a strong fight. The Kiger’s design is believed to be brilliant, with clever interior packaging (which is Renault’s forte) that will make it very spacious and practical.
Leadership is vital
However good the Magnite may be, Nissan’s India operations needs strong leadership and focus for it to succeed. Globally, the company is facing multiple headwinds like tumbling profits, senior management shake-ups, declining demand in key markets like China, and the huge vacuum left behind by Carlos Ghosn, all of which have thrown the partnership with Renault in disarray. And all this before the coronavirus ripped the bottom out of the car market.
A recent Reuters report says that the Nissan is looking at cutting 1 million cars from its sales target, which will have big consequences on its global operations many of which will have to be downsized or shut down.
Under the current circumstances, the Indian market, which accounts for 0.4 percentage of Nissan’s global sales, isn’t a priority. There are bigger worries for the beleaguered Japanese carmaker, like the Chinese and US markets. Nissan India has to fend for itself, and that is why strong leadership is absolutely vital.
The good thing (for India) is that for the first time, true-blue Nissan executives are in charge of things. “We need our own people, proper Nissan guys, and not someone from Renault joining because you don’t get the same level of commitment from them,” said a Nissan source. The current global COO Ashwani Gupta, a Nissan veteran of Indian origin, was earlier in charge of the product development for Datsun and knows the market very well. He is believed to be tracking the Indian operations on a daily basis.
Guillaume Cartier, who was recently appointed Chairman for the Africa, Middle East and India region is again from the Nissan ranks. Last September, Rakesh Srivastav, another industry veteran was roped in as Managing Director to take charge of Nissan’s commercial operations in India. The company is banking on Srivastava’s experience of over two decades in Maruti Suzuki and Hyundai Motor India to pull it out of the mess it is in, which many attribute to a legacy of poor leadership.
For Nissan India, it is absolutely critical the Magnite succeeds to gain the confidence of the company’s global management. “The problem is that India operations are no longer credible in the Nissan world because every time the Indian team has promised something, it has never delivered,” said a Nissan insider. Future investment in new models and technology also hinge on the Magnite’s success. If it does well and emerges as a glimmer of hope in the company’s troubled world, then India will be back on Nissan’s radar.
On the face of it, Nissan India has left no stone unturned and is set to launch the Magnite with all guns blazing. However, the COVID-19 cloud, which still hangs heavily across the world, could be a spanner in the works. A big worry for the entire auto industry is that weaker dealerships won’t economically survive a prolonged pandemic. They could end up bankrupt and and be forced to shut shop. A depleted dealer network and crushed consumer demand in the aftermath of the coronavirus crisis will see volumes plunge to new depths. It’s not the best time to be launching a new car, but if there is a surprise in store for us in 2020, it could just as well be the Nissan Magnite.
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