Why Datsun died

The challenges that led to Datsun’s demise weren’t external, rather most came from within.

Published On Apr 20, 2022 03:39:00 PM

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On the back of GM and Ford pull-outs, it’s easy to dismiss news of Datsun’s demise as another brand that got India all wrong, except this isn’t only India, it’s global, and the reasons for the shut down have nothing to do with tough markets.

What really led to the demise were simply far too many setbacks from within. To begin with, the brand’s relaunch was at a time when Nissan itself wasn’t in the pink of health. Sure, the company did see Datsun as the panacea, but starting a new brand and maintaining it takes a lot of money.

And yes, Datsun and Nissan did share platforms, factories, and even distribution and dealerships in what it called ‘co-habitation’, but even then, designing differentiated products and marketing them takes a lot of money. And besides, co-habitation comes with its own challenges, just ask Tata and Fiat.

There was also Nissan’s global fall in sales, its stagnation in the US and European markets, the Carlos Ghosn scandal (incidentally the man behind the revival), and, of course, the electrification hurdle looming. Challenges strong sales could have helped with, but sadly for Datsun that proved to be its biggest hurdle and much due to its own doing.

Revived in 2013, Datsun was to form the entry level, with Nissan in the middle and Infiniti at the very top. Unfortunately, rather looking at entry level from a segment point of view, Nissan chose instead to look at it from a price point. No Datsun was to cost more than a certain amount, which in India was roughly Rs 10 lakh.

Sadly, to arrive at those prices, there was little reliance on innovative manufacturing. Instead, the cars had simple styling and looked a generation old, features were sparse, and materials were skimped on in very visible places, like the exposed metal work inside.

To me, these brutal cost cuts and the price ceiling were Datsun’s biggest disaster. In my previous stint at an automotive training and consulting firm, I had worked with the company during its India entry and was crushed to hear of its strategy. Ever since I’d heard of the revival, I had hopes of a resurrected Fairlady or more realistically, a 240Z leading the re-emergence as a brand shaper of sorts. I even questioned the international management as to why this wasn’t the case, only to be met with a general agreement but countered by rational arguments of volumes and project profitability.

It didn’t make sense to me, a brand shaper is crucial for any brand launch, revival or otherwise. Besides, as I stated earlier, entry level should really have been segment wise, going price wise means you’re simply cheap. Think of Samsung, their phones are by no means cheap, but compared to Apple they are entry level. That, in essence, is where Datsun failed.

The brand should have formed the ‘entry’ level in various segments – value for money small cars, value for money sportscars, value for money luxury, all products Datsun should have built. The brand should have been positioned as the smart, intelligent, value for money choice, but instead it was simply the cheap one.

And that essentially is what Datsun failed to see, no one wants cheap, but people buy value. Hopefully, others will pay heed. But worryingly, there’s another brand waiting to launch its ‘affordable’ product that, suspiciously, looks more like ‘cheap’. But all said and done, Datsun is dead, but hopes for my Fairlady are still alive.

Also See:

Nissan pulls the plug on Datsun brand in India