Those who read my articles on Riot Engine rightly conclude that I am a bit of an idiot. But believe me, even I do not believe that this letter is actually addressed to Carlos Ghosn, the wunderkind (if you can call a mature gent that) and that he will respond to what I have to say here. I have been reading too many Man Booker Prize winning novels and Pullitzer prize winning articles and therefore have decided to become a little pretentious and write in a manner which is befitting of award winning authors. You see despite my old age, I am still susceptible to puerile desires, but what the heck what are we if don’t indulge ourselves a bit, every once in a while.
The auto industry like most industries is vertically bifurcated. On the side of the divide you have maverick designers (my personal favourite being Chris Bangle) and on the other side are those that the first side calls “the suits”. The latter category comprises of people who do all kinds of market surveys, feasibility studies and customer profiling (and are usually way of the mark and that is why products bomb with aplomb on a regular basis) and form a tag team with the finance chappies (more suits in colours duller than gray) and dictate to the designers as to what will sell and what will not. Their presence in a company is usually so overpowering that they can actually drive the likes of Chris Bangle away from automotive design for good. Now if you are wondering what all this has to do with Carlos Ghosn and Datsun, it is time for me to explain.
We know the story of how Mr. Ghosn turned Nissan from inefficiency to efficiency (though this process usually involves thousands of people losing their livelihoods on the one hand and “rationalizes” platforms on the other) so I will give that bit a miss. I also do not need to tell you that Mr. Ghosn is a superstar in his own right, someone who is very ambitious and sets stiff sales target for the Renault-Nissan combine and usually ends up meeting them. Carlos Ghosn gave to the world a phrase called “frugal engineering” after he saw how Indian companies like Tata and Bajaj were churning out products at incredibly low costs. Carlos Ghosn wants to create a culture of frugal engineering in his empire, for after all who does not want to make inexpensive cars and sell them in large numbers? The astute Mr. Ghosn knows that his key to unlocking the sales numbers that he desires lies in this whole thing called frugal engineering. It is here that Ghosn also faces a problem of sorts.
Both Renault and Nissan are names that already stand for something and it would be disastrous to tamper with them. Renault is a known innovator in Europe associated with small cars which are cutting edge technology driven and also is a name in diesel engine technology. Nissan in Japan was at one time the second biggest car maker only behind the venerable Toyota before it lost its way and started a free fall and was saved by Ghosn and his team of suits. All over the world Nissan also stands for certain values and those cannot be tampered with. While most people tell Carlos Ghosn’s story they usually forget mentioning Dacia, the once beleaguered Romanian car manufacturer that Ghosn picked up for Renault.
Carlos Ghosn’s reasons for picking up Dacia were very clear. Here was a brand from an erstwhile iron curtain country, one that had no reputation whatsoever. Ghosn being the astute number cruncher that he is saw sense in introducing inexpensive cars that could be bought by the not so affluent. And thus the Logan was born. It was inexpensive alright, but that was by European standards. I would like to remind you here that Europeans and Americans do not have a concept of thrift. They are rather lavish in most things that they do and that is why the sub prime housing crisis and the Eurozone crisis have happened. So there is the Logan which is dynamically alright, solid engineering wise, but hopeless in styling terms. It worked in Europe however. But Ghosn knew that he cannot get the numbers he wanted from the existing markets. He had to expand to newer ones.
The last few years have shown that the drivers of the world economy are the BRICS countries meaning Brazil, India, Russia, China and South Africa. You can also add Indonesia to this list of countries. Therefore it was obvious for Carlos Ghosn to look at emerging markets such as the BRICS markets. India has fascinated Ghosn tremendously. He saw what Tata had done with the Indica (including the Vista) and the Nano. He realized that frugal engineering does not have to sacrifice style which the Logan and its derivatives had done. Frugal engineering was just a completely different mind set. It has taken him a couple of years but now he seems to have come to terms with the mindset of frugal engineering.
Add to this understanding the fact that neither Nissan nor Renault have taken off in a big way in India and possibly in Russia and Indonesia as well. It is therefore clear to Ghosn that some reinvention of things was necessary and out of this thinking emerges the Datsun brand resurrection. For the time being it is being said that the brand will first make its appearance in India, Russia and Indonesia and the reasons for this are pretty straight forward. Datsun is a brand that is well remembered in these countries. In India, Datsun was well known due to many embassies and organizations such as ICRISAT having the Datsun Bluebird models in saloon and estate models. These cars were purchased literally in thousands and after a couple of years disposed off through auctions as legitimate imports. The Datsun Bluebird was pretty much a common sight at one time in Delhi (where the embassies are) and Hyderabad (where ICRISAT or International Crop Research Institute for Semi Arid Tropics is) and in other metros once the disposal through auctions started happening. This was also the time when the red, blue and white stickers of Datsun were freely available in the market and I had put one on the stepny cover of my father’s scooter which was therefore referred to as the Datsun Vespa.
Ghosn and Co are now resurrecting the brand with newer values of inexpensive engineering or frugal engineering if you like. This will most probably involve the use of old platforms which would have depreciated substantially from the Renault-Nissan stable. Please remember that in countries like India and Indonesia people do not pay too much attention to the fact that something is built on an old platform. The case of the original Indica is a case in point. It still sells alongside the Vista in possibly equal numbers. The Maruti 800 virtually unchanged from 1985 still sells a couple of thousand cars every month and the fall in numbers is mainly due to the fact that the car does not have a BSIV compliant engine and therefore cannot sell in many cities. The present Alto itself dates back to the Wagon R platform of 1998 and sells in numbers that I do not have tell you about. The marketing acumen of Carlos Ghosn has yet again come to the forefront. The Datsuns of the future will be cars built on older platforms but customized to the specific tastes of countries like India, Russia and China. Datsun will also spawn vehicles similar to the Tata Ace, the Mahindra Maxximo and the likes. I have read some speculations that Datsun cars will also be branded as Renault. I disagree. If at all there is a necessity for another badge, Renault will use Dacia but that is not something that I foresee as happening. Datsun will be country specific and deliver competent technologies at affordable prices, hopefully with a dash of style as well. Let me know your thoughts as well.