Jul 21, 2013, 01.12 PM | Source: CNBC-TV18

Nissan to turn profitable in India by 2013-end: Ghosn

Nissan is planning to unveil Datsun’s hatchback model ‘Go’ by early next year. Reviving the brand after three decades, Carlso Ghosn claims it is bigger and wider than its nearest competitor the Maruti Alto.

With our range of products and the capacity of our plant in Chennai, we offer a proposal that consumers in India cannot refuse and that is what makes us confident

Carlos Ghosn

Chairman & CEO

Renault & Nissan

Renault-Nissan head Carlos Ghosn sees the company turning profitable in India by end 2013. Renault-Nissan will outgrow the rest of the auto industry in 2013 as well as 2014, Ghosn says.

"We still think that this market will be above 4 million cars by 2016, which means after the production that is taking place, growth will resume," he says in an interview to CNBC-TV18.

Nissan is planning to unveil Datsun’s hatchback model ‘Go’ by early next year. Reviving the brand after three decades , Ghosn claims it is bigger and wider than its nearest competitor the Maruti Alto. This coupled with a price tag of under Rs 4 lakh, Nissan hopes the ‘Go’ will win buyers a way from the big boys in the small car business.

The comeback of this launch is being led by Vincent Cobee, the global head of Datsun, who believes the new car will be priced substantially lower than Rs 4 lakh.

Furthermore, Cobee sees India as an extremely competitive market with capable set of engineers and localised suppliers, which makes for a very good manufacturing hub. “This car will primarily serve the Indian market. But we are all businessmen and if there is an opportunity to export to some other markets we will consider it positively,” he adds.

Below is the verbatim transcript of their interview on CNBC-TV18

Q: Is Datsun your new ultra low-cost car?

Ghosn: No, the Datsun is not the new ultra low-cost car. Datsun is about reliability, modernity, affordability and high value. With the latest technology, the Datsun is about bringing back these values to high-growth markets such as India.

Q: Is there a future for the ultra low-cost car?

Ghosn: Yes.

Q: So you are not giving up on that?

Ghosn: Not at all. You are going to see ultra-low-cost car coming. You are going to see cars coming at a lower price points and addressing different kind of markets. There is a huge demand for cars with high value and affordability.

Q: What gives you the confidence?

Ghosn: I was the first one to recognise the value of the Nano because it addressed a need that nobody had.

Q: But the car failed?

Ghosn: That is a different story. The car is the answer to the need and the need is still there. There is a potential for a car that can meet those needs and that is what we are pursuing.

Q: When you are going to launch a low-cost car?

Ghosn: Within the next two years.

Q: Will it be priced lower than the Datsun but higher than the Nano?

Ghosn: Exactly. That is exactly the specific price-point that we will be aiming at.

Q: Will Nissan launch the model in association with a domestic partner?

Ghosn: Let us first launch the Datsun. This is not the end of what we will launch in the high-growth markets. With a strong stable of models under the Datsun brand, we will then focus on our version of the ultra-low-cost car.

Q: Do you believe that you can continue your partnership with Bajaj Auto on the quadricycle?

Ghosn: We do not think that we have to do everything that others do. I think Bajaj has a very original vision and are have been very successful in the market. But I do not think we can replicate what they do. We will launch our own answer to those  needs in the market. Though I do not think we are going to launch a quadricycle in India, but our vision is to launch an ultra-low-cost car.

Q: That will be with Ashok Leyland or without Ashok Leyland ?

Ghosn: We have many partners in India. That is what I love about India —there are so many people with whom you can work with and learn from. So, it's a two-way street. This interaction between technology and learning the way of doing things in India is what I call frugal engineering with which you can make very powerful products.

Q: After being in India for almost five years through Renault and Nissan, how do you plan to achieve your target of a 10-percent market share by 2016?
Ghosn: I can understand the skepticism because four years ago we were selling hundreds of cars in India.

This year we are close to achieving, as an alliance, a 5-percent market-share in 2013. With our range of products and the capacity our plant in Chennai, we offer a proposal that consumers in India cannot refuse. That is what makes us confident.

Q: What about the risk of an overlapping of brands?

Ghosn: Though the pieces of technology are the same, no two cars are alike. Each is different in design and offer completely different choices.

Bajaj Auto stock price

On November 26, 2015, Bajaj Auto closed at Rs 2462.40, down Rs 16.45, or 0.66 percent. The 52-week high of the share was Rs 2673.00 and the 52-week low was Rs 1913.80.

The company's trailing 12-month (TTM) EPS was at Rs 118.56 per share as per the quarter ended September 2015. The stock's price-to-earnings (P/E) ratio was 20.77. The latest book value of the company is Rs 369.50 per share. At current value, the price-to-book value of the company is 6.66.

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