Following the news that Nissan is close to deciding to axe its Datsun brand;
David Leggett, Automotive Editor at GlobalData, a leading data and analytics company, offers his view:
“Car companies find themselves in extraordinary times right now due to the COVID-19 crisis and the impact of lockdowns and economic recession on sales. A key theme emerging in companies’ response to the crisis is the need to focus on core and profitable activities.
“This is a lesson that, especially, should be taken on board at underperforming Nissan as it looks – under a new management team – to contain costs and turn itself around under its next three-year business plan.
“The revived Datsun brand was conceived in 2013 as a specialist provider of small, cheap models for low income countries such as India, Indonesia and Russia.
“It has had mixed results, with the brand struggling against established competitors in some markets while its low volumes, low-cost price positioning and slim margins kept profitability elusive.
“As Nissan reviews its global business and manufacturing footprint, it is becoming clearer that it needs to concentrate on selling higher margin products, such as electrified vehicles where it has a competitive advantage. Moreover, Nissan should avoid chasing market share – which was a primary driver of strategy in the past – to the long-term detriment of profitability.
“To that end, the Datsun brand – and its additional costs – should be axed. Datsun is a legacy of excessive volume ambitions which the company never came close to fulfilling.”