Nissan’s Datsun Brand Off to a Slow Start

The budget-priced Datsun brand relaunched by Nissan Motor Co. in India eight months ago is struggling to meet sales targets, Bloomberg News reports.

Nissan makes the 312,300-rupee ($5,100) Datsun Go five-door hatch at a factory co-owned by Renault SA in Chennai. The company hopes the brand will help it multiply its share of India's auto market to 10% by 2016 from 2% currently.

But Datsun sales have faded in India, Bloomberg notes. It says deliveries, which began in March and peaked at 2,600 units April, plunged to only 600 in July. Sales for March-August totaled just 9,600 cars.

Analysts tell Bloomberg that Datsun faces the same challenge that has blunted sales of Tata Motors Ltd.'s Nano: Status-conscious Indians don't want to be seen driving "cheap" cars.

India isn't Datsun's only market, however. Nissan hopes to sell 40,000 Datsun minivans in Indonesia in the current fiscal year. The company reports sales of about 6,400 vehicles so far but anticipates stronger demand now that it has added the Go model in the market.

Nissan also is introducing the Datsun brand in Russia at a time when experts expect the market to shrink 9%. Nissan remains optimistic about all three markets, shrugging off initially sluggish sales as a short-term aberration.