Datsun on DO may suffer from declining car market in Russia
Datsun launched on-Do sedan at starting price of 329,000 roubles (Rs. 5,63,985 approx.). Renault-Nissan joint venture Avtovaz locally produces cars for Renault, Nissan and now Datsun as well. On-Do, upcoming mi-Do and Datsun SUV were intended to appeal to Russian families as low cost foreign cars.
Vincent Cobee, Head of Datsun at Nissan Motor Corporation, said to Reuters that target audience was primarily young families, around 35 – 40 years old, who have owned cars (mostly second hand) and looking for an upgrade to more premium / international car within affordable price bracket. Datsun on-Do will offer Japanese styling, performance and comfort, at feasible expense, since it is not imported.
Plans were good and success was almost certain, but the market is struck by inflation and car sales among others sees hard drop. 17 percent decline was recorded in June compared to last year; looks like performance is worst this year since 2008-2009 global economic crisis.
Luxury car sales are doing better than budget models. According to Vitaly Pavlovsky, Executive Director of Rolf dealership network in Russia, that sells only foreign brands, healthy demand for luxury cars resulted in 14 percent hike in first 6 months, but in June sales fell by 5%.
Russian brands like Lada and UAZ constitute only about 20% of market there, remaining 30% is imports and 50% is locally made foreign brands.
Datsun on-Do is possibly launched at a bad time, as families are loosing capability of making sizeable purchases and investments. On the upside, those who were planning for higher value automobile, could benefit out of new on-Do.
Russia has increasing market for second hand cars, which grew by 4.1% last year. Datsun on-Do would compete against with its compelling price tag.
Via – Reuters