The depreciation of the rand is threatening to derail the drive by Japanese vehicle manufacturer Nissan to relaunch the Datsun brand in South Africa in the fourth quarter of this year, with a model priced at under R100 000.
Vincent Cobee, the global head of Datsun, said yesterday that the plan still was to launch the Datsun GO at a price below R100 000, making it a real value proposition for first-time new car buyers. But he added that the strength of the rand would determine if this was possible.
“We can’t predict the respective evolution of the South African rand versus the Indian rupee,” he said.
The car will be imported to South Africa from the Nissan-Renault alliance manufacturing plant at Oragadam near Chennai in India.
Nissan retired the Datsun brand in 1981. It announced last year it would relaunch the brand in emerging markets, initially targeting Indonesia, India, Russia and South Africa.
Datsun was a top selling brand in South Africa between 1976 and 1978.
Cobee said there was a dream and a wish to manufacture Datsun cars in South Africa in the future, but not necessarily the current launch model. However, he said there was as yet not any plan in place for the local production of Datsun models.
“If we manage to get our act together in Africa, there will be a lot of demand… in the 50 plus countries north of South Africa. As such, it would make a lot of sense to make cars in South Africa,” he said.
But Cobee said the “economic equation” did not work at this time to allow Datsun to manufacture in the country.
The most important determinants of this equation were cost competitiveness, predictability and volume, he said.
“It’s a multi-party discussion. I need to find a way to get the volume… [and] a competitive car but it takes two to tango.
“I also need to be collaborating with a consistent industrial structure, which is our suppliers, our plant, government, regulations and social relations that make it a bankable business case.
“We have tried; we have made progress but we are not there yet,” he said.
Cobee said the return of Datsun to South Africa was integral to Nissan’s expansion in high-growth markets where there were increasing numbers of upwardly mobile people.
These high-growth emerging markets were expected to account for two thirds of the purchasing power parity of the global economy by 2030 compared with only a third in 1990.
Mike Whitfield, the managing director of Nissan South Africa and president of Nissan’s Africa South regional business unit, said the launch of a third Nissan brand into the local market to complement the Nissan and Infiniti brands was in line with the Nissan Power 88 mid-term plan to achieve an 8 percent global market share and 8 percent operating profit by the end of its 2016 financial year.
About 50 of Nissan’s dealers countrywide would sell the new Datsun model, requiring each dealer to invest between R250 000 and R500 000 in a dedicated showroom, he said.
Whitfield said the relaunch of Datsun would create about 65 jobs because it would have a dedicated sales force.
He said the Datsun GO would compete in the high volume B-segment of the passenger car market and its target was to sell about 500 to 700 units a month, which would help to increase Nissan SA’s overall market share to close to 10 percent from 8.6 percent last month.