Kenichiro Yomura, president, Nissan India Operations, and MD & CEO, Nissan Motor India, tells Shobha Mathur that while domestic sales are a priority, vehicle and parts exports are also a focus growth area.
20 Aug 2014 | 5999 Views | By Shobha Mathur
Kenichiro Yomura, president, Nissan India Operations, and MD & CEO, Nissan Motor India, tells Shobha Mathur that while domestic sales are a priority, vehicle and parts exports are also a focus growth area.
How does Nissan view the challenges to future growth of exports from South India?
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Kenichiro Yomura, president, Nissan India Operations, and MD & CEO, Nissan Motor India, tells Shobha Mathur that while domestic sales are a priority, vehicle and parts exports are also a focus growth area.
How does Nissan view the challenges to future growth of exports from South India?
We are here because we have an aspiration for the Indian market. In order to become a serious contender, we need to produce locally, be cost competitive and secure big volumes. That is why Nissan decided to form a joint venture and do domestic and export business together.
We are still young in the Indian market so the export volumes are now bigger than domestic sales volumes but our aspiration is to grow in the Indian market. Actually, exports can be carried out from any other country as well since Renault Nissan has various manufacturing plants and investment in new plants is not required. We can shift the production source to somewhere else. So export is in more de-active mode because we are exporting the Micra to Europe and the Sunny to the Middle East but how many depends on our performance in the Middle East and Europe. I would be happy if there are more sales of Micra and Sunny in Europe and Middle East.
Some OEMs are believed to be diverting production to Thailand and other markets due to poor port and logistics facilities in India compared to global markets. Does Nissan also have a plan to leverage its Thailand plant by shifting some export production from India to Thailand?
In the long term, some of the production source moving around some models can be made outside India and some others in India. We have already made a big commitment of over Rs 55 billion till now and have a 480,000 unit production capacity at Oragadam. So at this moment there are no plans to shift any production to the ASEAN.
The export models and domestic models are similar both for the Sunny and the Micra. No, I don’t currently see any such movement.
We currently use the Ennore Port for vehicle exports while part exports and incoming parts are shipped through the Chennai Port.
Will Nissan chalk out a roadmap for leveraging the Chennai facility for exporting parts for electric cars like the e-Evalia and maybe later the Leaf to Bhutan and other potential markets for electric cars?
I don’t know. We don’t produce electric vehicles in India currently and in Bhutan we are trying to see. We don’t produce parts for electric vehicles in Chennai. Electric vehicles are produced in Japan and they have a local supplier for it. If we produce the parts here and ship them to Japan, it does not make sense.
We don’t make EVs in Bhutan as the complete, finished vehicles are shipped from Japan. No, we are not looking at setting up an assembly facility in Bhutan for EVs either.
Which are the new markets Nissan plans to tap in 2014-15 both for car and component exports? How much do you expect Datsun to contribute to exports?
We are increasing our export destinations to include South America and East Asia but volumes are small. The Sunny has several manufacturing locations like Thailand, China, Mexico, Egypt and India; so it does not make business sense to ship the vehicles from India to right-hand-drive countries.
But in terms of components, we are expanding parts exports a lot and last fiscal, were the second largest parts export centre after Japan. We shipped completely knocked down parts to Egypt for local assembly of the Sunny and are exporting parts of the Micra where they are needed. We even export parts for those models that we don’t produce in India to Japan and other countries. Nissan India’s performance is good and getting better and better. Maybe the new Sunny will be exported to the existing markets.
Datsun has started production in India, Indonesia, South Africa and Russia and being a low-cost car, exports will not be a big concept. However, I cannot say that all three Datsun models (Go, Go+ and Redigo) will not be exported.
Which are the export markets that are faring well and which ones does Nissan see as being potential growth markets?
Exports to the Middle East are doing very good as the economy there is booming. Europe is recovering, some exports are to Africa but we don’t export too much to the ASEAN except parts.
Nissan Motor India notched growth of 17.52 percent in FY’14 in exports after a dip in FY’13, even going past competitors. What has been the strategy behind the company's exports picking up steam?
For Nissan Motor India, export is an important part of our business but still our priority is domestic sales, so we never try to compete with anyone for the number one or two position in exports. We just want to satisfy Nissan customers in destination countries with good supplies.
Will India be leveraged as an export hub for Nissan in line with its Power 88 plan, particularly as new models are soon to be launched?
No, we came here to grow in the Indian market because it is necessary to be price competitive, which is a very necessary requirement here so we decided to export as well. I think we may have been constantly exporting more than 100,000 units for the year and maybe there will be some increase but it will remain in similar volumes.
How much customisation and tweaking is required for cars made for export markets?
We try to accommodate local customer needs and Indian needs in the domestic market. Climate-wise, the Middle East is a hot region which means there are several aspects that have to be looked at. Europe, in comparison, has a lot of snowfall that calls for more special coating on the steel used in the vehicles.