Nissan is planning to launch three new small cars in India.

Nissan is planning to add three new small cars to its product portfolio in next 3 years to tap into the demand for small cars in the India.

In a report says, Nissan to develop three small cars, code named K2, I2 and K11. The K2 will be launched in December 2012 and will take on the Maruti Wagon R and A-Star and will be priced at around Rs. 3.5 lakh. Nissan will use the same 1.2 litre petrol motor in K2 that already powers the Nissan Micra and the company is also considering a 1.0 litre petrol engine for better fuel efficiency. The K2 is expected to be manufactured with two wheelbases, the shorter version for India and the longer version for export markets.


Nissan is also planning to launch an K-based MPV for the Indonesian market. As per sources in Nissan, the company can save upto Rs. 50,000 by using the K11 platform which will be critical in meeting the stiff target price.

Nissan’s upcoming I2 is expected to lock horns with Maruti Suzuki Alto, which is now the World’s No.1 small car. I2 is developed by Defiance Testing & Engineering, a company based in the U.S. and acquired by Ashok Leyland (AL) in 2007. It has to be noted that Ashok Leyland & Nissan have forged a joint venture to develop small car and now we know that it is I2.

We can expect AL to develop the I2 with major engineering work carried out in the homeland so as to keep the development cost down. As the I2 will target Maruti Alto customers, expect this car to be priced around Rs. 2.5 lakh and could be launched in 2013.
nissan micra sedan photo

Nissan also has a JV with Bajaj and a low cost car will be born out of this. Generally known as the Ultra-Low cost car or ULC, we are yet to know if Nissan will include this car under its product portfolio. But, even without including the ULC, the Japanese carmaker is planning well ahead to enter the mass market with its Micra, K2 and I2. Maruti Suzuki, Hyundai and Tata Motors, better watch out!

Nissan also has the option to use Bajaj’s ultra-low cost car (ULC) though it’s not clear if the ULC will form a part of Nissan’s India range. However, with the Micra, K2 and I2, Nissan will have completely covered the budget end of the Indian car market and could pose a formidable challenge to Maruti’s stranglehold.

Meanwhile, the company is likely to reduce prices of its Nissan Micra sedan. It also working to beef up its sales and distribution network in India as that has become a constraint when it comes to maximising sales. Nissan has also launched a diesel variant in December 2010 as diesel cars have been quite popular in India.

Maruti to make Dzire shorter and cheaper

A price war is in the offing in the entry-level sedan segment with Maruti Suzuki looking to downsize the Dzire to under four metre to fit the car in the small car definition and avail lower excise benefits, a move that will give it elbow room to be more price-competitive .

The Dzire, leader in the entry sedan segment , is a hot seller for Maruti and accounts for about 8,000-9 ,000 units monthly. However , the entry of Toyota Etios at a highly competitive price (Delhi ex-showroom price just under Rs 5 lakh for the basic model) has prompted Maruti to go for this rejig.

While company officials refused to comment , it is believed that the Maruti’s R&D team is working on reducing the length of the car to under four metre. In its present avatar, the Dzire has a length of 4.16 metre that puts it in the category of a big car, thus attracting excise duty of 22%.

The length reduction will cut excise by more than half to 10%. The Delhi ex-showroom price of the car is between Rs 4.88 lakh and Rs 7.07 lakh and industry analysts said the duty reduction could result in a benefit of approximately 8% or between Rs 40,000 and Rs 56,000. However, it is not clear how much of this benefit the company will pass on to the consumer.

When contacted, a spokesperson for the company said, “We do not comment on future products and refreshments.”
The Dzire is currently available on 1200cc petrol and 1250cc diesel engine, both of which are appropriate to give it lower excise duty if the length gets reduced.

In reducing the size of the Dzire, Maruti seems to be following the industry trend of downsizing vehicle size to avail of lower excise duty. Tata Motors was perhaps the first one to do this when it reduced its Indigo sedan to under four metre to make the Indigo CS, a car that looked like a sedan but came around the pricing of an upper compact car.

Mahindra is also believed to be doing the same with the Logan sedan and the multiutility Xylo. Maruti is also doing it for competitive reasons. The runaway success of the Etios would be a concern for the company’s marketing bosses as it hits directly at the Dzire.

While low production numbers of Etios (currently 35,000 annually) means that the model may not be an immediate threat to the Dzire, it could impact the model in the long run once Toyota starts churning out more units.

Merc mini may drive into India soon

Luxury carmaker Mercedes Benz is planning to launch its small car, the A Class, in India in a couple of years. Peter Trettin, president and CEO of Daimler, Central and Eastern Europe, Africa and Asia, said the company would position the A Class as its entry- level car in the country. “This will be lower priced in line with competition,” Mr Trettin said.

However, auto experts feel that even the entry level Mercedes will be priced in the range of Rs 16-20 lakh.

Mercedes Benz officials have been talking about introducing this car in India for over a decade, but they kept delaying the launch. Experts say this may be due to doubts over whether a high-priced entry-level car would find enough takers here. BMW too has deferred introducing the MINI in India.

However, Mr Trettin sounds positive. “In the region I look after, India is a growth market and demand is growing because the economy is growing,” he said.

Mercedes Benz India managing director and CEO, Wilfried Aulbur, said sales have picked up since December. “In 2010, our segment grew 80%, but Mercedes Benz has grown 157% and this is without the GL launch,” he said. The Mercedes Benz GL Class is a cross-over sports utility vehicle and it matches, size wise, Audi’s Q7 and BMW’s X5.

Mr Aulbur said the company’s bus order book was full till September. “Demand in the market is very good,” he said.

Mr Trettin said markets in central and eastern Europe have begun to show some recovery in passenger car sales although the commercial vehicle segment was still smarting from the 90% fall in sales.

“We had to buy back vehicles from our distributors, to give them liquidity. We have also offered bridge finance to our dealers since we have to support them. It will take time to grow back but we have cleaned up stocks,” Mr Trettin said.

Daimler’s commercial vehicle sales have been hit in the Middle East too, since the construction industry there faced problems.