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Nissan India, Ashok Leyland target Innova segment

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Nissan Motor India, subsidiary of Nissan Motor Company, Japan, and its partner, Ashok Leyland, are planning to exploit the mass people-mover segment dominated by Toyota, with two new vehicles scheduled for launch next year.

This will be the first time Chennai-based Leyland, with presence only in commercial vehicles, would enter the passenger vehicle space. The product, a multi-utility vehicle (MUV), will battle for share with Toyota’s Innova and Mahindra’s Xylo.

While Leyland will play the pricing game at the lower end (Rs 8-10 lakh), Nissan will also come out with a product, to be placed a bit on the premium side, according to a senior official from Nissan Motor India.

Kiminobu Tokuyama, managing director and CEO, Nissan Motor India, said, “We will market our product in the same segment, but will target at the mid-premium segment. Ashok Leyland will target the mass market in the same segment.”

An Ashok Leyland spokesperson refused to provide any comments for the matter. The joint development is a result of the joint ventures Nissan and Ashok Leyland are involved in, since 2007-08. Both companies are also engaged in development of light trucks, engines and vehicle parts. The MUV/MPV segment has recently come into the limelight after the category reported growth of 27 per cent in 2009-10, with sales of 422,989 units. A slew of companies such as General Motors-SAIC, Toyota Kirloskar, Mahindra & Mahindra, Tata Motors, Ford India, International Cars and Force Motors are developing vehicles for this space.

Nissan will make significant product differentiation to its own MUV/MPV in the areas of design and styling. Nissan’s product will have a more sporty look, to maintain the premium tag the company enjoys in India.

Joint platform
Both Nissan and Ashok Leyland will use the same platform for their individual products, a strategy increasingly gaining significance across the world. For instance, Volkswagen shares a platform developed for a premium sedan for the Audi with SkodaAuto. This is being done by companies to keep costs under check, while attaining economies of scale through a larger bouquet of products. Building new platforms is considered the costliest effort while building a vehicle from scratch. An MUV platform can also be used for building an MPV and vice-versa.

Meanwhile, Nissan is also gearing to launch a mid-segment sedan in the second half of next year, which could be placed against Maruti Suzuki’s SX4 or the new Volkswagen Vento. Both sedans are priced in the range of Rs 6.5-8.5 lakh. Tokuyama, however, refused to provide any guidance on the pricing of the sedan, which would be based on the V platform.