In Conversation: Christian Mardrus, Senior VP, Nissan/Datsun India, Africa and Middle East

One of the key personnel involved in the coordination of the alliance activity between Renault and Nissan, Christian has been a part of one the greatest phenomena in the global auto industry of late. The coming together of two global car giants for mutual benefits has yielded results which are there for everyone to see, and Christian has been at the very forefront of the success story.

An engineer by education, holding double master’s degrees, Christian started his career in the telecoms industry at a consulting company based out of New York. He later joined Otis Elevators holding a variety of roles before becoming the Director of Service Operations for France.

He then joined Renault as a Director for Sales and Service Information Systems before becoming the Vice President of the Global Service Division in 2002. He spent six years overseeing the coordination of the Alliance activity between Renault and Nissan, initially as the Managing Director for the Alliance Global Logistics Division and then as the Executive President.

Christian is extremely proud of what the Renault-Nissan Alliance has been able to achieve, and his involvement in it. “I was at the heart of the Alliance strategy at the beginning, and Renault and Nissan together are now the fourth largest automotive group in the world – that’s incredible. Throughout I have had the opportunity to work with talented executives and staff from both companies – really changing the way our businesses, and also the industry, does things” he quips

Christian believes that Nissan is a very flexible company and that’s part of the reason why it has enjoyed substantial successes over recent years.

In his current role, Christian is responsible for all of the business operations for Nissan and Datsun in Africa, the Middle East, and India. He oversees the sales functions, manufacturing, profitability, and all of the activity related to the regional operations. There are three manufacturing plants located across these regions, in Rosslyn, South Africa; Chennai, India; and Giza City, Egypt.

We got a chance to discuss Nissan’s strategy for India with the key strategist at Nissan’s global HQs at Yokohama. Here we have the key elements from the interview, detailing what to expect from the carmaker in the short and the long term.

What is Nissan’s positioning and its identity — what does Nissan stand for in India? Can you clarify that?

Nissan has three brands, Datsun, Nissan and Infiniti. India is one of the countries where we have both Nissan and Datsun brands. The objective of Nissan and the measure of Nissan in India needs to be consistent with our overall position, which is Innovation that Excites. This is our aim, not what we are today. There is a gap between what we are today and what we plan. We understand what we have to do to make it happen and make it a reality.

Datsun, according to me should be “smart buy” – some features and performance with a certain range of price that you could not afford with another brand. This is very similar with what Renault is doing in another continent with Dacia. “Smart buy” is not low cost. This means that with Datsun you may have more features, more performance for a similar price. This is the different positioning and what we are aiming for with the two brands in India.

Can you give some signs of Nissan innovation in India?

Example of Innovation in India was with the Micra introducing a stop/start button, other product is the Terrano, which has different features compared to the Duster, even though based on the same platform.

For Datsun, it is not necessarily innovation in the pure picture but we are creating something that doesn’t exist exactly. Datsun is bringing something more for consumers for similar prices than the competition, so this is also innovation. We may also expect more innovation for the Datsun brand in the coming months.

For Nissan, we are working on – I wouldn’t say an aggressive plan – I would say a very focused plan for India because now everyone agrees we cannot just develop models for India, or for specific markets, because we need volumes to leverage. But we have to include India-specifics in the core design of our products. So we have launched action plans and projects in order to deliver to the market innovation and new products, but new products with a look and feel for India. New products not only made in India, because as you know our products are made in India, but also designed for India.

So there will be global models which will also be sold in India?

It’s always the case. When you look at the Micra, or when you look at the Sunny, these are global models. By region, we are selling those models almost everywhere. Micra we are selling in Europe; Sunny, we are selling it in many countries. So today we have some global models which we are selling in India. What I am saying is, for the future products, I am not saying they will be developed just for India, which would be a mistake, but in the genes of those products India requests will be included.

So there won’t be India-specific models, but the global models will have India specific requirements in their genes so this will be recognized in India.It’s interesting, as I said, you cannot compare the models in the Middle East and in South Africa and in India, but when you look at customer requests and forecasts there are some similarities.

In India there is a growing market and a growing economy, with a new generation of people, very young, with high aspirations. It’s very similar in other countries. If you look at the evolution of Africa, when you look at the market trends and the customer expectation trends, there are a number of similarities. In many of the markets in my region, the economies are growing and in general there is a feeling of optimism. When you have a feeling of optimism you are more willing to invest because you believe tomorrow will be better than today. When you buy something, you buy something taking into consideration what will happen next year and the year after, which is a very positive trend. This is why we consider that some of the models that we are working on will be launched in India will have some features and some genes that could answer some requirements of our global markets.

A couple of years ago you announced that production of next-generation Micra would move to the Flins plant, at least for European consumption. Micra is one of the most-exported cars from India. Once this product moves outside of Flins, and this product is also nearing the end of its lifecycle in India, what product is going to fill its shoes? Also, X-Trail was the only crossover that was launched in India but was discontinued some time back. So will you re-launch something in the crossover space in the Indian market? You have the Terrano, but Juke and Qashqai and X-Trail are big sellers in Europe. So what about introducing crossovers in India?

Micra exports are quite important today, and it is working well. It’s official that we decided the next Micra for Europe will be produced in Flins. So a few months after the launch there will be a reduction in the production of Micra in our plant in India for export. We are also exporting Sunny from Chennai, quite importantly. But this doesn’t mean that there will be no exports in the future. I think we were very wise when we developed our plan and our Indian strategy to have this mix between domestic and exports because, when you look at this Renault-Nissan plant, the first one implemented in the world, in terms of production (not in terms of capacity), we are number 3.

The more volume you have, thanks to export, gives us a competitive edge, and also in the domestic market.Some of our competitors have made different choices in terms of focusing just on the domestic market and are facing difficulties. So I think it was wise when we started our business in India to say ‘of course this plant will be focused on domestic market needs for both brands (Renault, Nissan and now, Datsun) but also for export.’ This gave us oxygen to start and grow our business in India.

But now, looking at the challenges, we cannot rely just on exports. We have to develop our domestic market, we have to improve our competitiveness for the domestic market, and our plant has launched action plans in the last year and half not only to improve quality and processes, but also to be much more competitive. This means more competitive in terms of manufacturing but also to improve total delivery cost which includes purchasing, engineering and localization. So a strong plan has been launched in order to improve our costs overall and in order to improve our competitiveness of the plant.

In our company we also have internal competition. We have launched this common plan and we have good visibility on what can be achieved in Chennai to be more competitive for the domestic market and also to deserve models to be exported from India. So, as I said, there are number of models which have similarities for my region. So if we are doing it right, we may expect that the plant in Chennai could be a good source for my region overall. Exports are important and will continue to be important, but equally with domestic.

The second question regarding crossovers, you‘re right crossovers is an expanding segment and even if we consider the discontinuity in the past we want to be present in this segment and you will see in the coming, maybe months, that we will be more aggressive in this segment.

You talked about global products with local, Indian flavour. Let’s flip the coin, lots of Indian manufacturers and non-Indian manufacturers have made sure they made a India-specific product and then launched it outside, say with a European flavor, and these products are doing well. Have you ever thought about launching an Indian product, premiering it there first, then launching it somewhere else?

We are learning from our experience in India. In the future, some products will share similarities with what can be done in India and then launched in other markets. Those products will be launched in India first and then launched in other countries.

Looking at our competitors and the market, we are thinking mid- to long-term for the India strategy. There are very few miracles in this market. With a brand getting 5% market share within two or three years, I didn’t see it. Our competitors and the big ones have been in India for many, many years.

When you look at the global OEMs, the market is very demanding, and we have to address it as such, very few are doing more than 5% market share. And usually they are having much better performances in other markets. So, the direction is, let’s consider India as a big market and develop features and technologies for the market. In the future we are thinking this will be a 5-million unit market, there are only so many 5-million-markets in the world, and we have to consider it as such.

 

How to do you view the Indian market from the Indian customers’ point of view and the competition you face from other competitors. Is the market tough, changing, demanding?

The India market is tough, definitely, because when you look at their aspirations, people look at good product quality, features, affordability—the market is very tight. Second, there is a tendency in the last few years toward an acceleration in new product launches. It seems the India market likes newer models at a higher pace, which is difficult for us and for all OEMs. Being able to launch a brand new model every three years is very challenging; for that, you need big volumes.This request of newness is a bit specific to India; we don’t see that everywhere. That’s why this market is challenging, we need to understand the requests, the characteristics, the specificities, and to address them.

This may be one of the reasons global OEMs are facing a certain limit because they are focusing in other markets first. I discussed with some dealers last week, for example, I was surprised by what was requested by many Indian customers is dual-tone. Dual-tone is very specific and this is not requested everywhere, but it is a request from the market, so let’s do dual-tone. Infotainment is also important, so let’s do a touch screen. So there are some features and some characteristics we need to understand, and do, because those things are important for our Indian customers. Style, too. We also have to make priorities.

Which segments do you identify as most important for Nissan in India? Based on that, how many products will Nissan introduce in the next three years? Nissan is innovative and strong in crossovers—will you be bringing one to India? With Datsun you created a category with the Datsun GO+- so you see creation of more segments in the Indian market?

We expect entry segment to continue to grow, and we will continue to invest in Datsun, not just for India, but also for other markets, e.g. South Africa. There are also other market opportunities in the Middle East. I think sub-4 meter segment is important for India.

You mentioned crossovers, that will continue too. Maybe less sedans, and more stylish cars is the way to go.

I don’t know if we will invent a new segment, but this is true for both Nissan and Renault as the Alliance level, and also Datsun, we want to focus on the value we bring to the customer. So with Nissan, with Datsun, the customer can get the maximum for the price. Not just in terms of features and performance, but also in terms of styling and image. At the end of the day, customers’ choices are made on these types of criteria.

I don’t know if we will invent a new segment in the coming years, three years is a very short period, but we want to bring innovation, new things, in existing segments that today we don’t see in the competition.

Regarding the number of models, I will not give you the answer.

There are two types of models: core models and opportunities, and we have to work on both. We need strong core models, which means a limited number of models, but that need to be very strong for the key segments, and for that we have to make some choices. We don’t have to cover 100%, but strong core models. Then after that we may have some opportunities, for the customers and for the brand image, and we are working on both.

Sub-4 meter is very hot. There is a segment which didn’t exist a few years back—compact sedan. Most global OEMs in India are jumping into that segment, e.g. Honda. Is Nissan planning to go in that direction?

About a compact sedan, we have to make some choices. Certainly, we are working on it, though no decision has been made yet.  We have to make some decisions. We decided to attack some key segments, the rest is still optional.

Redi-GO is expected to be there soon. Could it change the image of Datsun—it looks more premium product from the appearance.

You have more information than me about redi-GO [laughs]. When you look at redi-GO, of course Datsun is not a one-shot. When you develop a new brand you don’t stop at 2 models. Of course there will be new products in the Datsun brand and those products will evolve and bring newness, also in terms of style. Each brand has its own territory within Nissan/Datsun. We don’t want any misunderstanding or overlap between the two brands.

Some criticism has been made of Nissan service at dealers in terms of reach and the overall service quality that is provided for Nissan products. Any definite plans to make service improvements?

For the last 12 months there has been a lot of emphasis on customer satisfaction—service, perception of service when they buy their first car, overall satisfaction. It takes some time to get results.

The recent JD Power survey shows we have made progress in sales satisfaction. We went from the 9^th position to the 3rd position, proving we are in the right direction, but we need to continue to work on that. We are waiting for CSI and SSI results and rankings in October. We have a survey every month, ranking happens once a year.

Are we improving faster than the competition—we are awaiting the SSI results. It’s important that we continue to focus on customer satisfaction and this message is very well understood by our dealer network. Product lifecycle differs—new products, very successful products, less successful products—it’s the same case for everybody. But at least the constant should be the service. In India, maybe more than in other countries, the reputation of the brand is quite important, so if you want to build a very strong reputation for your brand, CS is key. So this is something we continue to work on—this is a constant effort.

 

Talking about safety of vehicles sold in India, some people in India feel we are shortchanged (neglected) when it comes to safety features in cars. Is there any reason why this is not considered?

There has never, ever been any question mark, or any doubt about our strong commitment to safety in Nissan cars. As regards Datsun, I believe you had the answer given yesterday and I would not be able to offer anything better that what Vincent Cobee said.

Do you think Nissan needs a “hero car” in India (e.g. GT-R)? And can Nismo play a part in that?

Yes, I think halo car is important as well; brand image and brand reputation is key. Brand image is a cocktail of different things. We mentioned CS, we mentioned the name of the company, technology, aspiration, all these can help improve our overall image. Even if we are not talking about big numbers in sales, this is a different objective. The objective is to improve the perception of what our customers in India will have from Nissan. Maybe our Indian customers don’t necessarily have the big picture about what Nissan really is.

Isn’t there just one halo model for Nissan—the GT-R? Is this what you are talking about?

I didn’t say there will be only one. You will have the answer to your question soon.

Can you comment on the massive job cuts [at RNAIPL]? How bad is the situation and will that affect production as well? Job cuts…

We have to be careful about how we look at this situation. We are talking about temporary jobs adjustment here, which is absolutely normal in our industry. Our industry is cyclic, and so we always have to adapt. That’s the reason why we have decided to reduce our production plan and adapt to the current production and our customer needs. This is very short-term, it’s absolutely normal and it is very tactical; we are reducing now, maybe in 3 or 4 months we will increase again. This is the game of our industry.

About Nismo – Fiat has got Abarth, VW has got GT in India. Do you think Nismo will make sense in India maybe from a brand perspective?

I cannot answer your question specifically at this point. Maybe you can tell me since you spent some time at Nismo this morning? Introducing Nismo to India is a not part of our short-term plan at the moment.

You have diesel engines in India, very efficient; also petrol engines. What’s your take on alternative fuels in India? CNG or no CNG?

I cannot answer your question so I will mention something ‘stupid’, as it’s not my area of expertise.  Most of the dealers I met last week said they wanted CNG.

Got any comments or feedback about the interview, or any thoughts on what Nissan’s strategy in India should be? Do share your thoughts with us via the comments section below, or through one of our social channels.