Nissan ups bet on compact SUVs with Terrano

The Japanese carmaker, which aims to achieve a market share of 10% by 2016, up from 1.8% last fiscal, sees a volume-driver in Terrano.

DNA/Yuga Chaudhari

Mumbai: Nissan Motor India has become the latest automaker this year to bet on compact sports utility vehicles (SUVs), the only segment of passenger vehicles where demand has been undented in the ongoing slowdown.

Terrano, the new kid in town, will be priced below Rs10 lakh and officially launched in October, the company said at its formal unveiling on Tuesday. Pre-bookings will start in September.

Nissan is banking on the growing demand for compact SUVs, even though the overall utility vehicle (UV) segment has started to decline. Between April and July this fiscal, UV volumes declined 1.03% in the domestic market, as per Society of Indian Automobile Manufacturers data.

The Japanese carmaker, which aims to achieve a market share of 10% by 2016, up from 1.8% last fiscal, sees a volume-driver in Terrano.

“Volume-wise, I expect Terrano will help us grow as a major SUV player in the market. This will be an aspirational model for SUV customers and a premium SUV in the segment,” said Kenichiro Yomura, president of Nissan India operations.

Terrano will take on Ford’s EcoSport and Renault’s Duster, besides Mahindra’s Quanto and Premier’s Rio.

Interestingly, Terrano is based on the Duster platform of Renault, Nissan’s alliance partner.

According to Yomura, Terrano will be priced higher than Duster, in order to ensure it does not directly compete with the vehicle.

“There is competition everywhere, even in SUVs and sedan. So we have intentionally made Terrano premium. We are targeting the premium side of the compact SUV segment, we don’t see too many competitors.”

While the experts feel that Duster, currently the highest-selling SUVs, may face some pressure on volumes post the launch of Terrano. “Some cannibalisation is bound to happen. Renault may lose some 1,000 units with the launch of Terrano, while the combined volumes for Duster and Terrano can go up to 6,000-7,000 units a month,” said Puneet Gupta, associate director, IHS Automotive.

Following the success of EcoSport and Duster, the industry is expected to see a lot more action as most of the manufacturers are looking at leveraging the growth in this space. Ford’s EcoSport, which was launched at competitive pricing recently, received 30,000 bookings within 17 days of its launch.

Industry players feel the new launches will drive volumes for the segment.

“New entries will add to the volumes. I see the new launches working towards increasing the pie rather than eating the market shares,” said Sumit Sawhney, executive director, marketing and sales, Renault India.

Despite new launches, however, Renault expects to double Duster sales this calender year from 23,000 units in the last.

Overall passenger vehicle sales, however, are expected to continue to be under pressure.