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[김정훈 (Tristan)]

For Datsun Revival, Nissan Gambles on $3,000 Model

ATSUGI, Japan—It is the car that baby boomers may remember as much for its compact chic as for its slogan ("Datsun, We Are Driven!"). Now, a new version of this storied brand may get more attention for something else: its price tag. In a bold move into the auto industry's fastest-growing category—emerging-market countries—Nissan Motor Co. is planning a revival to this Beatles-era star that might surprise its fans. According to interviews with Nissan's CEO, Carlos Ghosn, and other company executives, the rebooted car will appear in these countries as bare-boned as any rival has tried. And Nissan is hoping to set new lows for pricing for a global auto maker, offering the cheapest Datsun model for about $3,000 to $5,000. The lowest price is nearly a third the price of its most inexpensive car, the $8,000 Tsuru compact sold in Mexico. In revealing new details to The Wall Street Journal about the tightly controlled project, Mr. Ghosn said the company was committed to offering six Datsun vehicles, due out beginning in 2014, at a price range lower than all but a handful of smaller car makers in China and India specializing in mini autos.

He portrayed the relaunch as much as a life's mission as a business strategy, with the goal of providing poorer populations a greater chance at car ownership. No major car company has yet figured out how to penetrate profitably the lowest price segment in emerging markets, even though these countries already make up nearly half of all global vehicle sales. But both the overall strategy and selection of Datsun to lead the cut-rate charge has already faced some opposition within the company and is likely to cause concern among some analysts and car buffs. In its heyday, Datsun was a much-beloved brand, an economy car that was nonetheless prized for classy designs and innovative touches. But to have a shot at keeping the price at $3,000 for the lowest-priced model—which even Nissan officials concede will be a hard to pull off—the company will have to jettison features that have long been standard in the U.S. but not in developing markets, from automatic transmissions to a full supply of air bags.

Inside the company, some executives are worried the campaign diverts scarce resources needed to bolster established products in established markets. Nissan hasn't disclosed any figures, but analysts estimate it can easily cost $1 billion to build a new car. And while doubters among industry analysts are few so far, the company's Japanese rivals aren't convinced sufficient demand exists for such vehicles in the developing world.  "It's a big mistake to think you can introduce a cheap car in emerging markets and be successful," said Yukitoshi Funo, the executive vice president at Toyota Motor Corp. in charge of developing markets, where the auto maker has bet heavily on subcompacts and pickup-truck derivatives in the $8,000-$10,000 range. "People want a car they and their families can be proud of." That Datsun is part of any Nissan power play, especially one this large, is an ironic twist for a company whose very decision to extinguish the car brand in the early 1980s was heaped in controversy. The nameplate was still popular at the time—it was the second-biggest selling foreign brand in the U.S. in 1981, with 580,000 cars sold—but Japan-based executives decided that year to stop using Datsun and replace it with Nissan to unify the corporate identity. The move, which caused widespread confusion among dealerships and buyers, contributed to Nissan's decline at the time and is still considered one of the worst marketing decisions in automotive history.

Now, the 58-year-old Mr. Ghosn, who came to Nissan 13 years ago to rescue it from the brink of bankruptcy, has decided to stake his reputation on this very brand. Born in Brazil and raised in Lebanon, he is the only head of a major car maker raised in the developing world, a fact that he says has deeply influenced the legacy he wants to leave at Nissan. He himself didn't own a car until he was 18, and in many underdeveloped countries, car ownership at any age remains more of a dream than a reality. In India, only 38 people out of 1,000 owned a car in 2010, compared with 808 people per 1,000 in the U.S., according to one study.

Of all brands, Mr. Ghosn is hoping that dusting off one of the industry's most recognized nameplates will generate excitement among buyers. Countering his competitors' criticisms, he promised to roll out a car that will be "modern and fresh," because buyers in emerging markets want an automobile "that makes them feel good and is in their budget." He describes the new Datsun as one of the company's main "accelerators of growth," a key weapon in a plan to lift global market share in units to 8% by 2016, up from 6%.

To do that, the car maker plans to boost sales in emerging economies, which it expects to account for 60% of all auto industry sales in five years, up from 43% today. Mr. Ghosn claims that with enough first-time buyers, Datsun could capture one-third to one-half of total car sales in these countries.

Ralf Kalmbach, an automotive consultant with Roland Berger in Munich, calls it’s an ambitious but necessary move for the industry's big players. Indeed, Volkswagen officials have recently confirmed the company is looking into options to enter the low-cost segment but that no decision has been made. "There is no way around this entry-level segment for global auto makers," said Mr. Kalmbach. "It's growing too fast."

But even some corporate insiders at Nissan say the company's goals won't be easy—at least in a way that makes a profit. Outside of specialty vehicles—like the minicars made by Japan's Suzuki Motor Corp. in India—other global auto makers have steered away from the very low end of emerging markets. It remains the preserve of sub-$5,000 cars with razor-thin profit margins such as the Chinese-made Chery QQ, Suzuki Motor's Indian-market Maruti 800 and Tata Motors' Nano. To compete, Nissan must develop a full line of brand new vehicles, which it says it can do by 2014 by using simplified designs and an existing inventory of parts, and streamlining its usual approval and testing processes.

What is more, in the quest to make a profit despite charging rock-bottom prices, Nissan officials say they will have to take a bare-bones approach to comfort and safety, tailoring to societies less coddled than developed markets. For example, the cars will only offer manual transmissions and their exhaust systems will be noisier and vibrate more, much as they did before the addition of silencers and stabilizers, according to people familiar with Nissan's plans. Datsun's team is also peeling back the now-typical multilayered approach to safety for markets that care less about it than the U.S. "If an accelerator pedal sticks, they tend to overlook it rather than obsess," says Datsun team senior adviser Tokuichiro Hosaka, referring to emerging-market buyers.

[Questions]

1. Are there any risk to the strategy of Mr. Ghosn?

2. If you are a person who live in third world, do you have an intention to purchase Datsun?

3. If you are a marketer, what are you going to do to pull this off in a developing country before starting the strategy?

Airlines Entertain Tablet Ideas

When French airline OpenSkies wanted to upgrade entertainment options on the small fleet of Boeing 757s it flies between Paris and New York, it decided against wiring its aircraft with a traditional seat-back video system. Instead, it bought nearly 500 Apple Inc. iPads and preloaded them with an array of video to hand out to passengers on board.

Rather than the up to $3 million per airplane that typical in-flight entertainment systems can cost to install, according to industry executives, the airline says it spent about $250,000 per plane for its iPad-based system, which the premium-class-only airline lends out free to all of its passengers.

"We found that in terms of costs, you actually get a very good product for less," said Karin Drylie, director of marketing and product for the OpenSkies, which is owned by International Consolidated Airlines Group SA's British Airways.

For Datsun Revival.doc

A growing number of air carriers are tapping into consumer technologies like tablets and wireless streaming to help them upgrade their in-flight service—without breaking the bank. A few, like OpenSkies and Qantas Airways Ltd., are distributing or renting tablet computers to passengers. Others, like Delta Air Lines Inc. are installing wireless video systems that stream movies and TV shows from onboard servers to customers' own portable devices for a price.

The result is a new market for in-flight entertainment, both for small airlines with older planes, and for short- or medium-haul planes that make up roughly three quarters of commercial airplanes. Those airlines and types of planes have often not offered much more to passengers than in-flight magazines and a handful of overhead screens. But new technologies—drawn from the world of consumer electronics— are changing the cost-benefit equation.

The new systems come in different flavors. In one, airlines preload content and specialized in-flight applications onto tablet computers that flight attendants then distribute in the cabins. Last week, for instance, El Al Israel Airlines Ltd. began handing out iPads to its business-class passengers, like OpenSkies.

Last December, AMR Corp.'s American Airlines began issuing Samsung Electronics Co.'s Galaxy Tabs for no charge in premium cabins on some flights, including on 767s that don't otherwise have individual screens. On the low-cost end, Asia-Pacific carrier Jetstar Group rents out iPads preloaded with content to passengers on some routes, too.

[Questions]

1. Have you ever thought about extraordinary services for passengers on board?

2. What is your worst experience in cabins.

3. Please share your opinion on handing out iPads to all passengers in flight. Is it either good or bad? And tell me about the reason.

Wal-Mart Says Time Is Right for Japan

Wal-Mart Stores Inc. is expanding in Japan for the first time since 2008, sensing an opening as increases in the ranks of the working poor and pensioners on fixed incomes propel a trend toward thrift there.

The retailer is planning 22 new stores in Japan in the next two years, as well as scouting for acquisitions to enlarge its 368-store presence in the world's second-largest consumer market, where it got off to a rocky start about 10 years ago. "I expect single-person households will continue to grow and people will have less money and all of that plays to our strengths," said Steve Dacus, president and chief executive of Seiyu and Walmart Japan Holdings.

Japan hasn't been an easy country for the Bentonville, Ark., retailer, which arrived a decade ago through a partnership with Seiyu Ltd., a national grocery chain that wasn't thriving. The market is highly fragmented, and finicky Japanese shoppers, who traditionally equated discounts with poor quality, were slow to embrace the retailer's modus operandi of low prices and broad merchandise selection.

Wal-Mart acquired Seiyu in full four years ago, and continues to use that name, rather than operate under the Wal-Mart banner. Its fortunes began turning several years ago as demographic and economic shifts began altering Japanese consumer spending habits. Wal-Mart's second-quarter sales at grocery stores and delis in Japan increased 2% from the year before, even as June sales at Japanese supermarkets overall fell 2.1% from the year before, according to the Japanese Ministry of the Economy, Trade and Industry. Japan last year accounted for $2.5% of Wal-Mart's $443 billion in revenue, according to consultancy Planet Retail.

The retailer has created special products to cater to the aging Japanese population; one of its most popular products is a "298-Yen Bento," a single-serve, freshly prepared meal that sells for about $4 and is tailored to "someone on a pension with limited funds," Mr. Dacus said.

The changes are winning over shoppers like Zengo Namioka, a 74-year-old pensioner, who shopped for bread and milk at a new Seiyu discount store 20 miles south of Tokyo on a recent afternoon.

Mr. Namioka said he and his wife spend carefully to make their limited money last every month, and that Seiyu's prices would help offset the impact of a new increase in Japan's consumption tax, which is rising from 5% to 10% by 2015.

"It's helpful the store is now nearby," he added, noting that the town's only grocery store closed three years ago as the area's birthrate declined and its population dwindled. Aging residents of the area had to climb hills to buy food in the nearest store.

Analysts say sales at Wal-Mart's operations in Japan lag behind those in other high-growth countries like Mexico and Canada. Its 2% sales growth there is far below the almost 10% growth at its international operations overall, said David Marcotte, an analyst for consultancy Kantar Retail. "Wal-Mart's strategy is to hang in there and wait for the market to shift to their position as other companies lose momentum or close."

Wal-Mart still faces considerable hurdles in Japan, a low-growth retail market where it still has only 2.6% of market share, according to consultancy Planet Retail. But the company says it is finding ways to sidestep problems that dogged its failed endeavors in Germany and South Korea, markets the retailer exited in 2006.

Instead of relying on Japan's traditional thicket of middlemen to supply products, which can raise product prices and slow deliveries, the company is using its global footprint to import food from other countries. Wal-Mart said grapes imported straight from California can be 20% cheaper than those sold by competitors.

The strategy has also allowed Wal-Mart to introduce new products into Japan that have caught on with consumers, such as Reese's Pieces peanut butter candies from Hershey Co. and private-label wine from Wal-Mart's Asda stores in the U.K.

[Questions]

1. How Wal-Mart Stores could settle in Japan against some barriers?

2. Why they failed to expand their market in Korea?

3. Do you think that Wal-Mart Stores will end up benefiting Japan’s economy in the end?

[김정훈 (Tristan)]

내용 좀 길어요~ 읽어오세용 ^^ 그래도 빨리 올림 ㅋㅋ

[고윤석[미르]]

와우. 수고 많이했어. ^^

[근아(Alice)]

오옷 수고하셨어옹 감사합니당^^

[김정훈 (Tristan)]

넹 ^^ 근아도 이번주엔 봤으면 좋겠다 ㅋ 수고 ~~