By Santanu Choudhury 

NEW DELHI-- Nissan Motor Co. relaunched its Datsun cars with great fanfare last March in India, as the auto maker took its first step in an effort to boost sales in developing markets and create its third brand.

Instead, Datsun sales in India and other targeted countries have been well below expectations, a reminder of the challenges of cracking highly competitive, low-cost car markets in developing countries.

In India the Japanese car maker has struggled to build a Datsun dealership network to reach the country's rural backwaters, where inexpensive cars are most popular. Meanwhile, consumers in India's larger cities haven't shown much interest in buying what is seen as a stripped-down version of a Nissan, often sold at Nissan dealerships.

After the March India launch, Nissan started selling the Datsun Go+ minivan in Indonesia in May, a sedan in Russia in September and a hatchback in South Africa last October.

In Indonesia, Nissan sold roughly 2,500 Datsuns a month in the second half of last year, below the company's target of more than 4,000 a month, said Hana Maharani, spokeswoman for PT Nissan Indonesia.

In India and Indonesia, Datsun lacks the brand recognition or the extensive sales and service network needed to peddle the cars to the masses, industry analysts said. Its effort to create dedicated Datsun showrooms in India got off to a slow start, with about 15 now open; the rest are combined with Nissan showrooms.

Datsun sales in Russia have collided with the country's worsening economic turmoil because of falling oil prices and sanctions over its support for insurgents in Ukraine. Total Datsun sales there and in its newest market, South Africa, are about 13,000 vehicles combined, according to company executives.

In India, "what went wrong is [us] being overoptimistic," said Guillaume Sicard, who became president of Nissan's operations in India in October. "I think we have to be reasonable: We need time to establish the brand."

Nissan is a relative latecomer to emerging markets, and it isn't alone in struggling to win broad acceptance. Other large auto makers, including Ford Motor Co., General Motors Co. and Fiat SpA have entered India and failed to excite India's budget-conscious consumers or reach many car buyers outside of its big cities.

Nissan pinned its hopes on the Datsun brand, which was first rolled out in the 1930s and was the name used for Nissan's export models. Even though it had built a reputation as a reliable and affordable car, Nissan retired the Datsun brand in the 1980s and changed all its exports to Nissan. Chief Executive Carlos Ghosn announced Datsun's rebirth in 2012 as part of the company's strategy to reduce its dependence on mature markets such as North America. In 2013 Mr. Ghosn said Datsun would help Nissan capture a 10% market share in India by the end of March 2016, versus less than 2% now.

Nissan had been hoping to use Datsun to leapfrog competitors. It recast the brand as a peppy, small car that developing-market consumers could afford. With a price tag of about $5,300 in India, the Datsun Go is 25% less expensive than the price of the least-costly Nissan.

The least expensive Toyota Motor Corp. and Honda Motor Co. models are about $8,000 and $7,000, respectively.

During the first 10 months, however, Nissan has sold fewer than 1,500 Datsun Go cars a month in India, far fewer than the 5,000 a month some analysts had expected and less than half of the sales logged during the first few months of Hyundai Motor Co.'s Eon, for instance.

India's best-selling Maruti Suzuki Alto hatchback sold about 22,000 vehicles a month last year.

Nissan introduced the Micra hatchback--its first car in India--in July 2010, and accounted for less than 2% of the two million vehicles sold in the country last year. In comparison, Maruti, a unit of Japan's Suzuki Motor Corp., which has a 45% market share, began selling its first car model in 1983. Hyundai, which has a 16% share, introduced its first car in India in 1998.

"Nissan as a brand itself is not well-established in India and then they decided to bring another brand," said V.G. Ramakrishnan, managing director for South Asia and global co-leader for automotive practice at market-research and consulting company Frost & Sullivan.

Pranjal Bhattacharya, a tobacco-company executive in Kolkata, had never heard of Datsun before March. When he looked into Datsun Go, he said it looked too basic for its price.

"The car doesn't have features like a CD player and its front seats are connected, which didn't look nice to me," said Mr. Bhattacharya, who chose instead a Maruti Suzuki hatchback.

Company executives and analysts also attribute the sluggish sales of Datsun cars in India to the limited number of sales and service outlets. Nissan has about 160 dealerships in India, while Maruti Suzuki has more than 1,500.

"One of the obvious limitations has been the inadequate sales footprint for this new brand, but I'm also not sure if the company was successful in communicating how the car is different from the competition," said Anil Sharma, a senior analyst at IHS Automotive.

To jump-start sales in India, Datsun is trying to double its distribution network by 2016 and launch more new models and advertising campaigns to create buzz. The company declined to say what it plans to spend on the expansion.

Nissan expects Datsun sales to pick up as it expands its dealer network and starts selling new models. It launched its second Datsun in India on Jan. 16: a $6,000 minivan called the Go+.

"I am fairly confident that things will further improve," said Arun Malhotra, the managing director of Nissan's Indian operations. "It has not even been [10] months since the launch of the brand."

Eric Bellman and I-Made Sentana contributed to this article.

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