The decision to withdraw Datsun from Russia reverses the ambitious global growth plans for the brand envisaged by Nissan's former Chairman Carlos Ghosn.
Reviving the Datsun name, previously used by Nissan for export markets until 1981, was a key strategy of Ghosn, who wanted to expand in emerging markets by using older alliance technology to create affordable cars for the new middle classes who might otherwise have bought second-hand models.
Speaking at the 2014 launch of Datsun in Russia, Ghosn dismissed fears that the brand would struggle as Russia was entering another of its cyclical downturns.
"I'm bullish on the market, I recognize the fact the market declined last year and will probably decline this year, but when we invest, we engage not for this year but five, 10, 20 years down the road," he said.
Nissan began production of Datsuns for Russia in 2014 in AvtoVAZ's plant in Togliatti that builds Ladas. AvtoVAZ is part of the Renault-Nissan alliance.
Datsun's on-Do small sedan and related mi-Do hatchback shared technology with Lada and sold for as little as 329,000 rubles (then $9,500) at launch.
Small market share
Datsun's Russian sales never matched Ghosn's ambitions. The brand's market share in Russia was just 1.3 percent last year on unit sales of 22,426, according to the Moscow based Association of European Businesses.
Datsun sales in Russia fell 27 percent to 5,048 in the first four months in a total market down 19 percent.
Nissan CEO Makoto Uchida said on Thursday that Datsun would be withdrawn from Russia by the end of the 2023 financial year as part of a plan to discontinue older cars and trucks as well as models "unique to a specific region."
As part Nissan's new midterm plan, the automaker will trim the number of its nameplates by 20 percent to shrink the global lineup to under 55 models from 69.
Nissan is withdrawing Datsun from Indonesia, where it will shut its factory in Purwakarta, West Java.
Nissan would not confirm reports that it has decided to ax the Datsun brand entirely.
It said Datsun will be kept in India and South Africa for the time being.
Datsun struggled in some markets where Nissan found it was cannibalizing its own brand.
"We ended up pushing two mainstream brands in a market [Indonesia] where you have a one or two percent market share. You cannot do that," a source told Reuters last year.
The source said there had been similar problems in India, South Africa and Russia.