The Hindu Business Line : Renault-Bajaj small-car will cost lower than any other made in India

New Delhi, Nov. 10 Ending all speculation on the specifics of the ultra low-cost (ULC) small car and differences between the partners, Renault-Nissan announced on Tuesday that it has reached an agreement with Bajaj Auto clarifying the role to be performed by each company.

The small car is now slated to be launched in 2012 and will be manufactured by Bajaj.

“We now have a clear definition as to who does what. The new car will be competitive both in terms of cost and fuel efficiency. The solution that our teams have found will address both,” said Mr Carlos Ghosn, Chairman and CEO, Renault-Nissan.

He added that the new car will wear a Nissan-Renault badge. According to the agreement, the design, manufacture and sourcing of components would be the responsibility of Bajaj.

However, the finishing of the product and marketing would rest with Renault.

Mr Ghosn further added that the company is placing huge emphasis on fuel efficiency in order to keep the running costs low. “I can tell you that the car will give an average of much more than 20 km/litre,” he said.

He was speaking at an impromptu conference organised on the sidelines of the World Economic Forum’s India Economic Summit here on Tuesday.

On the expected price of the small car, Mr Ghosn said, “We would like it to be the entry price point for Renault and also the industry. We are practically sure that the cost of the car will be lower than any car made in India.”

At present, the cheapest car available on the Indian roads is the entry-level Tata Nano, priced around Rs 1.34 lakh. This is followed by the Maruti 800 at Rs 2.2 lakh.

Mr Ghosn further said that the company would look to export this car, especially to the emerging markets. “We have a good list as to where Bajaj is exporting its two-wheelers,” he said.

He said that Renault-Nissan plans to soon import other cars across the product portfolio in India, besides manufacturing new models at the Chennai plant. Nissan currently sells the Teana sedan and X-Trail sports-utility vehicle in India, both of which are brought in as completely built units.

The Renault-Nissan chief, on his India visit, met two Indian partners of the company — Ashok Leyland, with which it has an agreement for manufacturing commercial vehicles, and Bajaj Auto, to finalise plans on the new small car.

He, however, said that he could not meet Mr Anand Mahindra, Vice-Chairman and Managing Director, Mahindra & Mahindra. Renault has an alliance with Mahindra, under which it manufacturers and markets the Logan.

He added that he also met a few ministers for discussions on policy issues.

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