Click to play videoNew Delhi: It may be a small, but it’s a big idea. That is what Bajaj Auto MD Rajiv Bajaj says and the idea is now ready to take shape.
In a tripartite agreement, Bajaj- Renault-Nissan will build a $2,500 car or one lakh rupee car, codenamed ULC.
Interestingly $2,500 – as the company release says – is " the wholesale starting price range," which suggests the $2,500 figure is not sacrosanct and even if it stands, it will not be the retail price.
The small car will be Bajaj's maiden entry into the passenger car market.
Bajaj Auto, will own 50 per cent in the small car JV and Renault and Nissan will hold 25 per cent each.
The car will be made at a new plant to be constructed in Chakan and the initial planned capacity will be 4,00,000 units per year.
Sales will start in early 2011 in India and eventually be exported to other markets as well.
Interestingly, sources say the engine of the small car will be made only by Renault and Bajaj in a separate JV. The same engine will also be used in Bajaj's LCV and small trucks.
Since Nissan has already identified Ashok Leyland as its LCV partner, Nissan will not be involved in the same.
An announcement on the pricing, branding and investments et al is expected by July, but sources say the project cost would be about Rs 1,000 crores.
Positioned as an intra-city car, Bajaj's small car will attempt take on Tata Motors' peoples car in spirit or price or both.
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