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Renault, Nissan, Bajaj to build low-cost cars
Published in The Saudi Gazette on 13 - 05 - 2008

Nissan and India's Bajaj Auto said on Monday they would form a joint venture to develop a low-cost car, joining a growing list of carmakers eager to tap emerging markets and as soaring oil prices drive a move to fuel-efficient “green” cars.
The venture, which will be 50 percent owned by Bajaj Auto, and 25 percent each by Renault and Nissan, will make cars with a wholesale price range starting from $2,500, they said, putting it squarely in the same range as Tata Motors' Nano.
With a planned initial capacity of 400,000 units a year, sales will start in early 2011 in India, with potential in other emerging markets around the world, they said in a statement.
“The project is on line to meet targeted performance and cost,” it said, without specifying details.
Nissan and Renault have had a big success with the no-frills Logan sedan worldwide, but for Bajaj, the second-biggest motorcycle maker and top three-wheeler maker, this is a first. Bajaj also plans to foray into commercial vehicles.
Nano, which was unveiled to a rousing reception in January, is expected to be on the market in September or October, at a dealer price of 100,000 rupees ($2,400), or about half the cost of the cheapest car now.
General Motors and Hyundai have expressed interest in a rival car, while others including Toyota Motor, Volkswagen and Ford are also keen.
The Nano is expected to shift motorbike users faster and eat into the share of leaders Maruti Suzuki and Hyundai.
“Tata has a headstart in this segment, but the numbers are going to be huge,” said Arvind Saxena, senior vice president of research firm TNS Automotive.
Chairman Ratan Tata has said he expects 1 million units in sales in India for Nano eventually, with exports coming later.
“It will bring a lot of first-time car buyers into the market and encourage them to buy earlier, so it has the potential to change the market dynamics,” Saxena said.
Car sales in India, forecast to nearly double to 2 million units by 2010, has grown at an annual rate of about 15 percent in the last five years, helped by higher incomes and new launches.
More than two-thirds of the market is for small cars, defined as up to 4 meters in length and with an engine displacement of 1.2 liters for gasoline and 1.5 liters for diesel.
The government aims to make India a small car production hub, and in February cut the excise tax on small cars to 12 percent from 16 percent.


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