The proposed joint venture among Renault-Nissan-Bajaj for the low cost car ($2500) is likely to share the common parts as of bike and three-wheelers of Bajaj. In a bid to compete with Nano, the project is highly slid to Rs200-Rs300 crore from the original Rs1500 crore. The earlier project was mooted by these companies to roll down 400000 ultra low cost cars a year at an investment of Rs1500 crore. As the the fortune flown in the disguise of delay, now the project is to be reduced at least by 20% of this investment, as Bajaj is all set to share common products and facilities, said the MD of Bajaj.
Under the MoU among these companies, Bajaj is to stake its claim of 50% while the rest will be shared equally by Nissan and Renault, tentatively. This means Bajaj will have a big hand in terms of components, the majority of which be indigenous, to reduce the cost of the car. The project, started as early as 2007, faced lot of commotions and complications over the design, positioning and other technical aspects. The current proposals have been given nod by the CEO of Renault-Nissan and the product details are to be made public soon. To meet these benefit, Bajaj has to sacrifice its brand name for the car, as the badge will bear Renault-Nissan’s name.
However, Rajiv Bajaj has different allusions to the agreement as quoted by his father that the company has got its own freedom to do business in this JV. Bajaj is all set to launch commercial cars in its own brand if not now, at least in future. Keeping this small car project on parallel, Bajaj is likely to roll down a truck or a four-wheeler much before the launch of this small car, at least by 2012. To face the competition from Nano, the new small car will be designed with the efficiency to run 20km/lit which may be increased to even 30km.lit. The owners of two wheelers are not immediate target, as they have to shell out Rs9000-Rs10000 per month compared to Rs2500 for bikes.