Bajaj, Renault and Nissan idea of building a Nano rival is finally taking shape. Bajaj Auto and the Renault-Nissan alliance today announced that they will form a joint-venture company to develop, produce and market the car, code-named ULC (ultra-low cost)with wholesale price ranging from Rs1 lakh.Bajaj Auto will own 50% in the small car JV and Renault and Nissan will hold 25% each. Codenamed ULC, 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. The project cost would be about Rs 1,000 crore. Sales will start in early 2011 in India and eventually be exported to other markets as well. Bajaj will be the lead player in India and Srilanka. But Renault-Nissan are likely to hold the IPR for the car’s technical design and mechanicals. Another interesting thing is the engine of the small car will be made only by Renault and Bajaj through a separate JV. Since the same engine will also be used in Bajaj’s LCV and small trucks. Nissan has already tied up with Ashok Leyland for its Indian LCV partner and hence Nissan will not be involved in the small car engine.
The good news, Bajaj has heeded to voice of Carlos Ghoshn. Bajaj retracted from producing a smart car with higher fuel efficiency. Unlike the earlier announced, the car will be ultra low cost and will be priced around Rs 1lakh. “Tremendous technical support is coming in from the partners and a lot of interesting work is underway. Suppliers will be selected by us as part of the joint venture and we are confident of meeting Carlos Ghosn’s expectations of frugal engineering,” Bajaj said.