'Low-cost car project with Bajaj on, as before'

Seeking to dampen the recent reports of trouble between the Nissan-Renault Alliance and Bajaj Auto on their project to develop a low-cost car for the Indian market, Simon Sproule, Director, Communications, for the former told Business Standard that since last November, there had in fact been “no new announcements”.

“We watch the headlines in India and every month we see something being announced as ‘new’. In fact, there is really no new news since the partnership was announced last November,” he said.

Sproule said the two parties were now in the “working phase of the project”, but were yet to decide what the vehicle “would look like, where it will be built, what would power it or where it will be sold”. Confirming that it was always intended as a partnership based around an OEM (original equipment manufacturer) exchange rather than a joint venture, the Renault-Nissan Alliance spokesperson said the vehicle was on track to be in the market by 2012 and at a price point of around $2,500 (Rs 1.17 lakh), which was standard for the entry level market in India.

While Bajaj will be responsible for developing and manufacturing the car, Renault-Nissan will brand, market and sell it for both the Indian and overseas markets. “We have expertise in certain sectors of the market and other manufacturers have better expertise in others. Which is why we are working with Bajaj at the entry level, low cost market, given their experience in making motorbikes, scooters and three-wheelers at a very competitive price.” Sproule insisted that from the outset the project was based on the idea that Bajaj’s technology, manufacturing capabilities and supply base would fuse with the Renault-Nissan Alliance’s expertise in selling four-wheel vehicles, making it a very “logical partnership”.

He said the Alliance believed the entry-level market in India would fragment, opening opportunities for manufacturers to bring in new types of vehicles at the price point currently dominated by the Nano. Denying that the car-in-progress was intended as a direct competitor to the Nano he said, “It is more focused on a price point than a specific vehicle configuration at the moment”.

On rumours that Renault-Nissan may enter into a further partnership with Ashok Leyland for the manufacture of another small car, Sproule maintained that while the future remained unknown, for the moment the Alliance was working with Ashok Leyland on commercial vehicles only.