Bajaj bets big on small car project

Bajaj Auto is all upbeat about its small car project and has said that the four-wheeler plans will be on stream as scheduled even if the joint venture between the company and the Renault – Nissan combine fails to take off.

It is a known fact that the proposed three-way joint venture between Bajaj Auto, Renault SA and Nissan remains at a memorandum of understanding stage. No formal deal has been inked. This doesn’t mean that the car project is off, said the company.

Bajaj is said to be lining up the project as a means of exploring the joint development of a low-cost car. It might even go ahead and take it to the levels of a light commercial vehicle (LCV) platform. The engine for both the low-cost car as well as the LCV is expected to be common, industry observers said. The MoU indicates that Bajaj would provide the manufacturing and marketing muscle to the ultra low-cost (ULC) car while the Renault-Nissan combine claims to have already frozen the car’s design. The three companies, meanwhile, will work as a team to produce the engine, transmission and gearbox of the proposed small car.

The concept of the Bajaj small car was unveiled early this year just a couple of days before Tata Motors unveiled its Nano. Bajaj Auto plans to bring out its small car within four years but it will not be for Rs 1 lakh. As per the MoU, which was signed some months back, Bajaj is expected to hold majority stake in the proposed JV while Renault and Nissan would hold 25 per cent each.

The latest Bajaj stance has come at a time when the Renault-Nissan combine had already decided to focus more on the ultra low-cost car project. This ahs been done after setting aside the JV plans for the LCV space. Bajaj had already begun work on a four-wheeler LCV product to build vehcles that would compete with Tata Ace and Mahindra Geep Maxi Truck .