Bajaj-Renault-Nissan plan may be hit ULC project

The Singur pullout may affect the fate of the Bajaj-Renault-Nissan ultra low-cost car project as well.

According to sources in the vendor circuit, a number of Nano suppliers, who are also common to the Bajaj project, are now “nervous” because of the tight financial conditions and the Singur decision. “Obviously they are affected and waiting for some clarification from the Tatas before they make definite commitments in terms of further investments,” said a top industry source.

Sources say that that’s primarily the reason why the investments for the ultra low-cost car (ULC) project have not been finalised as yet. “A lot of the Nano suppliers were already two and three-wheeler vendors and so known to Bajaj Auto,” said a senior vendor source. As a result they were also picked for the ULC project. However, the financial turbulence and tight liquidity position, along with the sluggishness in the auto market, seriously restricted their financial elbow room. “And the Singur pullout didn’t help either,” said the vendor source.

Sources say the Bajaj-Renault-Nissan team will likely sit with their vendors shortly to check out just how much their willing to invest in the ULC project given their current confidence and liquidity levels.. “Vendors will negotiate for some financial backing from Bajaj Auto which in turn will determine the ULC project cost,” said the source.

Sources also said that since the ULC’s targeted debut date is early 2011, the feeling is that there’s still time to finalise financial details. The Nano’s performance and the volumes notched up by it will also be taken as feedback to determine finer details of the ULC project.

Although a sub-$3000 car like the Nano, the ULC, say sources, will strive to be totally different and Bajaj officials have maintained that it will offer higher mileage and may not be priced similarly either.

However, like the Nano, the ULC platform too will build in all possible fuel options including gasoline, diesel, hybrid and electric. The ULC greenfield plant is coming up at Chakan near Pune.

Source:indiatimes

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