Bajaj Auto will lead the three-way exclusive global alliance with Renault-Nissan for the $3,000 small car project. Sources said the current agreement is that Bajaj will lead the project and Renault-Nissan will support it.
Bajaj will be involved not just in the development and manufacturing of the car but also in its marketing and distribution, using its existing network of two-wheeler dealers. However, the alliance with Bajaj will only focus on light vehicles, both passenger and cargo. Which means, Nissan may be looking for another Indian partner to market and distribute its high-end range of cars.
Renault-Nissan boss Carlos Ghosn, who is all set to come to India next week to formally announce Nissan’s commercial vehicle partnership with Ashok Leyland, will be meeting the Bajaj brass on October 29 and will also be visiting its Chakan plant.
Mr Ghosn, who will arrive with a Japanese media contingent, will be showcasing Bajaj’s technical capabilities during the visit. Sources said Bajaj will seek support from both Nissan and Renault on the development of the $3,000 car.
“That support may be more in some cases like the chassis and body design and less like engine and transmission,” said an industry source. Currently, a feasibility study is on and a formal decision will be taken in the next two months.
Nissan Renault seems to be following a product/project-specific partnership approach in India. While Renault tied up with Mahindra & Mahindra for the Logan sedan, Nissan has tied up with Ashok Leyland for commercial vehicles. Sources said the Nissan-ALL tie-up predates the talks with Bajaj Auto.
Renault-Nissan’s alliance with Bajaj also covers light commercial vehicles, an area that Nissan’s Ashok Leyland alliance includes. Sources, however, said with the Ace segment in commercial vehicles clocking booming growth, competing products from Nissan-ALL and Nissan-Renault-Bajaj may hit the market alongside products from Mahindra & Mahindra, Piaggio and others.
Sources said the feasibility study would look at areas such as badging, marketing and distribution rights, branding, royalty and other such details.
Just a day after unveiling a $70,000 super car, Nissan Motor CEO Carlos Ghosn described plans for a $3,000 car that could be sold worldwide.
The cheap car would be built in collaboration with Bajaj, a motorcycle maker in India that’s working with Nissan and French car company Renault. Ghosn is CEO of both Nissan and Renault, which own stakes in each other and work together on some projects.
“I can’t get a $3,000 car out of Japan or France, so you have to go into a country where a $3,000 car is considered an expensive car,” Ghosn said in a wide-ranging session with reporters at the Tokyo Motor Show. It opens to the public Saturday.
The Nissan-Renault-Bajaj venture was spurred by an announcement earlier this year that Tata, a large Indian company, is planning a $3,000 car for Indian markets.
“If they can do it, why can’t we?” Ghosn said.
For low-price markets, the car would be bare-bones, lacking many of the features considered necessary in mature auto markets such as the U.S.
“Even if you have to reinforce the car” to meet U.S. crash-safety regulations and add features, “you’re starting with a $3,000 car,” Ghosn said. That low price leaves headroom to push up the cost, and thus the price, and still undercut the cheapest cars sold in many other markets, he said.
“What’s the cheapest car sold in America — $10,000? Between 3 and 10 is a large difference,” he said.
If the Nissan-Renault-Bajaj consortium decides to develop a $3,000 car, it will take time to accumulate “enough data to say whether a $3,000 car can be sold” outside India, Ghosn said. “But at some point we will have the data” and could decide if such a low-cost platform could be modified as needed to sell in other countries.
Ghosn gave no details about such a car, other than, “It would have only the things you absolutely need.” Nor is it clear how soon such a vehicle could be developed because the Nissan-Renault-Bajaj venture still is investigating the idea.
Ever since it began to seem inevitable a few years ago that cheap cars from China could be sold in the U.S., Ghosn has said that doesn’t necessarily mean only the Chinese would sell them. “I have the same advantages” because of partnerships with companies in both China and India, where wages are low and designers and engineers are used to doing things on limited budgets.
“If I can’t take the same advantages and produce a car for the U.S. as inexpensively as they can, shame on me,” he has said.
The India-car idea skips China for a country where costs are even lower.
source :economicstime and usatoday news
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