Bajaj Auto Ltd intends to go ahead with its proposal to produce commercial vehicles but only after tweaking the originally-proposed product to bring it more in line with the market needs, according to Mr Madhur Bajaj, Vice-Chairman, Bajaj Auto Ltd.

Mr Bajaj had said in April that the company may not get into commercial vehicles and that it was flexible enough in its outlook to give up a proposal if that did not make sense.

However, speaking to Business Line on the sidelines of the inauguration of some facilities at the Great Lakes Institute of Management here, Mr Bajaj said that the company has now decided to go ahead with the proposal.

He said that the current thinking in the company is to produce a “one-tonne” truck. (Earlier, other senior officials of the company, like Mr R.C. Maheshwari, CEO, Commercial Vehicles, had said that Bajaj Auto would produce a 3.5-tonne vehicle.)

Mr Madhur Bajaj said the details regarding the location and investments were being finalised. However, he hinted that the company may not put up the commercial vehicles plant at Chakan (as was initially planned).

He added the product could come out about a year from now.
Drought to hit sales

Both Mr Madhur Bajaj, as well as Mr Rahul Bajaj, Chairman of the Bajaj group, said the drought would hurt sales. Mr Rahul Bajaj, who was also present at the Great Lakes Institute of Management, noted that around 60 per cent of Bajaj Auto’s sales came from rural India.

Mr Madhur Bajaj said that the Government could chip in and help by doing the environmentally-right thing of mandating the scrapping of vintage three-wheelers in cities.

This, he said, would help clean up the air, save fuel because these vehicles are guzzlers and also help sales of companies that produce three-wheelers.
Financial services

Mr Rahul Bajaj told Business Line that the group intends to form a company, to be called Bajaj Financial Services Ltd, for distribution of third party financial products.

He said that the group would also get into the mutual funds business, in collaboration with Allianz of Germany, the group’s partner in the insurance business.

An application for setting up the asset management company is pending with the Securities and Exchange Board of India, Mr Bajaj said.

Bajaj Auto is yet to freeze plans on its proposed ultra low-cost car that the company plans to build in partnership with French auto
major Renault and Japan’s Nissan.

The Pune-headquartered two-wheeler major, for whom this would be the first swipe at the car industry, will consider a techno-economic feasibility report for the proposed budget-price passenger car along with the other two partners before deciding the future course of action on the project.

“The techno-economic feasibility for the passenger 4-wheeler will be evaluated by Bajaj-Renault-Nissan for a final decision, leading to firming up of the co-operation parameters among partners and a suitable JV agreement,” according to the company.

Bajaj managing director Rajiv Bajaj did not elaborate further on the project even as some senior company officials said work on it was on and something can be expected over the next few months. While the proposed car is being seen as a close rival to Tata’s Nano, with Renault boss Carlos Ghosn speaking of a targeted price point around $2500. Rajiv Bajaj has all along maintained that the car’s unique selling proposition will not be its price, but its extremely-high fuel efficiency. It is understood that the car’s design, originally done by Renault, has not been found to be adequate, prompting the companies to go for a redesign.

“We are going back to the drawing board to have a rethink on the design,” an official from Bajaj’s foreign partners said, without wanting to be named. The official said the companies were firming up the various specifications for the car as they go about giving a new shape to it.

Another problem area for the project can be the global slowdown. The difficult times even forced Renault to go slow on its own independent car manufacturing plans in India as it decided to defer investment at Chennai where it is building a car plant along with group company Nissan. Thus, there could be reluctance from the company’s side in making big investments on any new project, the analysts sa

Source :Indiatimes.com

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

MUMBAI: Paris-based auto major Renault has chosen India to provide a larger role in designing its ultra low-cost car that it is developing with two-wheeler major Bajaj Auto, as a growing interest in economical cars in emerging markets drives the plans of most auto majors.

This is a marked departure from Renault’s previous plans when such assignments were evenly spread across the company’s other centres globally.

Till now, if Renault had to develop any new product all the design centres across the world would work at it and Paris would take a final call. Since it’s the first time that Renault is developing an ultra low-cost car in India, it has decided that Mumbai’s design centre will provide the main design framework, with other design centres across the world providing smaller inputs for the ULC. The Nissan design team is also understood to be providing inputs on designing the small car.

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The Bajaj-Renault-Nissan alliance could extend beyond the ‘ultra low-cost car’ (ULC) to include a range of electric vehicles.

Nissan-Renault boss Carlos Ghosn recently announced that he plans to start mass production of electric vehicles as part of his strategy to boost demand, which is now sluggish due to high fuel prices.

According to sources in the vendor circuit, Nissan-Renault may look at its ULC alliance with Bajaj for affordable production of e-vehicles. When contacted, Bajaj Auto MD Rajiv Bajaj refused to comment.

If the Bajaj-Renault-Nissan alliance does get into e-vehicles, it will be one more segment, apart from the Nano, where the combine will have a face-off with the Tatas.
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NEW DELHI: Two-wheeler major Bajaj Auto, which plans to develop a low-cost small car in partnership with Renault-Nissan, is expected to announce the final details of the project in a “few weeks”.

The small car project, which has been widely seen as an effort to rival Tata’s Rs one lakh Nano, was earlier pursued by only Bajaj Auto Ltd (BAL) and Renault and later joined by Nissan, in which the French firm has 44.4% stake. Asked by when a final decision on the project details was expected, BAL managing director Rajiv Bajaj said: “In a few weeks”.
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It’s the biggest auto show ever showcased in India. But the Ninth Auto Expo 2008, scheduled to open to the public on January 10 at New Delhi’s Pragati Maidan, is really two shows, not one.

Show One – the show – is the launch of the much ballyhooed Rs 1 lakh Tata small car on Thursday. Everyone, from the public to competitors, is waiting with bated breath for the curtains to go up on that car.

Which is why the rest of the crowd is planning Show Zero – the show before the show – well before the Expo formally opens. To avoid being overshadowed by the Tata car, automobile manufacturers are scheduling their announcements for January 8-9.

 all begins with Bajaj Auto’s small car on Tuesday, followed by General Motors, Volkswagen, Fiat (Tata’s joint venture partner), Maruti, Volvo Cars and the rest.To be unveiled by Rajiv Bajaj, managing director of Bajaj Auto, this small car has been planned as a joint venture with Renault and Nissan. If everything goes according to plan, the car will hit the roads in 2010.

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Vehicle manufacturers Bajaj Auto of India and Renault-Nissan are likely to take a final decision on jointly developing a low-cost car by the end of January 2008, reported The Economic Times.

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Mumbai: Bajaj Auto is quietly finalising plans to have its concept car on display at the Delhi Auto Expo from January 10 to 17.

Top sources told DNA Money that this vehicle could see further technological developments, once the three-way joint venture between Bajaj, Renault and Nissan gets under way.

“There may not be any major changes in design and what will be shown at the Expo will be more or less the final product,” they added.

The car, with a price tag of $3000 (Rs 1.2 lakh), is scheduled to debut in 2010.

There is absolutely no indication of what the concept looks like, though speculation is rife that it has a ‘tall boy’ image on the lines of Hyundai Santro.

Of course, the biggest draw will be the Tatas’ Rs 1 lakh car, which is due to hit the market by the second half of 2008-09.

It is believed to resemble the Mercedes Smart, and sources say that, in terms of styling and design, it will be a complete winner.

The car was initially planned only with a 624cc (rear) petrol engine but an 800cc diesel has since been included.

There will be both gearless and manual transmission options and it only remains to be seen if the company can keep the price pegged at Rs 1 lakh (ex-showroom).

Sources say that this is possible for the basic petrol version, which will be devoid of air-conditioning and will be a no-frills car.

Tata Motors is likely to have a mid-and top-end version for the petrol and diesel options.

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.

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