THE Renault-Nissan French and Japanese auto alliance said yesterday that it is forming a joint venture with Bajaj Auto Ltd of India to develop, make and sell an inexpensive car there with a price starting at US$2,500.
Many car makers are trying to woo India's burgeoning middle class with models priced around that level.
Nissan, which has been eager to move ahead with plans for a cheap car offering in India, said the car, code-named ULC, will be made at a new plant in Chakan in India, with annual production capacity of 400,000 vehicles.
Sales are scheduled to start in early 2011 in India, Nissan said. The joint venture will be 50 percent owned by Bajaj, 25 percent by Renault SA and 25 percent by Nissan Motor Co.
The Nano car from Tata Motors Ltd of India is expected to roll off assembly lines later this year and is expected to sell for 100,000 rupees (US$2,400). Others, including General Motors Corp of the US and Toyota Motor Corp, are also working on cheap cars targeting India and other emerging markets.
It is uncertain whether such major auto makers will be able to hold prices down at the level of Tata's Nano, which in its basic version has no radio, passenger-side mirror, central locking, power steering or air conditioning. It also has only one windshield wiper.
The emergence of the Nano has also fueled a host of concerns, including that more drivers on the roads will cause greater pollution and increase the demand for fuel. As well, the recent rise in material costs such as steel is introducing new challenges for Tata.