Bajaj and Renault-Nissan Tie-up For Small Car

Renault-Nissan and Bajaj have formally agreed to produce a small car together in India. The joint venture was announced today. The car currently is named the “ULC” or Ultra Low cost Car. Bajaj have earlier showcased the Lite small car at this year's Auto Expo.

The car will be produced in India at Chakan near Pune and will hit the market in early 2011. It was earlier said that the car will cost around $3000, but the latest release says that the car will cost around $2500. That’s exactly what the Tata Nano will cost when launched in October this year.

The joint venture will be 50% owned by Bajaj and 25% each by Renault and Nissan. Bajaj will invest around Rs.1000 crore into the project. The production capacity of the upcoming plant will be 400,000 units annually, and will cater to the Indian market before being exported to other countries.

The likely launch date of early 2011 gives Renault-Nissan and Bajaj enough time to develop the car as well as to gauge the market response to the Tata Nano.

Other manufacturers who have evinced interest in a similar car are VW, Toyota, Hyundai and GM.