Japanese auto maker Nissan is yet to decide on its partnership with Bajaj Auto for sourcing of ultra- low cost car as it is reviewing priorities in the entry-level small car segment in India.
“We have not yet made a definitive decision on the partnership with Bajaj. However, we are aware of the difficulties faced in sales of competitor cars at the lower price points, where basic customer car needs may not be fully met,” Nissan Motor India Managing Director and CEO Takayuki Ishida said.
“We are therefore in a full review of priorities — segment by segment and market by market — in the price entry zones, and will make our final decision as part of our annual product plan usually closed in January,” Ishida added.
As per an agreement reached between Renault-Nissan and Bajaj Auto in 2009, the Indian automaker was supposed to design, develop and manufacture the product, which was intended as an ultra low cost car, while the alliance would sell it under their badging.
Bajaj Auto had unveiled the RE60, a mini-four wheeler meant for urban transportation to replace three-wheelers at the Auto Expo in New Delhi in January this year.
At the time of unveiling the RE60, Bajaj Auto Managing Director Rajiv Bajaj had said it would be up to Renault-Nissan whether to source it or not after seeing the product.
Bajaj had, however, refused to call the RE60 that is a powered by a 200 cc rear mounted petrol engine with a top speed of 70 kmph, as a car saying it was a commercial vehicle meant for passenger transportation.
In January 2008, Bajaj Auto had unveiled its concept passenger car with an expected price of $3,000. It had partnered with Renault-Nissan for the ultra low cost (ULC) car project. The ULC was first scheduled to hit the roads in India in 2011, but was delayed due to differences between the partners on pricing and design. While Renault-Nissan wanted to price the car at around $2,500, Bajaj insisted on lowering the overall cost of ownership.
In 2010, Renault-Nissan announced the signing of a memorandum of understanding with Bajaj Auto to take forward their ULC car project. Since then, Bajaj Auto had gone on to develop the RE60 but it remained uncertain if Renault-Nissan would source the product to sell in India and similar global markets and their partnership has not flourished. Ishida said the company is pursuing several “price entry” segments in India, Indonesia, China and Russia. “So far we have launched our first one, the ‘Dost’ and we are actively developing others as Nissan, and in partnership with Renault and Ashok Leyland,” Ishida said.