Bajaj Auto unveils ultra-low-cost car

Written by fe Bureau | New Delhi | Updated: Jan 4 2012, 08:08am hrs
After months of uncertainty surrounding the fate of the ultra-low-cost project that brought Franco-Japanese firm Renault-Nissan to the doorsteps of Bajaj Auto in 2007 to forge an alliance, the Pune-based company has kept its promise and showcased the four-wheeled vehicle, RE60, on Tuesday.

Positioned as a replacement for the three-wheelers, the company is hopeful that a chunk of the 150 cc three-wheelers in the country would move up to the 200 cc four-wheeled vehicle.

The RE60 would be manufactured at the companys Aurangabad facility, which has two plants one which makes motorcycles and the other which produces three-wheelers.

Rajiv Bajaj, MD, Bajaj Auto, said that while Renault-Nissan is yet to see the product in its physical form, the company is open to using the platform to roll out other vehicles with minor modifications, which could be used to manufacture vehicles for the Franco-Japanese company as well.

Tight-lipped on the tentative price point of the vehicle and the cost to company to produce the product since it is competitively sensitive information Bajaj merely said that it would be available for a mass volume price. He added that since Bajaj Auto is the most profitable two-wheeler company in the country, it would not produce a vehicle, which has an Ebitda margin of below 20%. Bajaj Auto is likely to export the vehicle to Sri Lanka.

Last couple of years have been outstanding for Bajaj. We thought of starting the new year by showcasing something different and not a motorcycle, he said.

He added that the company has come a long way from manufacturing the cheapest scooters (Bajaj Chetak) to the most expensive motorcycles in the country. The company is also the countrys largest two-wheeler exporter and expects the fiscal to end with exports of 1.5 million units worth R6,500 crore.

As per the original plan, Bajaj Auto entered into a tripartite arrangement with Renault-Nissan to manufacture the ultra low-cost car. However, in 2008 Bajaj Auto felt that such a product would not work in the Indian markets, hence, it opted to roll out a four-wheel vehicle instead. As per the new understanding in 2010, while Bajaj would manufacture the vehicle it would be marketed by Renault-Nissan.

The two sides had differed on the pricing and Renault had also subsequently stated that Bajaj had not showcased the car and would be unlikely to roll it out by December 2012. We are yet to see the car from Bajaj. In that case how do you expect us to put it out on the table and launch it by December 2012 Renault Indias MD Marc Nassif had told FE in June last year. He had also said that if Bajaj does not produce the car on time then Renault could go solo in the project. On Tuesday, however, the company declined to comment. Attempts to reach Nassif did not materialise.

According to the company, the product would set a global benchmark in promoting green technologies in automobile segment. RE60s emissions would be at 60 grammes of carbon dio-oxide per kg.

Bajaj said that while the engine capacity would be at just 200 cc it is still a highly powerful and efficient engine. It is fully legitimate to run on European roads, Bajaj said.