Bajaj Auto?s small car dream is set to turn into reality with two of its partners ? Renault and Nissan ? agreeing to ink two separate MoUs within a month for setting up two joint ventures for the car, which is slated to roll out in early 2011.
Bajaj Auto chairman Rahul Bajaj said the partners are getting into two JVs, the first of which will be a 50:25:25 one among Bajaj, Renault and Nissan for vehicle manufacture.
?The second JV, between Bajaj Auto and Renault, will be a tie-up for engine and transmission. Bajaj will own 51% while Renault will keep the remaining 49%. This unit will be making engines and transmission system not only for the small car but also for Bajaj Auto?s new commercial vehicle, the small truck. Nissan is staying out of this joint venture because it has another JV with Ashok Leyland for commercial vehicles,? he said.
Brushing aside the ?me too? effect following unveiling of the Nano in January, Bajaj Auto MD Rajiv Bajaj tried to underplay the $ 2,500 target price, saying his company?s strategy would be very different from what others are doing. ?Indian cars are lagging in fuel economy and emission standards while in case of two-wheelers Indian companies were setting global benchmarks, he said, quoting a SIAM study. The MD hopes to do this with his cars now.
Sylvain Bilaine, MD, Renault India said, ?feasibility studies indicate that, from the economic point of view, it is possible to make a car for $ 2,500.? The Bajaj MD added that the commercial vehicle project too would be very different and hoped it had nothing in common with Tata?s Ace. ?We think we can do better,? he said. The small car manufacturing and engine and transmission unit will be based in Chakan while commercial vehicles manufacturing will take place in Waluj. The Bajaj-Renault JV in Chakan will also supply engines and transmission units to Waluj.
Renault?s design centre and styling studio in Mumbai will play a major role in design of the car. Bilaine said a company has not been formed yet but the three partners have agreed on the terms. ?A member from Renault has been appointed as programme director for the small car project to oversee it and a representative from Nissan will be joining him soon,? Bilaine said.
The small car will roll out from Chakan in Pune in the first quarter of 2011, he said, adding the initial annual capacity of the plant will be four lakh units. For the new small car plant, Bajaj Auto has taken possession of 250 acre of land.