labels: M&A, Bajaj Auto, Renault India, Cars, Nissan Motor Company, News reports (automotive)
Bajaj Auto, Renault-Nissan alliance to build ultra-low cost cars at Chakan plant news
12 May 2008

Rajiv Bajaj, managing director of Bajaj Pune: The joint venture project between Bajaj and Renault-Nissan alliance is all set to commence plans to build a new car in collaboration  for the India market, Rajiv Bajaj, managing director of Bajaj and  Carlos Ghosn, president and CEO of both Renault and Nissan, today announced.

The new joint venture will be 50 per cent owned by Bajaj Auto, while Renault and Nissan will acquire 25 per cent each.

Carlos GhosnIndia is one of the leading automobiles market in the world with passenger car sales, which doubled in the past five years, expected to reach 3 million cars annually with the introduction of low-cost cars.

According to the agreement, a new production plant will be set up in Chakan (Maharashtra) in India, to built the new car code-named ULC (ultra -low cost) cars. The production capacity of the plant would be  400,000 units per year, with sales expected to start in early 2011. Initially the cars will be sold in the domestic market, with growth potential in other emerging markets around the world.

The companies say their entry-level ULC will be priced at $2500, which will directly compete with the Tata Motors produce Nano.

In 2007, Bajaj Auto and Renault started preliminary discussions for beginning the small car project together and have since brought in Nissan as a partner in the development programme.

Discussions moved ahead in February this year with Bajaj announcing plans to develop a small car in collaboration with the Renault-Nissan alliance. After today's announcement, production of the new car is expected to begin soon. (Also see: Bajaj Auto, Renault to announce small car details soon)

The feasibility has already extended into joint product development and the project is on line to meet targeted performance and cost.

Renault currently has a partnership in India with Mahindra & Mahindra which sells the low-cost sedan Logan. It has not partnered with M&M for the small car venture because the latter wants to be a global player in the SUV market and feels that this venture would not bring attractive margins.
The Renault-Nissan Alliance, is a 50-50 joint venture company, established in 1999 between  automakers Renault SA and Nissan Motors. The alliance has sold  6,160,046 vehicles in 2007, making it one of the top-ranked automakers globally in terms of quality, technology and profitability.

The Renault Group, based in France designs, engineers, manufactures and sells passenger and light commercial vehicles globally. With operations in more than 115 countries in the world, the  automaker sells vehicles under three brand names - Renault, Dacia and Samsung.

Japanese automaker, Nissan Motor Company generated global net revenues of 10.468 trillion yen in 2006. Nissan has operations in all major global auto markets, selling a comprehensive range of cars, pickup trucks, SUVs and light commercial vehicles under the Nissan and Infiniti brands.

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Bajaj Auto, Renault-Nissan alliance to build ultra-low cost cars at Chakan plant