It's low on cost but high on technology. That's how Bajaj Auto would like to describe its proposed small car. The company is betting on fuel economy to give it an edge. Rahul Bajaj, chairman, Bajaj Auto, said, "It is a smart car not a cheap car, low on cost but high on quality."
So this is what Bajaj Auto means when it talks of 'very competitive vehicles'. While Bajaj has signed an MoU with Renault to study the Indian market for low-cost cars, it is developing technology indigenously to bring down the total cost of ownership.
Managing director, Rajiv Bajaj says that given India's equated monthly instalment culture, it's the overall running cost in the end that makes the real difference. Moreover, low cost for Bajaj will not mean low margins.
"We have the highest operating margins in two wheelers and want to maintain that. So the car has to be profitable. We have to see the low-cost structure and ownership costs which should come down from Rs 10,000 per month to about Rs 6,000 per month, whereas, it is only Rs 3,000 per month in the case of a bike."
There is a huge cost difference for a majority of customers. "This is where we are hitting on. We need to be different and not be another car maker. We will create a niche for ourselves with our different products," added Rajiv Bajaj.
So will Renault help create this 'different product'? More clarity will emerge by early next year. But Bajaj says that if there is a partnership, it has to be one of equals. When asked as to who will contribute what, Bajaj said, "We want to be in control and be there right from the technology to the delivery of the car."
So what will Renault's contribution be? "We will use Renault's expertise to put the chassis and the body on the car," Bajaj said.
The technology for the small car is also based on Bajaj's patented DTSi technology. Like its new bike XCD, which is the most fuel-efficient at 109 / kl, Bajaj hopes its small car will win customers both on price and economy.