Renault-Nissan ties up with Bajaj for new ultra-low cost car

The Renault-Nissan alliance has teamed up with Bajaj Auto again to manufacture an ultra-low cost car in India. Carlos Ghosn, head of the Renault-Nissan group, said the joint venture with Bajaj Auto was on track and the car will hit the road by 2012.

"As per the agreement, the design, engineering, sourcing and manufacturing will be handled by Bajaj Auto while marketing and selling will be by Renault-Nissan Alliance," Ghosn said at the India Economic Summit in New Delhi.

"Yesterday, we signed an agreement that the low cost car will be out in 2012. It is going to be an innovative product, the manufacturing cost will be lower than any other available in the Indian market," Ghosn said, without elaborating on the car's price.

Speaking on the sidelines of the India Economic Summit, Ghosn said, "Rajiv Bajaj is not showing any interest in having the Bajaj name on the car," adding, "But it is too early to say what the name and branding will be."

Ghosn also said that Renault will reposition it's low-priced sedan, 'Logan', as its Indian sales are not as expected. "Everywhere else it has done better, but corrective measures will be taken to reposition it in the Indian market," he said.

Renault-Nissan alliance with Bajaj had in 2008 announced plans to manufacture a low-cost small car priced at around $2,500 (around Rs1 lakh). But differences over several issues, including branding, styling and price point had stymied the project.

Ghosn also declined to confirm whether the new low-cost car would stick to initial price point of $2,500.