Bajaj One Lakh Car By 2011

After Tata, its official that Bajaj Auto Ltd. and Renault-Nissan, which is the world's fourth largest car maker, will build a $2,500 (Rs.1 lakh) car in India to challenge Tata Motor's Nano. The car is codenamed ULC, short for Ultra Low-Cost and will officially go on sale in the year 2011. However, Tata's Nano will be available to buyers by Diwali this year.

 

The prototype of the ULV was unveiled before the public at the Auto Expo 2008 that took place in Delhi, where Tata also showed its Nano. The Managing Director of Bajaj, Rajiv Bajaj said that their ULV will cost more than a lakh and would return about 34 km/litre. Meanwhile, the competition is heating up. While the Nano has a engine under its back seat, the ULC will be a front-engined car, like all the traditional cars in the market today.

 

Bajaj-Renault's ULV will be manufactured in a new plant that is being developed at Chakan, near Bajaj's existing two-wheeler plant, reports said. The plant initially will have a capacity of 4 lakh vehicles per year; while the Tata's Nano plant in Singur will have a capacity of 2.5 lakh units per year. Bajaj, who is the second largest motorcycle maker in India, will own 50% stake in the joint venture between the two companies while the remaining part will be equally divided between its partners. This would be Renault-Nissan's second partnership in India after Mahindra & Mahindra for its low cost sedan, the Mahindra Renault Logan.

 

The consumers are going to get more choices in low cost cars for sure, but some people don't seem much impressed by this innovation. Rajesh Ittissery, a software professional working in Mumbai said that he won't be going for a car because fuel prices are already high as it is. Moreover, he is already getting about 60-65 km/litre from his two-wheeler and seemed disinterested in upgrading into a small car.

 

According to the Society of Indian Automobile Manufacturers, the two-wheeler figures in the industry provide a different perspective. India's motorcycle market is now reaching to about 4.5 crores and is stagnating. Car sales though have grown by about 12%, to about 12 lakh vehicles in the year ended March 31, 2008.