Bajaj and Renault-Nissan are on their course to develop Tata Nano’s rival small car

Bajaj and Renault-Nissan alliance joined hands to produce a small car that would compete with Tata Nano in India. Though reports came out that the two companies are having trouble on the project, Simon Sproule, Director, Communications, Renault-Nissan alliance refuted the claim.

He said, “We watch the headlines in India and every month we see something being announced as ‘new’. In fact, there is really no new news since the partnership was announced last November.”

Rumor also spread out that Renault-Nissan would also get into a partnership with Ashok Leyland to manufacture another small car but Sproule said that at the moment their partnership with Ashok-Leyland is limited to producing commercial vehicles only.

Mr. Sproule said that his company always intended to have a partnership with OEM rather than getting into a joint venture. Bajaj’s technology, manufacturing capability and supply network would fuse with Renault-Nissan alliances expertise in marketing four-wheel vehicles.

Renault-Nissan teamed up with Bajaj Auto to get into the entry level market of India because Bajaj auto has been producing two-wheeler and three-wheeler vehicles and selling them at a competitive price in India.

The officials of the two companies are now in “working phase of the project.” They have not yet decided on various issues such as the design, manufacturing and sales.

The two companies signed a MoU on July 8, 2010. The vehicle will be launched in the market by 2012 and would cost around Rs.1.17 lakh. Bajaj will develop and manufacture the car and Renault-Nissan will focus on branding, marketing and sales in India and overseas.