Indian Car Blog - Carazoo.com

It just seems like the Tata Nano will no longer have a contender in its segment, at least not for now.

Bajaj Auto, India’s two-wheeler maker who also was in news for quite some time with its proposed launch of its Ultra-Low-Car (ULC) tying up with Nissan and Renault to venture into the Indian Car Market has just backed out from the project and dumped the project to concentrate more on the growing two-wheeler market in India and abroad.

So you can go out shopping for the Nano than hoarding the money to buy Bajaj’s ULC. Rahul Bajaj, the Chairman of Bajaj Auto is of the opinion that producing and launching of the ULC (Costing Rs 1 Lakh) is no longer a great idea. The inside sources say that car if at all launched would not even carry a Bajaj brand name which peeved the Bajaj boss man.

According to Rahul Bajaj, “There appears to be no point in launching a new car when there are already so many models in the market - from Mercedes to Nano. We did want to launch a low-cost car but now we have changed our mind”. He also added “Let the company focus on bikes and then think of cars. First, the company can upgrade the three-wheelers. Maybe, we can add a fourth wheel to it and make something like a carry van, but it will certainly not be a car.”

The ULC project didn’t go too well with Bajaj Auto due to branding, product details and pricing that Nissan and Renault had laid out in front of Bajaj Autos.

Bajaj Auto’s managing director Rajiv Bajaj, who is Rahul’s son, was reported to have said that since there is an excess capacity in the global car market , “the company thinks that ULC, being a standalone project , will be vulnerable to business cycles” .


Source: Economic Times

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Tata Nano car parts and accessory makers are getting calls from global biggies for their assistance to aid them with their new small cars. These component suppliers who made the Nano possible are now ready to yield the paybacks of their innovative low-cost technologies.

Global car makers like Nissan-Renault, Toyota, Volkswagen and Honda are proposing to launch small cars in the Indian car market. These car majors are approaching the key component suppliers of the Nano for car parts and accessories for their small cars.

India’s second largest car maker Hyundai has revealed that it will launch a new car positioned below theSantro with an investment of Rs 800 Crore. Similarly, Toyota is working on a platform for a small car for India with an investment of over Rs 3,000 Crore. Honda has also announced its first small car that will have India as the hub. The Nissan Micra, Chevrolet Beat and Volkswagen Polo will make their India debut in 2010, while the Nissan-Renault-Bajaj ultra low-cost car is due in 2012.

As a result, the Tata Nano’s 100-odd vendors have a reason to smile with as many as seven small cars lining up for Indian debut in the next two years. Moreover, the potential challenger to the Nano, the low-cost car from Bajaj Auto and Nissan-Renault alliance, is likely to be benefited by Nano vendor base.

Though the Nissan-Renault-Bajaj ultra low-cost car project will source almost 100 per cent from the Bajaj supply base, but many suppliers in that pool are Nano parts suppliers.

Most of the car makers are looking at replicating the ‘Nano experience’ in their products as they are planning to introduce their cars at lower prices than their existing range. But before they tie up officially, they want their components to be validated by their overseas parent companies.

The small car market in India comprises 80 per cent of the 1.5 million units industry and is all decked up to experience a number of new launches in the next fourteen months.

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It looks like Renault is having a very tough time ahead. Its joint venture with Mahindra and Mahindra seems to be heading nowhere. And now when both the companies have realized that the joint venture is not bringing them any treasure to fill up their coffers, they have finally decided to talk it out.

It is still not known what will be the final decision of both the companies. But of the many issues that the companies are facing right now, the most important is the unsuccessful tenure of Logan, the only car that is launched of the joint venture between the two companies.

It does not look like the Renault will walk away from the partnership or the Indian car market. And the very obvious reason is that the Renault still wants to have its fingers dipped in the Indian car market pie, which is the most happening car market of the world at the moment.

In a joint venture between the two companies, 51 per cent of the stake is held by Mahindra and Mahindra while the rest of 49 per cent is being held by French car maker Renault. The companies will be discussing on whether it is feasible to launch a new car at this time and what should be the future plans to remain in the business. We desperately hope against hope that both the companies sort it out in a cordial way and will not think of a break up.

Renault’s ultra-low cost car plan also seems to be affected by the perplexity that is happening between the two companies.

Bajaj, its partner in producing the ultra-low cost car, seems to be not happy with the proposal of partnering only with Renault, leaving aside Mahindra & Mahindra. Bajaj already had brand issues with Renault. And the company is not comfortable in joining hands with Renault, which is already in turmoil.

Well as the companies are still in discussion, let us all keep our fingers crossed for an intelligent decision from the companies.

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