Car News in India

Bajaj Auto said that it will make use of bike and 3-wheeler parts in the proposed low-budget small car. This will result in the project cost for the new car being pared down from Rs 1,500 Crore to around Rs 200-300 Crore.

“There is excess capacity in the global car market. Our thinking was that if the ultra low-cost car is a standalone project, it will be vulnerable to business cycles. We decided to derisk the project by leaning on our motorcycle and three-wheelers for its platform and aggregates. Around 70-80 per cent of the internal components should be common,” said Mr Bajaj.

Mr Bajaj said the proposed car will not be branded ‘Bajaj’. The equity holdings in the company making the low-cost car may also change. “We did not revisit that figure, so as of now the 50:25:25 JV is valid, but when we sign the contract that may change,” Mr Bajaj said.

Bajaj Auto has a 50 per cent stake while Nissan and Renault have 25 per cent each in the joint venture to develop the low-budget car.

As for the ultra low-cost car, it will compete head on with the Nano. Offering details of the project, Mr Bajaj said: “The mileage will be way over 20 km per litre. We will target 30 km per litre. To target a two wheeler upgrader, you have to attack monthly cost of ownership.”