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Renault-Nissan and Bajaj to make cheap Indian car


Renault-Nissan and Bajaj to make cheap Indian car


The competition to build the world’s cheapest car is hotting up. Renault-Nissan is the latest the enter the fray, in a joint venture with Indian firm Bajaj, which is the country’s second-biggest maker of motorbikes.

They say their offering will cost around 1,600 euros. The plan is to initially produce four hundred thousand vehicles a year starting in 2011.

India currently has 45 million scooter and motorcycle owners and carmakers want to supply those who trade up. An increasing number are doing so. Car sales are forecast to nearly double to two million annually by 2010.

In January, India’s Tata Motors’ unveiled the Nano, which is due to go on sale later this year, also for around sixteen hundred euros, though Tata could have difficulty keeping to that price given the rising cost of raw materials, particularly steel.

Critics have warned that these low cost cars will create pollution problems and further clog up India’s roads.

With this joint venture, Renault hopes to boost its presence in India. It already sells its no-frills Logan there through a joint venture with commercial vehicle and tractor maker Mahindra & Mahindra.

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