Renault feels that the low-cost car project with Indian automaker Bajaj, is very important for them.
Renault-Nissan will partner with India’s No. 2 motorcycle maker and top three-wheeler maker, Bajaj, to develop and manufacture a $3000 car following the footsteps of Tata Motors, who unveiled their Nano last month which costs a mere $2500 excluding taxes and transportation charges.
Patrick Pelata, executive vice-president of Renault, after signing the memorandum of understanding late on Friday for a $1.0b plant to make 400k vehicles and power trains in Southern India, told Reuters that it was very important to them. He also mentioned that the Nano is "a big step in the automotive industry," and would help people in developing countries traveling in motorcycles, to shift to a better and inexpensive mode of transportation.
Chief executive of Nissan and Renault, Carlos Ghosn , announced that the production is set to commence somewhere in late 2010 or early 2011. Tata Motors and Renault will not the be the only ones to flock the market with their ultra-cheap products. Fiat, Hyundai and Toyota have their plans as well and will join the race at a later stage to give the Indian middle-class people a basic car. Small cars account to approximately 67% of passenger car sales in India and the the country is steadily evolving into a hub for both manufacturing and exporting small cars.
Renault is presently sourcing parts worth about 100 million euros from India, and a dedicated logistics centre in the western India has also been set up. Renault has a tie-up with Mahindra & Mahindra for manufacturing the Logan sedan.