Bajaj to use bike parts in 1 lakh car

A joint venture between Nissan -Renault and Bajaj Auto, which plans to launch a low-cost car to compete with the Tata Nano, will have 70 to 80 per cent f its parts in common with those used in the Pune-based company's scooters, motorcycles and three-wheelers. 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.

In May 2008, Bajaj, Nissan and Renault had announced plans to manufacture 4,00,000 ultra low cost (ULC) cars per year at a new plant, which would have cost Rs 1,500 crore. Nearly all aspects of that earlier agreement have now changed. "I don't have a number as yet but my estimate is that it would be closer to around 20% of the earlier investment figure due to common product aggregates and common facilities," Bajaj Auto MD Rajiv Bajaj told ET.
Bajaj Auto has a 50 per cent stake in the JV while Nissan and Renault have 25% each. "There is excess capacity in the global car maket. Our thinking was that if the ULC 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% of the internal components should be common," said Mr Bajaj.
Announced in 2007, the project experienced turbulence over branding and product detail. This summer, Rajiv Bajaj went on record to say he had asked for all the work done on the project to be scrapped. He wanted major modifications on design, positioning and other details. The new concept that his team came up with has now met with Carlos Ghosn's approval, following which an announcement was made on a fresh agreement between the partners.