12 May 2008

Renault and Nissan have signed a deal with Indian manufacturer Bajaj to form a company that will produce a new low-cost car for the Indian market.

 

The ULC will cost from $2,500 and will go up against the Tata Nano in the basic automotive market, starting in India but moving on to other developing markets. The first cars will be on sale in 2011.

 

Renault and Nissan will each take a 25 per cent stake in the joint venture company, with Bajaj taking the other 50 per cent. Bajaj manufactures two-wheeled vehicles and light commercial vehicles and has sales of 2.5 million units a year.

 

The joint venture will build a 400,000 a year capacity carmaking plant at Chakan in Maharashtra.

 

Renault and Nissan are planning their own carmaking plant near Chennai, but their previous Indian partner, Mahindra and Mahindra, pulled out of this scheme earlier this year.