Renault, Nissan, Bajaj form low-cost car venture

By Rina Chandran

MUMBAI (Reuters) - Renault-Nissan and India's Bajaj Auto said on Monday they would form a joint venture to develop a low-cost car, joining a growing list of carmakers eager to tap emerging markets and as soaring oil prices drive a move to fuel-efficient "green" cars.

The venture, which will be 50 percent owned by Bajaj Auto, and 25 percent each by Renault and Nissan, will make cars with a wholesale price range starting from $2,500, they said, putting it squarely in the same range as Tata Motors' Nano.

With a planned initial capacity of 400,000 units a year, sales will start in early 2011 in India, with potential in other emerging markets around the world, they said in a statement.

"The project is on line to meet targeted performance and cost," it said, without specifying details.

Nissan and Renault have had a big success with the no-frills Logan sedan worldwide, but for Bajaj, the second-biggest motorcycle maker and top three-wheeler maker, this is a first. Bajaj also plans to foray into commercial vehicles.

Interest is keen: Nano, which was unveiled to a rousing reception in January, is expected to be on the market in September or October, at a dealer price of 100,000 rupees ($2,400), or about half the cost of the cheapest car now.

General Motors and Hyundai have expressed interest in a rival car, while others including Toyota Motor, Volkswagen and Ford are also keen.

The Nano is expected to shift motorbike users faster and eat into the share of leaders Maruti Suzuki and Hyundai.