The Tata Motors is ready for the launch of its $2,500 Nano, the world’s cheapest car, later this year. Now, Bajaj Auto Ltd and Renault-Nissan today announced their own plans for a $2,500 car. The vehicle, codenamed ULC, would be produced by 2011 as a joint venture (JV) between Bajaj and Renault-Nissan. While Bajaj will have a 50 per cent stake in the JV, Renault and Nissan will have 25 per cent each.
A statement from Bajaj said that the car would be rolled out from a brand new plant in Chakan, Maharashtra, and would be positioned for exports to other markets too. A prototype of the ULC was showcased during the auto expo and the car is expected to dish out higher than industry fuel economy. Bajaj Auto MD Rajiv Bajaj had said that the car would run twice the distance of an average car in the country today for one litre of fuel.
While the Nano and ULC will create a new segment of low cost cars in India, it is likely to eat into the country’s huge used car market which is estimated at nearly 1.5 million vehicles, about 120 per cent the market size of new cars. Further, this segment is also likely to hit the two- and three-wheeler industry, which is currently one of world’s largest at over 60 million units per annum.