Nissan's low-cost car plan breaks down

Nissan's low-cost car plan breaks down

 Japanese auto maker Nissan on Tuesday said it has decided not to continue its partnership with Bajaj for sourcing of the ultra-low cost (ULC) car, ending months of uncertainty.

“We will not be continuing our relationship with Bajaj,” a Nissan official said, without disclosing reasons, when asked if the company has decided to end the proposed pact to source low-cost cars from the Indian automobile firm.

When contacted, Bajaj Auto Managing Director Rajiv Bajaj declined to comment on the issue stating he has not “heard from them”. As per an agreement reached between Renault-Nissan alliance and Bajaj Auto in 2009, the Indian automaker was supposed to design, develop and manufacture the product, which was intended as a ULC car, while the alliance would sell it under their badging.

In 2010, Renault-Nissan announced the signing of a memorandum of understanding with Bajaj Auto to take forward their ULC car project. Since then, Bajaj Auto had gone on to develop the RE60 but it remained uncertain if Renault-Nissan would source the product to sell in India and similar global markets and their partnership has not flourished.

Bajaj Auto had unveiled the RE60, a mini-four wheeler meant for urban transportation to replace three-wheelers at the Auto Expo in New Delhi in January this year. At that time, Rajiv Bajaj had said that it would be up to Renault-Nissan to source it or not after seeing the product.

‘Not a car’

Bajaj had, however, refused to call the RE60, powered by a 200 cc rear mounted petrol engine with a top speed of 70 kmph, a car, saying it was a commercial vehicle meant for passenger transportation.

In January 2008, Bajaj Auto had unveiled its concept passenger car with an expected price of $3,000. It had partnered with Renault-Nissan for the ULC car project.

The car was first scheduled to hit Indian roads in 2011, but was delayed due to differences between the partners on pricing and design. While Renault-Nissan wanted to price the car at around $2,500, Bajaj is understood to have insisted on lowering the overall cost of ownership.