Bajaj Holds off Low Cost Car

Bajaj has earlier announced that it will launch its ultra-low cost car in India by 2011. Bajaj had planned to produce the car along with Renault and Nissan as its joint venture partner. However, the company does not find the project so interesting after all. Rajiv Bajaj recently announced that it will not launch its ULC in India. “There appears to be no point in launching a new car when there are already so many models in the market - from Mercedes to Nano. We did want to launch a low-cost car but now we have changed our mind,” said Bajaj. With his tongue firmly-in-cheek, he added, “Let the company focus on bikes and then think of cars. First, the company can upgrade the three-wheelers. Maybe, we can add a fourth wheel to it and make something like a carry van, but it will certainly not be a car.”

Bajaj-Nissan-Renault ultra low cost car projects had been sailing through troubled waters ever since it was first announced. Earlier there was a conflict regarding the branding of the car where Bajaj wanted it to position it as value-for-money rather than positioning it on the basis of price, as suggested by Renault and Nissan. Later, Bajaj had objections regarding the design of the car and a completely new design was proposed by Renault. Recent reports about the project suggested that the car may not have Bajaj name at all.

Thus, Tata Nano does not seem to have any competitor in the near future as Bajaj declines to go ahead with its ULC project and intends to focus on its bikes business. Bajaj had also recently announced that it will also stop producing its geared scooter ‘Chetak’ in the wake of growing competition from gearless scooters and declining market segment for geared-scooters.

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