Renault, Nissan and Indian partner Bajaj hope to undercut the price of the Tato Nano, shown here, with their ULC project.
The Euro-Asian Renault and Nissan Alliance will work with a third partner, India’s Bajaj Auto, to produce a super-low cost auto aimed at India’s emerging middle class – and targeting the Tata Nano, currently the lowest-priced model available on the subcontinent.
“We are aiming for a price of $2,500,” said Renault President and CEO Carlos Ghosn, a target that helps explain why the project has been delayed for several years. The three partners announced the program in 2008 and were hoping to be to market this year. Instead, it will now be delayed until 2012.
Bajaj Managing Director Rajiv Bajaj has agreed to move ahead, though his eponymous firm originally opposed the idea of focusing on a rock-bottom price. Instead, industry insiders say, his goal was to emphasize high fuel economy and low maintenance costs – even if the vehicle were to come in at a price higher than that of the well-publicized Tata Nano.
If Renault, Nissan and Bajaj can pull it off, however, the vehicle, codenamed ULC, for ultra-low cost, would be priced about 10% below the base Nano, which is currently being offered in three versions, the most expensive running about $4,000.
The ULC is expected to be smaller than the Indian market’s current best-seller, the Maruti Suzuki Alto.
The decision to confirm the latest strategy for the ULC follows a comment made, in March, by Nissan Executive Vice President Collin Dodge that, “The physics of (building the ULC are) very difficult. We have not yet found a solution as there are a lot of engineering solutions required.”
The three makers now have until 2012 to solve those issues.
There appear to be no plans, at least for now, to export the ULC, which is aimed at a particular niche in the unique Indian market. With minimal safety and emissions technologies, it’s unlikely the vehicle would be able to meet standards for developed markets, or even for the world’s other fast-growing emerging markets, like Brazil, Russia or China.