Nissan ends JV with Bajaj Auto; shelves low-cost car production

Renault-Nissan shelves plans of producing ultra-low cost car with Bajaj Auto, reports Ronojoy Banerjee of CNBC TV18.

Nissan has said that it will go to the Indian market with its own products. This ends months of uncertainties and speculation. The company also said that it will enter into partnerships with Renault and Ashok Leyland.

“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.

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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 an ultra low cost car, while the alliance would sell it under their badging.

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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 the time of unveiling the RE60, Bajaj Auto Managing Director Rajiv Bajaj had said it would be up to Renault-Nissan whether to source it or not after seeing the product.

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Bajaj had, however, refused to call the RE60 that is a powered by a 200 cc rear mounted petrol engine with a top speed of 70 kmph, as 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 USD 3,000. It had partnered with Renault-Nissan for the ultra low cost (ULC) car project. The ULC was first scheduled to hit the roads in India 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 USD 2,500, Bajaj insisted on lowering the overall cost of ownership.

Nissan said that it will launch 10 models including an SUV in India by 2016

With inputs from PTI