RE60 fails to please Renault; Is Bajaj ready for a solo ride?

Bajaj Auto may finally decide to go solo on its cheapest commercial vehicle RE60. Its partner Renault Nissan seems not too happy with how things have shaped up with the cheapest commercial car launched by Bajaj.

On the RE 60, Gilles Normand, corporate vice president-India, Africa & Middle-East region, Nissan Motor Corp told CNBC Tv 18 , “Our company has realised some limitation in capital expenditure. So we will have to decide. If we don’t go this time for this opportunity, it doesn’t mean that we have skipped this opportunity forever.”

Therefore Bajaj Auto is gearing up for a solo ride for the market and distribution of the car. Rajiv Bajaj, the managing director of Bajaj Auto said, “For some reason, if Renault Nissan were to be disinterested in the four-wheeler space and if they both wanted to stand up and walk away from it that would be fine as well.”

Bajaj is planning to start exports of RE60 by mid-2012 and will first start export to Sri Lanka. It is looking to set up assembly lines in Asian and African countries: Sri Lanka, Bangladesh, Kenya, Uganda, Nigeria and Latin America.

But Renault Nissan is stead fast to bring multiple cheap cars to the Indian market. The cheapest car of this global car company is priced at Rs 4.1 lakh. And almost half of Indian market lay below this range. Infact, the company CEO Carlos Ghosn had already said that the main reason of failure of Tata Nano is that people do not want just one cheap affordable car but a range to choose from. And this is where Renault wants to pull up its market share.

Sine the situation in Europe and the US is still uncertain, Renault Nissan has been focussing on Indian markets and would fast track execution of its plans here.

“Indian market is growing and will double or more over the next five years. If it doubles, somebody will have to produce 3 million more cars,” Carlos Ghosn, global chief executive officer of Renault Nissan, told CNBC Tv 18 .

Renault-Nissan alliance is looking at a manufacturing capacity of about 4,00,000 units for its small car program. This will be in addition to the alliance’s current manufacturing capacity at its Chennai plant (2, 00,000 units which can go up to 4, 00,000 units).

Watch video: While Renault-Nissan has not given the thumbs up to Bajaj’s four-wheeler, the RE 60, it is still working on its plans for a smaller car than its Micra