Flip Flop between Bajaj Auto & Renault Nissan on small car

[RemingtonSteele]

Bajaj Auto shelves minicar plan for Renault, Nissan

Bajaj Auto shelves minicar plan for Renault, Nissan - report

Bajaj Auto Ltd has shelved a project to develop a low-cost minicar in India for Renault SA and Nissan Motor Co, saying it was commercially unviable, the Wall Street Journal reported.

The company is not planning to get into the low-margin passenger car business, the report quoted Managing Director Rajiv Bajaj as saying.
The company will instead unveil a low-cost commercial vehicle in January, the paper said.

The Renault-Nissan alliance signed a memorandum of understanding (MOU) last year with India's No.2 two-wheeler maker to develop an ultra low-cost car for India and other emerging markets and had planned to launch it in 2012.
The car was expected to rival Tata Motors' Nano, the world's cheapest car.

The design, manufacturing and sourcing for the car was to be done by Bajaj, and Renault-Nissan would handle marketing in India and overseas, according to the agreement between the companies.
Nissan spokesman Simon Sproule said in Tokyo that the partners would be facing certain milestones in making decisions for the project in the next few weeks, but the company had no immediate announcement to make.
Bajaj Auto and Renault could not be immediately reached for comments.


Source: Business News - Indian Stock Market, Stock Market News, Business & Finance, Market Statistics | Reuters India

[Latheesh]

As expected, to make something like Nano they need to put lot of hardwork. I think Bajaj wants the controlling power in the project same like Mahindra-Renault alliance. Now nano is not selling in big numbers neither it affected two wheeler sales.

Bajajs - better concentrate on two wheeler only :-)

[charthom]

Originally Posted by Latheesh

As expected, to make something like Nano they need to put lot of hardwork. I think Bajaj wants the controlling power in the project same like Mahindra-Renault alliance. Now nano is not selling in big numbers neither it affected two wheeler sales.

Bajajs - better concentrate on two wheeler only :-)

+1 to that. Nano was an engineering marvel-for the occasion.It prompted even Toyota to come out with people's C class sedan!! To repeat the achievement is not easy.You need a lot of dedication and character-which Bajaj obviously lacks.

Why small cars?Bring out proper cars at decent prices. manufactures are selling cars at "Safe Max" price ie.the maximum safely possible price with minimum safely possible value for money. Rest is left to buyer- to justify,to defend,to be content,to fight etc etc.Be professional-give value at decent prices-see how your sales will soar! eg.the Cruze.

The consumer is far less prejudiced.And smart.We are accepting the mediocre products only out of despair. Anyone who gives us hopes,aces with us.

[girishglg]

This maybe a fallout of a rethink on the ultra low cost car in India (read 1L car stretch to 2L) since the real target segment that Nano was launched to cater was the two wheeler upgrades. However the car has been patronized by existing car owners as their second or third car in their garage. This was not really expected by Tata himself and thus the sales numbers of the Nano.

Bajaj car's value proposition as disclosed in public was not in term of pricing but an extremely efficient engine with an unbelievable FE which would draw the two wheeler bunch to pick up the car. I guess there may not have been a path breaking progress in developing such an engine as well and the flip flops with Renault - Nissan JV which had made the project shaky from the start has finally resulted in this decision. Sad that we did not get to see a worthy competitor in the frugal car space!!

[RemingtonSteele]

Flip/Flop: Bajaj says project with Renault-Nissan on

Bajaj says project with Renault-Nissan on

8:14pm IST

MUMBAI (Reuters) - Bajaj Auto Ltd said its project to develop four wheelers for Nissan Motor Co and partner Renault SA was on track after a newspaper said it had been called off, citing a top executive.

Earlier on Friday, the Wall Street Journal reported Bajaj had shelved the project to develop a low-cost minicar in India for Renault-Nissan, saying it was commercially unviable, citing Managing Director Rajiv Bajaj.

"We would like to clarify the Bajaj-Renault-Nissan project is very much on," S Ravi Kumar, Bajaj Auto's senior vice-president for business development, said in an e-mailed statement to Reuters.

"The new four-wheeler platform, which will have commercial and passenger applications, will be showcased to Renault-Nissan in January 2012."

The Renault-Nissan alliance signed a memorandum of understanding (MOU) last year with India's No.2 two-wheeler maker to develop an ultra low-cost car for India and other emerging markets, and had planned to launch it in 2012.

The car was expected to compete with Tata Motors' Nano, the world's cheapest car.

The design, manufacturing and sourcing for the car was to be done by Bajaj, and Renault-Nissan would handle marketing in India and overseas, according to the agreement.

"Bajaj Auto will remain in the commercial space of the business while Renault-Nissan, if they decide to go ahead with the project, will be responsible for the personal transportation application," Kumar said.

The emailed statement added Bajaj had expressed concern on the viability of the project to Renault and Nissan head Carlos Ghosn in November 2009, but the venture partners had then agreed to rework the project toward a four-wheeler on a new platform.

Nissan spokesman Simon Sproule said the partners face milestones in making decisions for the project in the next few weeks, but the company had no immediate announcement to make.

The Renault-Nissan alliance said in a statement emailed to Reuters that it would not comment on discussions with Bajaj.

It added it was pursuing talks with other companies and independently developing cars for the Indian market, including the entry-level segment, and was on track to launch "a spectrum" of vehicles there.

Source: Business News - Indian Stock Market, Stock Market News, Business & Finance, Market Statistics | Reuters India

[aaggoswami]

This was expected. Since last three-four months news about this was going on. What I am not able to understand is that why only Europeans have issues in relations ?
Fiat-Peugeot-PAL : Well known story
Mahindra-Renault : Broken
Tata-Fiat : Openly accepted that its not going in positive direction

Actually this is good for Bajaj, but not so good for Renault. Bajaj can now concentrate more on bikes rather than cars. Renault, without any doubt, is going to face a lot of challenges in Indian market. Renault should focus on bringing in small cars that they have like Clio. Gunning for Nano segment wont lead them anywhere so fast. And then image is also a problem. On one hand Renault has Fluence which is placed at a higher level, and on the other hand, Renault will have Nano competitor, so this can become an image issue.

[xingamazon]

Well on the brighter side.

Its good that a wobbling relationship is cut off sooner than possible. Imagine if the relationship had failed after launch then some 20K odd customers would have had no clue on how to service thier vehicle etc. Similar to situation faced by Pegeout 309 customers.
Its good such relationships are cut off sooner.

Originally Posted by Latheesh

Bajajs - better concentrate on two wheeler only :-)

I am sorry but thats too harsh a statement, consider this all of the major car players now, had at one point started either has two wheeler manufacturer or airplane manufacturers.
Its a way of mutation, and why should we deny an indian company having a mutated growth ?? Just my view.

I would in fact want Bajaj to bring the punch they brought thro thier Pulsar range into the cars. This would also delight many people who like to own Indian flavoured cars.