India: Bajaj Unveiled Low-Cost Car; Ford to Invest $500 Million in Small Cars

08 January, 2008 12:00:00

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Two days before the Tata ‘people’s car’ makes its debut, another ultra low-cost car, this time from the Bajaj stable, made its appearance. The prototype vehicle will serve as the basic platform for the Renault-Nissan-Bajaj ultra low-cost car priced at around $3,000.

Bajaj, which only made two and three-wheelers before this venture, said the vehicle will offer twice the fuel efficiency of existing small cars.

The Bajaj prototype, which has been designed in house with inputs from individual consultants and specialists, will be the basic platform on which the ultra low-cost car will be built.

The car is expected to give twice the mileage of current B-segment small cars with its gasoline engine. And it will have multiple powertrain options. “We will also have a diesel option and one can always build LPG, CNG and hybrid options on to the platform as well,” Mr Bajaj said. For diesel, Bosch is “one option”, he added.

Bajaj said a new plant at Chakan near Pune in western India would likely produce the car. The plant will also make a light commercial vehicle that Bajaj plans to launch in early 2009.

The vehicle would feature twice
the fuel economy of current cars
but would cost more than the
2,500 dollar car -- the world's
cheapest -- that Indian manufacturer
Tata Motors will unveil Thursday at
the 2008 New Delhi Auto Expo.

Having developed the car on its Lite platform, Bajaj now intends to rope in Renault and Nissan to develop it further for joint production. Renault chief Carlos Ghosn has already announced his company's plans to use India as base to develop a $3,000 (Rs 1.2 lakh) car for global markets.

Japan's Toyota Motor Corp. and Honda Motor Corp., among other global carmakers, also say they are mulling building low-cost cars as India's population becomes more affluent and trades up from motorcycles. Small car sales are expected to nearly double to around two million units by 2010.

Ford Motor Co. said today it plans to invest $500 million in India to double manufacturing capacity by 2010 and make a small car and engines, making the fast-growing market a key production hub in Asia-Pacific region.

India will become a strategic production hub for small cars at Ford, which joins a growing list of carmakers focusing on small cars as oil topped $100 a barrel and the move to fuel-efficient "green" cars gains momentum.