Renault-Nissan and Bajaj to Make Ultra-Low-Cost Car

The Renault-Nissan alliance and India's Bajaj Auto signed a memorandum of understanding (MoU) to build an ultra-low-cost car, which is likely to hit the market by 2012 in India and other emerging markets.

The agreement follows the earlier MoU signed between the Renault-Nissan Alliance and Bajaj Auto in 2009 that allowed them to start work on the proposed low-cost car.

The car, scheduled for a launch in 2012 plans to rival the world's cheapest car -- the Nano -- being produced by India's leading vehicle maker Tata Motors.

The design, engineering, sourcing and manufacturing of the unnamed new model will be handled by Bajaj Auto, while marketing and selling will be done by the Renault-Nissan alliance.

Bajaj Auto, which unveiled a snub-nosed prototype of the car in 2008, has a 50 percent stake in the venture while Renault and Nissan have 25 percent each.