French auto major Renault and Bajaj Auto have agreed on a price tag of $2,500 (around Rs1.10 lakh) for the ultra low-cost car both are jointly developing with Rewnault's global partner Nissan, to challenge the Tata Nano in the rapidly expanding small car segment of the Indian market.
"In India, Renault and Nissan are developing an ultra low cost vehicle with the Bajaj group, benefiting from its expertise in the light vehicles and the knowledge of the Indian market. We are aiming for a price of $ 2,500," Renault president and CEO Carlos Ghosn said at the annual general meeting of the company on Friday.
Responding to a question on the agreed price range Rajiv Bajaj, managing director, Bajaj Auto, replied in the affirmative.
With the pricing issue thus settled the partners have put behind them one of the major speed blocks that has held back progress of the project announced in 2008. While Renault wanted a car with a low cost, Bajaj was keen on a car that would give high mileage and low maintenance.
The car was originally scheduled for launch this year but stands postponed to 2012, to take on the Tata Nano, currently available in a Rs1.23 lakh-1.72 lakh price range, ex-showroom Delhi in three variants.
During his India visit, last year Ghosn, while announcing the project finalisation, had said that "as per the agreement, the design, engineering, sourcing and manufacturing will be handled by Bajaj Auto, while marketing and selling will be (done) by Renault-Nissan Alliance."
He, had offered no comment on the pricing of the car.
Officials of the companies had said the car would be smaller than Maruti Suzuki's Alto, the largest selling model in India. The three ULC project partners have reportedly been finding it difficult to find engineering solutions to roll out the low cast vehicle.
In March this year Nissan Motor Co executive vice- president Collin Dodge had said, that it was over two years that Bajaj was trying to produce the car. He added that the physics involved was difficult and a solution had not been found and that it required a lot many engineering solutions.