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Bajaj-Renault low cost car project stalled

By Motortrend India Staff   |   24 May,2009

Bajaj-Renault plans to develop an ultra cheap car to rival Tata Nano has hit a roadblock. The issue of branding seems to be the reason for the delay.

Speaking to press persons on Thursday, Managing Director of Bajaj Auto, Mr Rajiv Bajaj said "the issues over branding have cropped up. A final joint venture agreement has still not been signed."

It has been more than a year that Bajaj Auto and Renault signed a memorandum of understanding (MOU) amidst lot of fanfare in 2008. A formal deal that was supposed to be signed in November, was pushed back due to some differences. A Renault spokesperson in India declined to comment to the status of deal.

It has been learnt that Bajaj and Renault have differences over design, positioning of the vehicle and some technical specifications of the new car. The engine and the overall design of the car has also not been resolved. The ongoing spar could jeopardize the scheduled deadline for 2011 to launch the car. The new set of differences over the branding issue has further delayed the launch.

The development on design of the ultra-low cost car was frozen in September 2008, but the work on engine and the gearbox was on. In March this year, Mr. Rajiv Bajaj called for scrapping of all the work done so far and ordered major modifications in them.

The car is vital for ambitious plans drawn by both parties. While the Bajaj Auto wants to foray not four wheeler segment the French auto manufacturer Renault wants the car sales in India to complement losses in western countries.

The new car was to be the closest rival to Tata Nano in terms of engine and price tag. Tata Nano was launched in April and had received over 2 lakh bookings. The car is likely to hit the road in the second quarter of the fiscal year.

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