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Bajaj teams up with Renault - Nissan to build Nano cars

As Tata Motors readies for the launch of its $2,500 Nano, the world's cheapest car, later this year, its first competitors Bajaj Auto Ltd and Renault-Nissan announced their own plans for a $2,500 car.

The vehicle, codenamed ULC, would be produced by 2011 as a joint venture (JV) between Bajaj and Renault-Nissan. While Bajaj will have a 50 per cent stake in the JV, Renault and Nissan will have 25 per cent each.

A statement from Bajaj said that the car would be rolled out from a brand new plant in Chakan, Maharashtra, and would be positioned for exports to other markets too. Bajaj MD Rajiv Bajaj and , President and CEO of Renault and Nissan Carlos Ghosn announced they will form a joint-venture company to develop, produce and market the car, code-named ULC, with a wholesale (dealership) price range starting from $2,500.

The statement did not, however, specify the planned investment in the JV. Tata Motors is investing approximately Rs 2,000 crore for its Nano venture. The Nano, which was unveiled during the auto expo earlier this year, is awaiting an October roll-out with the process of identifying dealerships and bolstering the service network underway.

Tata Motors will have an initial Nano capacity of 2.5 lakh units per annum at its Singur plant while the ULC will have a four lakh initial capacity. "We have already acquired 250 acres of land for the plant, which would have an initial production capacity of four lakh units per year," said Bajaj Auto vice-president (business development) S. Ravikumar.

"While the car is primarily being designed for India, there are many similar markets where there could be good export potential. We will tap that potential at an appropriate time."

A prototype of the ULC was showcased during the auto expo and the car is expected to dish out higher than industry fuel economy.

Ford Motor launches engine plant in India

Ford Motor Co has started operations at its engine assembly plant in India, the U.S. carmaker said on Tuesday, as it seeks a bigger share of the fast-growing market.

The plant, near Chennai in southern India, will initially make 60,000 engines annually for its Fiesta and Fusion models, starting with the 1.4-litre diesel Duratorq engines. Ford will first aim the 50,000 diesel and 10,000 petrol engines at the local market, and then export them. It will have an eventual capacity of 250,000 engines.

"This facility will help position Ford India as a strategic manufacturing hub for low displacement power train engines within our Asia Pacific and Africa region," said President and Managing Director of Ford India Michael Boneham.

"The domestic assembly of these engines will facilitate quicker time-to-market response, and greatly enhance the efficiencies of our operations," he said.

With nearly 50 percent local content in the diesel engines, Ford will be able to compete more effectively in the Indian market, where annual passenger car sales are forecast to nearly double to 2 million units by 2010.

Ford India, which set up shop in India in 1995, said in January it would invest $500 million to double manufacturing capacity to 200,000 units by 2010 and make a small car to compete in the dominant segment of the market. Reuters ‍