Renault, Nissan, Bajaj form low-cost car venture

By Rina Chandran

MUMBAI (Reuters) - Renault-Nissan (RENA.PA: Quote, Profile, Research, Stock Buzz) (7201.T: Quote, Profile, Research, Stock Buzz) and India's Bajaj Auto said on Monday they would form a joint venture to develop a low-cost car, joining a growing list of carmakers eager to tap emerging markets and as soaring oil prices drive a move to fuel-efficient "green" cars.

The venture, which will be 50 percent owned by Bajaj Auto, and 25 percent each by Renault and Nissan, will make cars with a wholesale price range starting from $2,500, they said, putting it squarely in the same range as Tata Motors' (TAMO.BO: Quote, Profile, Research, Stock Buzz) Nano.

With a planned initial capacity of 400,000 units a year, sales will start in early 2011 in India, with potential in other emerging markets around the world, they said in a statement.

"The project is on line to meet targeted performance and cost," it said, without specifying details.

Nissan and Renault have had a big success with the no-frills Logan sedan worldwide, but for Bajaj (BJAT.BO: Quote, Profile, Research, Stock Buzz), the second-biggest motorcycle maker and top three-wheeler maker, this is a first. Bajaj also plans to foray into commercial vehicles.

Interest is keen: Nano, which was unveiled to a rousing reception in January, is expected to be on the market in September or October, at a dealer price of 100,000 rupees ($2,400), or about half the cost of the cheapest car now.

General Motors (GM.N: Quote, Profile, Research, Stock Buzz) and Hyundai (005380.KS: Quote, Profile, Research, Stock Buzz) have expressed interest in a rival car, while others including Toyota Motor (7203.T: Quote, Profile, Research, Stock Buzz), Volkswagen (VOWG.DE: Quote, Profile, Research, Stock Buzz) and Ford (F.N: Quote, Profile, Research, Stock Buzz) are also keen.

The Nano is expected to shift motorbike users faster and eat into the share of leaders Maruti Suzuki (MRTI.BO: Quote, Profile, Research, Stock Buzz) and Hyundai.