Renault-Nissan alliance inks deal to produce an ultra low-cost car to be sold in India

Article by Christian Andrei, on August 29, 2010

Last Thursday, an agreement was signed by the Renault-Nissan Alliance and Bajaj Auto that seeks to produce an ultra low-cost car to be sold in India and other emerging markets.

Renault-Nissan, along with Bajaj, plans to launch this model in 2012. This car is intended to compete directly with Tata Motors Ltd.'s Nano, the world's cheapest car.

Bajaj will handle the design, manufacturing and sourcing for the car while Renault-Nissan would be responsible for marketing in India and overseas. The US and Europe are recovering but remain unsteady.

Meanwhile, India and China have been a boon to the automotive industry due to the strong demand there. That is why global car makers have been investing in India to take advantage of this growth.

Earlier this week, Toyota Motor Corp. disclosed that it will be investing about 9 billion yen ($103 million) to make engines and transmissions for its compact car Etios in India.

Of the total passenger-car market in India, the small-car segment stands for about 70%. Maruti Suzuki, India's top carmaker that offers the Alto, Swift and Ritz hatchbacks, is undoubtedly the leader in this segment.

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