With its tie-up with Bajaj Auto for ultra low-cost car in a state of limbo, Japanese car major Nissan on Monday said it would look at making a $2,500 (Rs. 1.25 lakh) car under the recently-revived Datsun brand to take on the world's cheapest car, Tata Nano, on its own.
This is the first time the company has indicated that it would be willing to make such a low cost car indigenously.
Renault Nissan have an agreement with two wheeler major Bajaj for a similar car but no decision has been taken on the product the latter had showcased during the Delhi Auto Expo in January."There is a big chunk of the market where Nissan does not and cannot have any offering and Datsun would fill that gap," said Carlos Ghosn, chairman and CEO, Renault Nissan. "Yes, that will encompass ultra-low cost or $2,500 or $3,000 (Rs. 1.25-1.50 lakh) car as well. We want a car that will appeal to a motorcycle owner or a first time buyer (and) is reliable and robust."
Ghosn said the revival of the Datsun nameplate, which was the precursor to Nissan in Japan and was discontinued in 1981, was intended towards making reliable, robust, affordable and modern cars in segments where Nissan does not operate.
"In markets like India, Russia, Brazil and Indonesia, roughly 40-50% of sales are in a segment where Nissan cannot have a product," he said. "It is in those categories that Datsun will have a role to play."
As per a 2009 agreement between Renault Nissan and Bajaj Auto, the Indian automaker was supposed to design, develop and manufacture an ultra low-cost car, which the alliance would sell under its badging. The product was scheduled to hit Indian roads in 2011 but has been delayed.
Renault Nissan have yet to arrive at a decision on whether or not to go with the RE60 that Bajaj showcased in January.
"Engineering a car that costs Rs. 3 lakh or less is a very difficult proposition... I would say it is much more difficult than making a high-end luxury car," said Andy Palmer, executive vice-president, Nissan. "There is no one killer product in that segment but there would be 3-4 different opportunities. Some of those will be successful, like the 'Dost' we made with Ashok Leyland, and some would not. And there are some where we have not taken a decision yet. Bajaj falls under that category."
(The writer's travel and stay were sponsored by Ford Motor)