Renault Nissan will launch its entry-level small car, codenamed Datsun K2, in the first half of 2014. The car, which will be showcased on July 15, is expected to be priced at around Rs 3 lakh and will compete directly with the K10 variant of Maruti Alto, India’s best-selling car, and Hyundai Eon.
The entry-level small segment, the largest in India, accounts for 21% of the car market.
The Franco-Japanese auto giant is set to invest around Rs 1,800 crore to build a second factory in India with a capacity of 200,000 units per annum to cope with the expected increase in demand.
Company executives, however, declined to share any other details of the new car.
“Our rated capacity at the Chennai factory is around 400,000 units. Once Datsun is launched we will need more capacity,” said a senior company executive. “We have enough land in Chennai to put up fresh capacity but we are also looking at other options like Gujarat. Exports will be central to our strategy in India and the Chennai port is very congested.”
A number of global car companies including Toyota, Honda, General Motors and Ford have evinced interest in the small and mini car segments in the past but have failed to come up with a suitable product. Datsun was revived by Renault Nissan last year to make frugal low-cost cars for markets like India, Indonesia and Russia.
Renault Nissan CEO Carlos Ghosn has repeatedly hinted at the possibility of Datsun making a car to compete with Nano, the world's cheapest. Company executives, however, said such a car is not on the radar as of now.