Geneva: Japanese carmaker Nissan on Tuesday said it is in talks with Hinduja flagship company Ashok Leyland for developing a small car for the global market that could be priced around $4500-5000.
The company, which is also a partner in the development of an ultra low cost car with Bajaj Auto and Renault, said the project is yet to find a solution to produce such a cheap car.
“We have a formal agreement with Ashok Leyland for making light commercial vehicles in India...in addition to that we also use Ashok Leyland’s engineering services for various purposes. At the moment we are talking to them and many other partners in China, Indonesia...for a price centric vehicle,” Nissan Motor Co executive vice-president Collin Dodge told reporters at the Geneva Motor Show here.
He said the global small car is aimed at tapping the price bracket of $ 4500-5000, which is set to grow substantially and account for around “20% of the total global car sales in due course of time”.
“There may be an opportunity with Ashok Leyland on a price centric car,” Dodge added.
He said none of the big global cramakers like Volkswagen, General Motors or Ford could produce a small car at such a cheap price without partnering with local firms already engaged in low-cost production.
Asked which country will be the lead market for such a small car, Dodge said, “China will be the number one as the segment is growing in a big way there with about two million units. India will be the second market.”
Other countries like Indonesia, Vietnam, Brazil, Colombia and some more Latin American nations are also possible markets, he added.
In India, the car could be positioned between Tata Nano at the lower end and Maruti Swift at the upper end.
At present, Nissan and Ashok Leyland are partners in a light commercial vehicles joint venture. The two firms had announced three JVs in 2007 for making LCVs, powertrains and developing technology, and setting up a plant near Chennai, India, envisaging a total investment of Rs 2,300 crore.
The two companies had formed a JV — Ashok Leyland Nissan Vehicles Pvt Ltd — in which the Indian partner has 51% stake and the rest is held by Nissan, to manufacture LCVs. Ashok Leyland had earlier said it would have no joint branding with Nissan for the LCVs.
The JV, at present, is developing both trucks and buses in the 3 tonnes and 6 tonnes category.
Due to problems in land acquisition, there has been a delay in setting up the manufacturing plant and so the partners have started producing LCVs from their respective facilities and plan to launch them by 2011.
Ashok Leyland Nissan Vehicles Pvt Ltd had set an initial target to produce one lakh units and the two partners had signed an MoU with the Tamil Nadu government to set up an integrated plant at Pillaipakkam, 40 km off Chennai.