Mumbai: Bajaj Auto Ltd on Friday said its project to develop four wheelers for Nissan Motor Co and its alliance partner Renault SA was on track after a newspaper said it had been called off, citing a top executive.
Earlier on Friday, the Wall Street Journal reported that Bajaj had shelved the project to develop a low-cost minicar in India for Renault-Nissan, saying it was commercially unviable, citing managing director Rajiv Bajaj.
“We would like to clarify that the Bajaj-Renault-Nissan project is very much on,” S Ravi Kumar, Bajaj Auto’s senior vice-president for business development, said in an e-mailed statement to Reuters.
“The new four wheeler platform, which will have both commercial and passenger applications, will be showcased to Renault-Nissan, in January 2012,” he added.
The Renault-Nissan alliance signed a memorandum of understanding (MoU) last year with India’s No.2 two-wheeler maker to develop an ultra low-cost car for India and other emerging markets and had planned to launch it in 2012.
The car was expected to compete with Tata Motors’ Nano, the world’s cheapest car.
The design, manufacturing and sourcing for the car was to be done by Bajaj, and Renault-Nissan would handle marketing in India and overseas, according to the agreement between the companies.
“Bajaj Auto will remain in the commercial space of the business while Renault-Nissan, if they decide to go ahead with the project, will be responsible for the personal transportation application,” Kumar said.
It added that Bajaj had expressed concern on the viability of the project to Renault and Nissan head Carlos Ghosn in November 2009, but the venture partners had then agreed to rework the project toward a four-wheeler on a new platform.
Nissan spokesman Simon Sproule said that the partners face milestones in making decisions for the project in the next few weeks, but the company had no immediate announcement to make.
Renault could not be reached for comment.
Bajaj Auto shares closed down 0.6% in a weak Mumbai market.