Not just cost-effective, small car must sell well: Rahul Bajaj

Not just cost-effective, small car must sell well: Rahul Bajaj

New Delhi: Bajaj Auto chairman Rahul Bajaj on Sunday said the company’s proposed small car will not only have to be cost-effective, but should also sell in large volumes to be a feasible proposition.

“A car at a cost of less than Maruti 800 is not going to work... My son Rajeev may not like to sell a car with EBIDTA less than 20%," Bajaj told reporters at the India Economic Summit here.

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At present, the Maruti 800 is priced between Rs1.9 lakh and Rs2.32 lakh (ex-showroom Delhi).

Bajaj Auto had entered into a contract manufacturing deal with Renault-Nissan to produce an ultra-low-cost car, expected to hit the market by 2012.

“This year, we are going to sell four million two wheeler-three wheelers together. So why should we focus only to sell 20,000 units of a car. It doesn’t make sense. Unless we can sell about 200,000 units per year, it will not be feasible," Bajaj said.

He said there are so many models made by different manufacturers available in India. “Why should we bring out one additional car?," he asked.

Commenting on environment minister Jairam Ramesh’s statement that fuel-guzzling SUVs should be banned, Bajaj said India is a democracy and it should left to customers to decide.

“However, let subsidised diesel for these SUVs be stopped. Either you have a dual pricing for diesel or tax those SUVs heavily," he said.