New Delhi/ Chennai: Renault-Nissan is pressing ahead with plans to establish its presence in every segment in India starting from ultra low-cost vehicles, including the small-car market currently dominated by Maruti Suzuki India Ltd’s Alto.

Gearing up: Ghosn at a conference in Chennai on Tuesday. Prashanth Vishwanathan/Bloomberg

Ghosn said Renault’s ultra low-cost car project with Bajaj Auto Ltd had “moved ahead". It’s also talking with Ashok Leyland Ltd about developing cars in the segment.

“I am not going to tell you what we are discussing because we have not reached any conclusion so far," Ghosn said. “We never make comments on studies or projects or programmes. I confirm the fact that Ashok Leyland is a very active part of the alliance."

Nissan, which will start production of the Micra in May from its plant at Oragadam near Chennai, will begin selling it in India from June and export the car to Europe from September.

More than half the plant’s production capacity of 200,000 vehicles will be exported, chiefly to Europe, West Asia and Africa.

The Micra’s local content is expected to peak at 85% at the end of the first year of production, according to Gilles Norman, corporate vice-president (Africa, Middle East and India) for AMIE Infiniti and LCV Business Unit at Nissan Motor Co. Ltd.

While the indigenization target may be challenging, “for the first year, we will seek to produce about 80,000 units," said Akira Sakurai, chief executive and managing director of Renault Nissan Automotive India Pvt. Ltd.

With the focus clearly on the hatchback segment, Ghosn said while Renault-Nissan would bring in premium models, they were not a priority.

“There will be more expensive cars than Logan coming to India. But for any car manufacturer, the difficult part isn’t introducing more expensive cars. The most difficult part is to make cars cheaper," Ghosn said. “We have plenty in our product line that we can bring to India. But these cars will be sold in very small volumes if we don’t localize."

Ghosn said Renault-Nissan wanted to play a role in the development of the Indian market by bringing in affordable cars.

“Our challenge today is making sure that below the Micra we can bring products which are competitive," he said. “If we don’t do that, we will be marginal in the Indian market. We cannot be a niche player in India."

Renault’s joint venture for their Logan model, with Mahindra and Mahindra Ltd, has run into problems, with Ghosn publicly expressing his disappointment at the lacklustre sales of one of Renault’s best-selling cars overseas.

Shelly Seth in Mumbai contributed to this story.