Bajaj Auto has annouced its Joint Venture with Renault-Nissan to commence building another $2500 Small Car for the Indian Market.The new partnership will be 50 per cent owned by Bajaj Auto, while Renault and Nissan will acquire 25 per cent each.

Bajaj Auto had revealed its small-car plans in the Auto Expo 2008 and there were also similar reports of Nissan.

The Car has been code-named ULC(Ultra-low cost) and will directly compete with the Tata Motors Nano. The key feature of the product would be its fuel efficiency as this car could offer twice the fuel economy than the existing products in the market. It is believed that Bajaj is aiming for a mileage in the range of 35 km / litre.

According to the JV, a new production plant will be set up in Maharashtra). The production capacity of the plant would be  400,000 units per year. Sales of the ULC will begin in India in early 2011, the partners said. All three companies also intend to sell the car in other developing markets though India will be the primary market.

 

Renault has a partnership in India with Mahindra & Mahindra for the Logan. It has not partnered with M&M for the small car venture because the latter wants to be a global player in the SUV market. Nissan also has a venture with Ashok Leyland for light commercial vehicles and engines.