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Renault-Nissan Make Bajaj Deal Official

The JVs affordable small car will enter the Indian market in 2011, with plant capacity set at 400,000 units annually.

After months of negotiation, alliance partners Renault SA and Nissan Motor Co. Ltd. ink a joint-venture deal with India’s Bajaj Auto Ltd. to build a $2,500 small car to compete with Tata Motor Ltd.’s Nano.

Under terms of the agreement, Nissan and Renault each will hold a 25% stake in the JV, while Bajaj will have the remaining 50% share, Nissan says in a statement.

The car will be code-named ULC and built at a 400,000-unit plant to be established in Chakan, India. Sales of the model will launch in 2011 in India.

Nissan CEO Carlos Ghosn has said while the vehicle initially will be relegated to India and other developing markets, he believes such a model could have a place in the mature markets of Western Europe and North America.

“If you reinforce the car, which is basically a $3,000 car, you’re going to still end up with a very cost-competitive (vehicle),” he said last October in Tokyo of changes that would need to be made to meet emissions and safety standards in mature regions.

At that time, Ghosn said there is potentially a “big market” for vehicles priced between $3,000 and $10,000 in Western countries.

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