With a price tag of Rs1.1 lakh, Bajaj’s ultra low-cost car in alliance with Renault and Nissan is set to pose stiff competition to Tata Nano Ratan Tata’s dream car Nano, marked as the world’s cheapest car may soon lose the tag, thanks to the announcement made by Bajaj Auto, which aims to roll out an ultra low-cost car (ULC) worth Rs 1.1 lakh in alliance with Renault and Nissan. The launch of the ULC will mark Bajaj’s entrance in the four wheeler segment of the country. Till date the company is known for manufacturing two and three-wheeler vehicles. According to a survey conducted by Machinist360.com, a staggering 100% of the respondents feel that the Bajaj’s ULC will pose stiff competition to Tata Nano.
Competition to intensify
According to Himanshu Mittal, sales manager of Shiva Automobiles, a Bajaj auto dealer in Ludhiana, “Like Tata, Bajaj is a household name in the Indian automobile sector. Bajaj’s pan India presence and its market know-how will benefit sales of its ULC. The competition is sure to intensify once the car is launched in the Indian market.” The car was scheduled to be launched this year, but due to differences over design and pricing it got delayed. However, with all the issues being resolved, the car is slated to be launched in 2012.
 Meanwhile, questions are being raised as to whether Bajaj will be able to maintain the low price of the car due to surging input costs of raw materials such as rubber, steel, aluminium etc. In this context, Nitin Madan, managing director of Engpar Sales Pvt Ltd, a mid-sized manufacturer of automotive parts in New Delhi, “It will be interesting to note whether Bajaj is able to roll out the car at the price tag of Rs 1.1 lakh. By 2012, a majority of raw materials will become even more costly. So, maintaining the aforementioned price will be a huge challenge.”
At present, Nano comes at price points ranging between Rs 1.23 -1.72 lakh. It is to be noted that of late due to increase in prices of raw materials major auto makers have been compelled to hike prices of their products. Even tyre manufacturers of the country have raised prices of their products due to rise in prices of natural rubber in the domestic and international market.
Arup Choudhury |
