Tuesday, January 3, 2012

India’s Bajaj Enters New Market: Cars with Four-Wheels

NEW DELHI — India’s Bajaj Auto Ltd. unveiled its first four-wheeled vehicle, making a foray into the wider market from its comfort zone of two and three-wheeled vehicles.
India’s second-biggest two-wheeler maker, however, stopped short of entering the highly competitive personal passenger car segment dominated by the likes of home-grown Tata Motors, Maruti Suzuki India Ltd. and Hyundai Motor Co.
Called the RE60, Bajaj’s new hatchback will create a new public passenger vehicle or “city taxi” segment, Managing Director Rajiv Bajaj told a press conference. The company expects passengers to upgrade from three-wheelers, currently the most popular mode of personal intra-city transport in India, to the new RE60.
“About 5 million three-wheelers made by Bajaj are [currently] on the roads. We are extremely hopeful RE60 would gradually replace these,” Mr. Bajaj said, adding the vehicle also had “excellent export opportunities”. Bajaj is the biggest seller of three-wheeled passenger carriers in India.
The 200 cubic-centimeter gasoline engine-powered vehicle is expected to be ready for commercial production in the next few months.
While the company didn’t set a price, RE60 will likely be a much cheaper alternative to even the cheapest passenger cars currently used as taxis.
Mr. Bajaj said the company has developed CNG variants of the vehicle and expects to get considerable orders from local governments which run public carrier services.
The vehicle was initially conceived by the Pune-based company, in partnership with Renault S.A. and Nissan Motor Co. as a small car to compete with Tata Motors’ Nano, the cheapest car in the world. The partners had planned a joint venture with Bajaj holding a 50% stake and the rest shared by Renault and Nissan. The idea was dropped later and it was decided Bajaj would, in a non-strategic partnership, develop the car, which could be branded and marketed by its partners.
Bajaj later said the Renault-Nissan Alliance was free to walk away from the project if it isn’t satisfied with it. Renault and Nissan have separately said they are developing their own small car for India.
“The platform serves as a base to develop more products and with modifications, we are ready to sell it to Renault and Nissan if they wish,” said Mr. Bajaj, adding Renault and Nissan “continue to show interest.”
The vehicle will be made at Bajaj’s three-wheeler plant at the western city of Aurangabad. With no significant investment involved, the project will be risk-free, Mr. Bajaj said. The company expects the four-wheeler project to have an operating margin of 20%.
http://blogs.wsj.com/drivers-seat/2012/01/03/indias-bajaj-enters-new-market-cars-with-four-wheels/

No comments: