Bajaj denies reports of scrapping low cost car JV with Renault

Bajaj Auto, a leading two wheeler maker in the Indian market which is developing an ultra low cost car for the Indian market in a joint venture with Renault and Nissan, has denied all media reports which were claiming that the company has snapped its ties with Renault in India. In a press note issued on Monday, the company has stated that the report is untrue. The partnership is intact, and the project is on, extended the statement.

A section of media reported on Tuesday that Bajaj Auto has scrapped Renault India Low-Cost Car Joint Venture for Supply Agreement. The Joint venture is developing an Indian bound low-cost fuel-efficient car that is scheduled to be rolled-out in the Indian market by the end of year 2012. Bajaj had recently stated that its prospective ultra low cost car will be offering a mileage as high as 30 km/l. The company said in a statement that it can fulfill its mutual objective through a simple original equipment manufacturer (OEM) arrangement and without the need to necessarily create a new corporate entity in the form of a joint venture.

The press note isued by the company further adds that All that the company has acknowledged, which in itself is not new, is that as per the understanding between Mr. Carlos Ghosn, President, Renault-Nissan Alliance and Mr. Rajiv Bajaj, Managing Director, Bajaj Auto in November 2009, Bajaj Auto is responsible for development/manufacture while Renault- Nissan are responsible for marketing/sales.

Its almost two years since the Bajaj Auto and Nissan-Renault have been working on their plans to develop a small car in India in the price segment of Rs 1 to 1.5 lakh. As per the MoU signed by both of the companies, Bajaj holds 50% of the JV, while, both Nissan and Renault were to hold 25% each.