Car priced less than Maruti 800 is not saleable, says Rahul Bajaj

Rahul Bajaj, the Chairman of the company Bajaj Auto that has spread its wings in 50 countries across globe and has a reputation to create vehicles which are cost effective, said that, the small car planned to be introduced by the company should not only be priced low but also be able to generate sales volume in growing levels. He further went ahead and told in the India Economic Summit, that, a vehicle which is priced lower than Maruti 800 will not attract the customers. He also added that, his heir Rajeev will not sell a car with EBIDTA (Earning Before Interest, Depreciation and Amortization) lower than 20 per cent. Bajaj Auto is planning to venture with Renault-Nissan into a manufacturing deal to make a car which will be priced extremely low and is speculated to enter the Indian auto market in 2012.

Mr Bajaj makes a point while saying, that, this year's sales for the two and three wheelers of the company will be around four million. The company does not intend to shift its focus on selling 20,000 cars as it will not fetch higher revenues. He said, if the company is able to sell 200,000 cars every year then it is a point to deviate from the current schemes. He further went ahead and added that, all models are almost the same which are manufactured by different auto makers in India. The company does not want to be a part of the same crowd. Mr Bajaj maintaining his straight forwardness, remarked on the statement given by Environmental Minister, Jairam Ramesh, that, fuel gorging SUVs should be prohibited in the auto market. Mr Bajaj commented that, Indian customers should decide what they want as India is a democratic country and everyone has a right to put forward one's opinion. He then added on that, the subsidised diesel should be stopped for these SUVs. The SUVs should be taxed heavily or a price hike in the diesel can curb the demand.

In the beginning, of this year, Rajiv Bajaj revealed that, the price of the proposed car will be extremely low which will act as a magnet to attract the buyers. But the company will look at the engineering of the car which will decide its viability. The focus with the small car is to give an average of 25-30 Km per litre. The small car segment in India is about 70 per cent which is still showing an exceptional growth. Maruti Suzuki is currently the market czar in the small car segment wherein it sells cars such as Maruti 800, Maruti Alto, Maruti Ritz, Maruti A Star and Maruti Zen Estilo that are also its winning products. However, there are other auto players also which have a great market share in the small cars such as Tata Nano, Hyundai Santro Xing, Hyundai i10, Ford Figo. Not only this, other auto players are also planning to invest in India, the fastest growing auto market in the world after China.

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