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Small cars to shift gear
Renault to hold talks with Bajaj on Monday

Mumbai, Oct. 24: Renault boss Carlos Ghosn is arriving on Monday for talks with Bajaj Auto to finalise plans for the $3000 small car that will take on a rival from the Tata stable.

The Tata small car — which has been touted as the Rs 1-lakh car though it may end up 20 per cent costlier — is due to come out sometime next year.

The Renault-Bajaj Auto model isn’t likely to come out before 2010.

Senior officials of Bajaj Auto could not be reached to confirm where the talks with Ghosn would be held.

This is Ghosn’s second visit this year: In April, he had come here for the launch of the mid-sized sedan Logan, which it makes with Mahindra and Mahindra (M&M) at a plant in Nashik. The Logan signalled the French car giant’s entry into the highly competitive Indian car market where European marques have struggled against Japanese and Korean car makers.

Ghosn indicated at the Tokyo Motor Show today that most of the features of the new small car have already been decided.

Recently, Sanjiv Bajaj, executive director of Bajaj Auto, told a news agency that the feasibility study on the small car project was likely to be ready within eight weeks.

Ghosn said though he was optimistic on developing the car jointly with Bajaj Auto, a final decision would be taken only after the feasibility study.

Bajaj Auto will be making the car, while Renault will provide the necessary support.

It is believed that the engine of the car will be displayed at the auto expo to be held in New Delhi in January. The Tatas are also expected to showcase the prototype of their small car at the event.

The Renault chief’s visit indicates just how quickly the partners are trying to get the project off the ground after confirming in July that they were exploring business opportunities to make “very competitive vehicles” in India.

Though it is not known whether Ghosn will also meet the top brass of M&M when he arrives in the country early next week, observers say the tieup with Bajaj Auto will not affect the alliance with M&M. Apart from the venture with M&M to make the no-frills Logan, Renault has a three-way partnership with M&M and Nissan to establish a plant in Tamil Nadu.

Industry experts say Bajaj Auto’s move to manufacture a small car with Renault makes sense as two-wheeler sales may be badly dented by the Tata small car.

The Tata small car will have a 600 cc engine in the boot like the Volkswagen Beetle but will be spacious enough to accommodate five people.

A couple of other players have also talked about entering the small car market. Nissan had said it would take a decision on such a car next year. Hyundai recently indicated that it would like to bring out an entry-level car with a price tag matching the Renault-Bajaj model.

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