Nissan-Renault chief Ghosn says cheap car is still coming

Posted by: Ian Rowley on November 9, 2009

There are some interesting comments by Nissan and Renault chief Carlos Ghosn today in an article in India’s Economic Times. In the piece, Ghosn reaffirms Nissan and Renault’s commitment to a partnership with Bajaj Auto, an Indian two-wheeler maker. The three said last year that they would introduce a rival to the $2,500 Tata Nano low-cost car, but after an initial blaze of publicity, news on the car’s progress has been scant. The Economic Times reports that Ghosn reckons the project is still relevant and on track for a 2011 launch. “We have to bring in the car with basic features [and] basic functionality at a very affordable price,” the CEO, in New Delhi for the India Economic Summit, is reported as saying.

That should go some way to assuage concerns that companies planning rivals to the Tata car are wavering. Two Bajaj executives, speaking on the condition of anonymity, told BusinessWeek recently that the company is finding it difficult to persuade suppliers to do the kind of aggressive research and development required to push down prices without a clear guarantee that it would produce a sizable number of cars, especially without an approved final design. Meanwhile, Nissan’s executive vice-president for Africa, the Middle East, and Europe, Colin Dodge, told me at last month’s Tokyo Motor Show that Nissan’s input in the car is now minimal. “The project itself is very difficult,” Dodge said. “Doing this car for around $2,500 and getting motorbike drivers to jump into four-wheel vehicles [is] very challenging…[but] the car is coming along.”

Ghosn’s comments suggest that, despite his leadership in the global push for electric vehicles, there is plenty of life in the project with Bajaj. Still, a few important questions remain. One is how many of the cheap vehicles will be built. In the original press release, Nissan said the car would be built at a plant in Chakan, Maharashtra, with an initial capacity of 400,000. As of October, Tata had only delivered 7,500 Nanos. Another is the price, especially if the Nissan-Renault-Bajaj car is sold outside of India. The Economic Times reports that Ghosn isn’t sure if it will retail for $2,500 or $2,800 or $3,000. And, just as important for all involved, can they make any money selling such a cheap car?

Reader Comments

Pepx

November 9, 2009 10:05 PM

The main issue about such cheap car in masive markets with a lots of poor population is the potential appeal for the future company loyalty, profits might be razor-thin, but in a country like India, with a rapid growing economy, catching the imagination of millions with constantly increasing incomes, adn get them in touch with Nissan product (and reliability) it's probably the best way to get a long term bigger market and profits, just let see what VOlkswagen did with his beattle in Germany since the 40's cementing the company image with future generations, and as people grew richer they began to purchase more expensive models from the same company.

rsa

November 10, 2009 10:58 AM

Mostly cut-and-paste from past articles. BW, please write something new.

Smart Cars

April 14, 2010 9:25 AM

The main issue about such cheap car in masive markets with a lots of poor population is the potential appeal for the future company loyalty, profits might be razor-thin, but in a country like India, with a rapid growing economy, catching the imagination of millions with constantly increasing incomes, adn get them in touch with Nissan product (and reliability) it's probably the best way to get a long term bigger market and profits, just let see what VOlkswagen did with his beattle in Germany since the 40's cementing the company image with future generations, and as people grew richer they began to purchase more expensive models from the same companyRobbin

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Bloomberg Businessweek’s team of Asia reporters brings you the latest insights on business, politics, technology and culture from some of the world’s biggest and fastest-growing economies.

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