The proposed Bajaj-Renault partnership for an ultra low cost (ULC) car could be headed for trouble already. The two companies have ‘issues’ with the car’s design, technical specification, branding and positioning.
Last year, Bajaj and Renault had signed an MoU for the ULC car project, but the actual joint venture agreement has not been signed yet. According to reports in the media, both Bajaj and Renault still want to work together on the small car, but their aims and objectives are turning out to be dissimilar, which may put the whole project in jeopardy.
Bajaj, which currently has no cachet in the passenger cars space, is looking to develop a vehicle which other carmakers may find difficult (or even impossible?) to profitably replicate. In addition to low cost, the Pune-based two-wheeler manufacturer wants to focus on fuel-efficiency for its first car.
Renault, meanwhile, wants to go after the Tata Nano, no holds barred. It wants to develop a car that can take on the Nano in terms of pricing and value-for-money. The French company is confident that for Nano money, it can actually offer a car that’s better engineered, safer, more stylish and more refined than the Tata product. While Bajaj believes that a Nano replica – even one that’s slightly better than the original – may not work, Renault is quite gung-ho about it and wants to launch its own version of the Nano as soon as possible.
Apart from tech specs and positioning, the other major issue is that of branding. Bajaj is keen to keep the upper hand here, since the ULC car will be its first foray into the passenger cars segment. The company wants the new car to be seen as a Bajaj product, and does not want the Renault badge to overwhelm the Bajaj name.
While both Bajaj and Renault remain committed to resolving their issues over the next few weeks, their ULC car may well be delayed by 6-12 months if Bajaj insists on reengineering the package completely. There also seems to be a small chance that the alliance may not take off at all, in which case Bajaj will go on to develop the small car on its own, perhaps with technical inputs from KTM. Either way, it should be interesting to see how this story finally pans out.
[Via: indiaautomotive]
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