Saturday, 16 July 2011

End of road for Bajaj Auto's small car?

 Bajaj Auto's ultra low-cost car plans with Renault-Nissan Alliance hit a new low as the company's MD Rajiv Bajaj termed the project "unviable" , though the company later clarified that the troubled project was on. 

Bajaj, speaking to reporters on Thursday after announcing the company's quarterly results, was quoted as saying by a news wire, "We don't intend to get into the low-margin (passenger car) business." 

He also told the news conference that from 2007 to 2009, "we had an initial plan with Renault and Nissan to develop a low-cost small car which would be like the Nano." 

But sometime in November 2009, Bajaj informed Carlos Ghosn, chief executive of both Nissan and Renault, that the minicar project was "unviable" , to which Ghosn agreed, the agency reported. However, just as the statement by the Indian partner created ripples, the company issued a clarification, saying the project was still intact. "We would like to clarify the Bajaj-Renault-Nissan project is very much on," S Ravi Kumar, Bajaj Auto's senior V-P for business development, told another news wire in an emailed statement. 

"The new four-wheeler platform, which will have commercial and passenger applications, will be showcased to Renault-Nissan in January 2012... Bajaj Auto will remain in the commercial space of the business while Renault-Nissan , if they decide to go ahead with the project , will be responsible for the personal transportation application ," he said. 

Bajaj and his executives did not respond to calls and text messages sent by TOI. A spokesperson for Renault refused to comment. 

The conflicting statements , within hours of each other, however, did not come as a surprise as the partners have been having differences right from the time they came together. Conflicting statements , and doubts, over the viability of the project have been expressed by the partners from time to time. Things came to a boil in May when Renault India chief Marc Nassif said that the French auto major might pull out of the project if the car being developed and manufactured by Bajaj did not meet the alliance's expectations. 

Nassif followed this up in June by saying that Renault could even go solo on the project as "creating new ideas is in the DNA" of the company. This probably would have prompted Bajaj to go public with his statement on the split. 

The ambitious project has been slow to take off since the very beginning. Delays, differences and constant bickering saw the partners often caught on the wrong foot in how they perceived the way forward for the development of the car. 

The troubles were very much visible after the partners never agreed to sign a joint venture despite the grandiose nature of the project. 



Bajaj does a one-up and unveils the prototype two days before the unveiling of the Tata Nano Carlos Ghosn-led Renault and Nissan join the ultra low-cost project, fix 2010 as the timeline for the model's launch 


Differences surface between the partners. Colin Dodge, the global V-P for Nissan, says it is turning out to be a "very difficult'' project Later in the year, Ghosn and Rajiv Bajaj meet on the sidelines of the World Economic Forum and try to sort out the differences. Ghosn says engineering, design and manufacturing expertise will come from Bajaj and Renault-Nissan will handle marketing and distribution 


Bajaj officials say early in the year that the partners are "aligned to the project and to the agreed objectives" and the "broad contours" had been agreed to Partners bury differences and sign an MoU 


Tired of the slow progress and rising differences, Renault sounds non-committal to the project, saying it may pull out if the car developed by Bajaj does not meet expectations Rajiv Bajaj says he has informed Ghosn that the project is "unviable"


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