INDIA: Bajaj Auto rethinks small car strategy
Bajaj Auto's plans to get into the small car segment may be undergoing something of a rethink according to an Indian newspaper report.
The company, which is working with Renault and Nissan to develop an ultra-low-cost car (ULCC), now wants to tweak its plans to effectively compete with India's market leader in small cars, Maruti Suzuki, according to The Economic Times.
"Having learnt from our experience of trying to make a cheaper 100cc bike when someone else is actually the segment leader, I am not convinced that following the strategy of a somewhat cheaper small car when Maruti is the leader is going to yield any sustainable results. So, we are proposing a slightly different strategy, which we are discussing among ourselves, but we need a little more time to clarify," Bajaj Auto managing director Rajiv Bajaj told ET Now.
Making it clear that Bajaj Auto is yet to fix its co-branding issues with its partners, Mr Bajaj said: "It is still a small car. It is still approximately in the space in which we have spoken earlier. It doesn't require a different facility, a different paint shop or a different piece of land. All that remains the same.
"It is just that in terms of what its content will be. Will it be very car like or will it be somewhat different, is what will ultimately decide how it is positioned, how it is branded. We have to decide on that. In terms of its design and development, all that is continuing. So, there is no disruption there."
The newspaper report notes that Bajaj Auto is yet to sign a joint venture agreement with its partners, Renault and Nissan, but says that the car project will be up and running in two years.