Renault will decide within the next six weeks whether to join India’s Bajaj Auto in a venture to build a small car, a senior company official has said.
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Bajaj earlier this week unveiled a concept small car and said it wants to make and sell it in India and abroad in collaboration with Renault and Nissan Motor which is 44% owned by Renault, according to Reuters.
“We are presently doing a feasibility study … We hope we will complete it in one-and-half months,” Renault’s India chief Sylvain Bilaine told the news agency at a motor show in New Delhi.
“In a month or two we will know whether we are able to go to the next step, which is full development and manufacturing.”
Reuters noted that small car sales, which make up more than two-thirds of India’s domestic market, are expected to nearly double to 2m units a year by 2010, helped by rising middle-class incomes.
Bilaine said a Renault-Nissan-Bajaj car would be totally different from the model showcased by Bajaj on Tuesday, adding that Renault was optimistic on India and would invest at least INR44bn ($US1.12bn) by 2015 in a manufacturing plant and a technology centre, both in the southern city of Chennai.
“On the technology centre we will invest EUR70m ($US103m). In manufacturing … we will be investing with Nissan INR40bn minimum,” he told Reuters.
The Chennai plant will produce 400,000 cars per year for Renault and Nissan and will employ 4,000 people by 2010, while the tech centre will aim to develop India specific models and employ 1,500 people by 2009, Reuters said, citing a statement from the automaker.
On Mahindra & Mahindra decision to defer its share of the spending in the plant, Bilaine told Reuters: “It was their business decision,” adding the foreign firms would not seek another partner and would go it alone.
The firm also aims to source INR12b of parts from India for Renault plants around the world, the report added.
