Indian Autos blog

How does a company ensure that its cars don’t catch a “cheap car” stigma when they want it to ply segments that are mainly for first time car buyers and have a small framework?

In today’s Bumper To Bumper video, this is my discussion. I’ve provided a couple of ideas, and I’d love to know your thoughts on this topic.

Back in 2009, Renault-Nissan entered into a partnership with Bajaj to bring out a Tata Nano rival. The idea was that Bajaj would develop a low cost car and Renault Nissan would sell it under their umbrella. Many speculations and rumors later, it seems that Renault-Nissan is not happy with the RE60 and the partnership is tottering on the edge.

The Bajaj RE60 was showcased just a day before the 2012 Auto Expo. It is powered by a 200cc rear mounted engine with a top speed of 70 kmph and a fuel economy of 35 kmpl. Rajiv Bajaj clearly demarcated that the RE60 was not a car but rather a three wheeler with an extra wheel.

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Come Jan 3^rd 2012, Bajaj would be hoping to recreate the magic Tata Motors created at the launch of the Nano a few years back. For the first time in 8 decades, Bajaj will present a car for the Indian masses. Very popular for its two wheelers, three wheelers and commercial vehicles, Bajaj has never had a single contender in the passenger car market. However, with the dawn of new year, the company will create history by introducing the ULC christened ‘RE60’.

Our pals BSMotoring have presented us a small pic which they claim is the actual model. The model presented in the picture sort of looks like the Reva (a.k.a G-Wiz). The RE60 is may look like a car but Bajaj Auto claims that it isn’t one. The company has made it quite clear that it doesn’t intend to build another Tata Nano. According to Bajaj, the RE60 will be perfect, low-cost transportation solution; a three wheeler with one extra wheel for stability. We have no idea how to make sense of it all. Seeing the vehicle on the 3rd is the only way to understand Bajaj’s proposition.

Anyways, coming back to the RE60. The ‘RE’ stands for ‘Rear Engined’ and the 60 stands for the 60 g/km of CO2 that the car produces. The RE60 will be powered by a 700-800 cc engine with priority given to fuel economy. The estimated figure is around 30 kmpl.

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A report on India Today has provided some important details on production version of the Bajaj Lite/ULC, a passenger vehicle that will be unveiled before the Auto Expo. In media interviews, Bajaj officials have stated that their vehicle is not a car though the flexible platform allow it to be dressed as a car.

Development of the four-wheeler is complete. It is powered by a 800cc petrol engine (Nano is powered by a 624cc two-cylinder mill) capable of returning close to 30kpl. The report states it will be more spacious than the Nano.

The Tata Magic Iris and the Piaggio NT3 concept are good examples of low-cost four-wheelers

The ULC is similar to the Volkswagen Up! – its a platform to spawn a family of vehicles. The ULC’s foundation can be used to roll out a set of commercial vehicles. Even the next generation Bajaj RE Auto Rickshaw three-wheeler could be bodied on the flexible ULC platform.

Renault and Nissan have shied away from questions on the future of the Bajaj-Nissan-Renault partnership. The ULC does not feature on the Renault’s list of five cars by late 2012. The initial agreement was that Bajaj will handle the design and manufacturing, and Renault/Nissan would market it.

On the sidelines of the Quarter 1 results announcement in Pune today morning, Rajiv Bajaj, MD of Bajaj Auto told reporters that the much-hyped ULC-based four-wheeler will be an exhibit at the Auto Expo in Delhi next January.

Bajaj said the low-cost four-wheeler will be manufactured at the Aurangabad facility, the site once used to roll out geared scooters. The project cost for this 4-wheeler will be approximately Rs 200 crore including the plant. It has to be noted that the project cost is one-tenth what Bajaj would spend on a new vehicle project. The production lines will be designed to produce three-wheelers alongside the four-wheeler. Both these vehicles are likely to be stationed on the ULC platform.

In an interview with NDTV Profit recently, Bajaj said the ULC could be dressed up as a car. But Bajaj has no intentions of producing a car and neither will it get into the goods carrier space with the four-wheeler. It will be designed to move people over short distances. One can imagine a modern Autorickshaw mounted on four wheels at the corners with a design flavor of the Tata Magic Iris to form an imagery.

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Bajaj will bring out a load carrier on the ULC platform next year, Financial Chronicle has reported. Quoting the chairman of Bajaj Auto Limited, it adds Bajaj will sell the load carrier variant while Renault’s car will be off the same platform. IAB is told that Renault hasn’t seen or tested the ULC prototypes that have neared completion. They will give the go-ahead only if they are satisfied with every aspect of the product. Bajaj Auto MD Rajiv Bajaj has repeatedly said that the ULC is a “four wheeler” and not a “car”.

Renault officials could inspect the ULC by year-end and take a call. If they feel the need for further improvements, the launch date could be pushed forward.

Based on the inputs from company officials, our in-house image envisioner Shoeb R Kalania presented a rendering of the Bajaj ULC passenger model. He used design idioms and the thought process behind the Chetak scooter, the Renault Twizy and the Bajaj RE 3-wheeler.

Fast fact – Shoeb’ rendering has raised a few eyebrows in Renault India’ camp.

I have driven the prototype of this vehicle. Ours is a four-wheeler, not a car; it’s too soon for any details on price and volumes.

Rajiv Bajaj, MD of Bajaj Auto tells India Knowledge@Wharton in an interview last week. Rajiv Bajaj has stated before that his company’ ULC project will be a four wheeler which could be used to build commercial vehicles if in case Renault doesn’t find the prototype satisfactory. The engine is expected to deliver 30kmpl.

We scratched our heads when Rajiv Bajaj said “I am repeatedly telling you that we are developing a four-wheeler (ultra low-cost car) and not a car. There is a lot of difference between a four-wheeler and a car. The four-wheeler is under development stage and is likely to hit the market by 2012.”

Shoeb R Kalania wasted no time in getting back to his computer and did up a 4-wheeler bringing together the DNA of an autorickshaw, small city car and a scooter. Bajaj’s first attempt at a mass-market product was the Chetak which moved millions from A-B, so the knowledge gathered from that historic product will be of much use on the 4-wheeler.

We assume plenty of simple components will be carried over from the 3-wheeler division. We expect the ULC to have the dimensions and layout of a Tata Nano with a tiny turning radius.

Bajaj begins production of the ULC next year in Aurangabad where it previously manufactured scooters. The same facility will also roll out three wheelers. Both personal and commercial applications of the platform will be explored.