The real test has come for Tata with its Nano to offer at Rs1 lakh. But the current situation of price rise of raw materials has become a shot in the arm for Tata. This has not deprived Bajaj, a new entrant to the car market, to go ahead with its small car project (Rs1.1 lakh). The car is supposed to come from the tripartite JV among Bajaj – Nissan – Renault. The project has undergone so many hurdles to take on the road- misunderstanding among the partners on pricing and specifications. However, the tussle was solved last year and Renault-Nissan have agreed to form a consensus on the design and the price of the car.
The difficulties that Tata face presently do not seem to have made any second thought on the JV. The partners are firm in launching the car before 2012. Under the pact, the car will be known for its low cost, high mileage and low maintenance. The JV disclosed that the proposed low cost car will be designed smaller than Maruti’s Alto. The major drawback for the JV is the search for engineering solutions to draw a final product.
Bajaj is keen on countering Nano which is currently available in three variants at Rs1.23 lakh- Rs1.72 lakhs. Tata is facing hardships with regard to the suppliers and vendors who seek higher price for the materials. However, Tata is firm to deliver the first 1lakh Nanos at the initial price of Rs1lakh. There is no word about future hike in the car price nor about further bookings for the car. The same was echoed by the executive Vice-President of Nissan.