Renault takes on the Tata Nano

Renault-Nissan has confirmed that it will build a cheap small car for the Indian market.

The vehicle, built in conjunction with Bajaj Auto, will challenge the Tata Nano, currently the world's cheapest car.

Bajaj Auto will design and build the car, while Renault-Nissan will be responsible for marketing it in India.

World's cheapest car?
Renault's chief executive officer, Carlos Ghosn, said yesterday: 'I can tell you that the cost of this car would be lower than that of any car currently made in India.'

He would not confirm the price, but has suggested the entry point would be around $3000 (1800). Ghosn also said he wants the car to be the most competitive in terms of running costs.

A long time coming
Renault-Nissan and Bajaj Auto first announced their joint venture in 2008. The car was originally due to be launched in 2011, but has reportedly hit several stumbling blocks and the car has now been delayed until 2012.

'We have a clear strategy now and a clear definition of who does what,' Ghosn said yesterday. 'From time to time, we will face challenges with our partners, and this is normal.'

A growing market
Renault currently has less than 1% market share in India, a situation Ghosn says he 'can't accept'.

In 2008/2009, 1.55 million passenger vehicles were sold in India, and Ghosn expects this to rise to two million this year, and to triple in the next decade.

Sales of two- and three-wheeled vehicles are in decline as more Indians move into cars.