Nissan Building World’s Cheapest Car

Nissan to Build World’s Cheapest Car

Carlos Ghosn, the Chief Executive of the alliance Renault and Nissan (NSANY - Analyst Report), has revealed that the company will roll out a small car with its Indian partner, Bajaj Auto, that will be cheaper than any other car in India -- and in the world. The car, which is scheduled for launch in India in 2012, would beat India’s largest automaker Tata Motors’ Nano both in terms of pricing and fuel-efficiency, and become the world's cheapest car.

Presently, Tata Nano is the world's cheapest car. The car has a starting price of about Rs100,000 ($2,150). When Renault and Bajaj started discussing on their "ultra low-cost" car 2 years ago, it has been revealed that the car would have been priced between $2,500 and $3,000. However, at the World Economic Forum meeting in New Delhi, India, Mr.Ghosn announced that the ultra low-cost car would be cheaper than the Nano.

So far, India’s bottom-end motor vehicles market has been well known for motorcycles. After the hearty response to the Tata Nano, automakers around the world realized the huge market potential for small cars in India. Hence the initiative for the world's cheapest car.

Thus, the small car by Renault-Nissan and Bajaj would undoubtedly fuel competition between global automakers for the rapidly growing bottom end of the Indian motor vehicles market. The Indian auto industry markets about 2 million cars per year. Mr. Ghosn expects the number to go up to 6 million in 10 years, factoring in expectations from the ultra low-cost car.

The Renault-Nissan alliance has announced that it would provide technical support to Bajaj, who will design and produce the small car. The alliance has revealed that it is also looking forward to export the car to other emerging markets such as Africa, parts of Asia and Latin America.

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