Renault, Bajaj in new tango

New Delhi, Nov. 10 -- Putting to rest all speculations about simmering differences between various partners of its three collaborations in India (Bajaj Auto (BAJAJAUTO.NS : 2101.05 0), Mahindra & Mahindra, and Ashok Leyland (ASHOKLEY.NS : 53.1 +2.05)), Renault Nissan on Tuesday said it is finally positioned to play a big role in the Indian car market from next year with the commissioning of its plant in Chennai in March 2010.

The company will be selling its ultra low cost car, being manufactured by Bajaj Auto, by 2012 and said the delay in arriving at a final decision on the project as also a year's delay in the car's launch was only "natural".

"Bajaj is an established 2- and 3-wheeler manufacturer, so for them manufacturing a car is a step up," said Carlos Ghosn, chairman and chief executive officer, Renault Nissan. "For us with our background and 10 per cent marketshare in the global car market, it was a sort of step down so naturally there were suspicions initially."

Ghosn scoffed at suggestions that with Nano already on the roads, the market would reach a level of saturation by 2012 that would hamper Renault Nissan's prospects.

"Saturation of cars in India is not a fact," he said. "My main concern is not demand but whether we have enough capacity and products to service this market. Beginning March next year, there will be a full line up of products from Renault Nissan."

Renault's only product in the market today, Logan that is being produced with Mahindra and Mahindra, has not been received well in the market and has led to speculations that the relationship is on the rocks. But Ghosn said he was looking to meet the challenge and take corrective steps.

"The sales of Logan have not met our level of expectations but we remain confident about the product and understand that corrective measures need to be taken to reposition it," he said.