France’s Renault and Japan’s Nissan will sign a formal agreement next month for making their proposed small car in India, scheduled to be launched by 2011. According to sources close to the development, the yet-to-be-named ultra low-cost car — said to challenge the Tata Nano — would have most of the features of the concept car that was displayed at the Auto Expo in January and would be priced at $2,500 (slightly more than Rs 1 lakh), even in 2011.

On Monday, the three companies announced their intention to “develop, produce and market” the $2,500 car. Bajaj Auto managing director Rajiv Bajaj, Renault president and CEO Carlos Ghosn and Nissan said the JV will develop and market the car “at a wholesale price range starting from $2,500.” Bajaj will own 50% in the JV, while the rest would equally be held by Renault and Nissan.

The $2,500 tag will be ex-factory price, including excise and other levies, but excluding VAT, octroi, sales tax and local municipal tax. “The announced price will be effective till the car is actually launched in the market,” said Nissan spokesperson Simon Sproule. “The price has been decided keeping in view of the future changes in pricing of car material and other inputs. It will not include any of the taxes and costs outside the manufacturing plant that will be borne by the customers.”

According to sources, the car will be manufactured at a plant to be built at Chakan near Pune. Here, Bajaj owns 250 acres of land, close to its motorcycle plant.

Popularity: 1% [?]