Rs 1 Lakh ($2,500) Car from Renault-Nissan and Bajaj to challenge Tata Nano

Barely months after the launch of Tata's Rs. 1 lakh Nano car created a hype in Indian and global market, another Rs 1 lakh ($2,500) car is likely to hit the Indian market soon. It will challenge the Tata Nano - The People's Car. The new car will be named as ULC (ultra-low cost). It will be a joint venture product of Renault-Nissan and Bajaj. While the Tata Nano will be available in the market in October 2008, the ULC will hit the market in 2011.

The launch of the ULC was announced by Renault-Nissan and Bajaj in a joint statement. According to Rajiv Bajaj, MD, Bajaj auto, the car would cost a little above Rs 1 lakh and will have a mileage of 34 km. Sounds incredible!

The Tata Nao has an engine under the back seat. However, the ULC will have an engine in front. The ULC will be manufactured in Bajaj's new plant in Chakan. The plant will have an initial capacity of 4 lakh vehicles per year. The Tata Nano plant in Singur has a capacity of 2.5 lakh units per year. Bajaj will have a 50 percent stake in the joint venture for the ULC project. Both Renault and Nissan will have 25 percent stakes each.