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Thread: Bajaj ULC to be 4-wheeler, not car

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    Rusted Rony's Avatar
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    Question Bajaj ULC to be 4-wheeler, not car

    By Rupesh Subhash Janve Mar 31 2011 , Mumbai

    Bajaj Auto (BAL)'s much-talked about ultra-low-cost (ULC) car being developed in partnership with Renault-Nissanbe to rival the Tata Nano may not be a car after all.

    We are developing a four-wheeler which is a concept born out of the cost structure of two- and three-wheelers rather than a car. I drove the running prototype of this vehicle this Tuesday,” said Rajiv Bajaj, managing director, BAL. He added that the $3,000 (Rs 1.34 lakh vehicle) with a mileage of around 30 km a litre would be launched in 2012. “Without these attributes it would have no position in the marketplace and would need a great effort to sell,” he said.

    BAL will make 100 per cent investment for manufacturing the four-wheeler. The earlier plan was that there would be a three-way joint venture with 50 per cent owned by Bajaj Auto, 25 per cent by Renault and 25 per cent by Nissan. Since the JV was scrapped, Bajaj will be making the complete investment for development and production of the four-wheeler.

    “Renault-Nissan will invest in marketing, sales and branding of the product,” he said at a function to announce the launch of a new Discover 125cc motorcycle with DTS-i technology. He, however, declined to disclose the total investment in the project.

    BAL is likely to manufacture the four-wheeler at its Aurangabad factory. “We will utilise the land, building and utilities of the shut scooter plant facility, which would lead to a saving of Rs 300 crore,” said Bajaj. The platform on which the four-wheeler is being built will also support three-wheelers, which will be sold by BAL.

    “We will see how many four-wheelers are required by Renault-Nissan and how many three-wheelers we need, to decide the production capacity of the plant,” Bajaj said. While BAL chairman Rahul Bajaj had earlier expressed concern whether manufacturing the four-wheeler would be remunerative enough for BAL, his son said on Thursday that he expects the four-wheeler to be as profitable as its other products.

    The four-wheeler could be used as a taxi as well as a private vehicle. BAL expects to maintain 20 per cent EBITDA (earnings before interest, tax, deduction and amortisation) in the fourth quarter ended March 31, 2011, even though it warned that commodity costs have had a severe impact.

    BAL is expecting to sell over 38.2 lakh two-wheelers and three-wheelers, including exports, in 2010-11. “We earn on an average around seven percentage points excess operating profit margin over the industry average. If the industry margins derate, so will ours. So, we can’t say the 20 per cent figure is sacrosanct. However, we do expect to retain our premium position,” he said.

    BAL also forecast sales growth of 20 per cent for fiscal 2011-12 with around 40,000 additional volume per month expected from the 125 cc DTS-i model it launched on Thursday. “We expect this model to do well particularly in north India ahead of the marriage season, and in Maharashtra ahead of Gudi Padwa,” said Bajaj.

    BAL also plans to launch a new line-up of Pulsar and Discover motorcycles in the second half of 2011-12. India’s second largest motorcycle manufacturer also plans to introduce a KTM product in the second half of calendar 2011. Meanwhile, an all-new Boxer is under development and would be launched in the second quarter of 2011-12, said S Sridhar, president – motorcycle division, BAL.

    The company is aiming to double its share of motorbikes sold from one of every ten manufactured globally to two of every ten in the next three years or so. “But rather than just volumes, we want to focus on profit share of the industry,” said Bajaj.

    The company has also started exporting Duke 125 cc bikes sold by KTM Power Sports AG in Europe. “The bikes are doing much better than expected but we have a constraint with the piston supplier for the bike,” he said. BAL plans to use KTM bikes as its entry ticket to markets like Brazil, Malaysia and Thailand where it would find it difficult to market just Pulsars and Discovers. “KTM’s role is strategic for us as it helps us make a very different impression with consumers and distributors there,” said Bajaj.

    The company has no plans to increase the production capacity from 50 lakh vehicles per year at present. “Since we will be closing the year with sales of 3.82 million units, there is no need to increase capacity. Midway in 2011-12, we will review the situation and depending on that, we would be able to add another five lakh capacity in 6-7 months,” Bajaj said.

    Source : Bajaj ULC to be 4-wheeler, not car | mydigitalfc.com
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    News approved.
    (Been There Done That) x 3.25

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    Rusted princesirohi's Avatar
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    Quote Originally Posted by Rony View Post
    By Rupesh Subhash Janve Mar 31 2011 , Mumbai

    The platform on which the four-wheeler is being built will also support three-wheelers, which will be sold by BAL.
    Source : Bajaj ULC to be 4-wheeler, not car | mydigitalfc.com
    now what does this mean, same platform for 3 and 4 wheelers. surprising.

    and if ULC is not a car, then what is it?, a bigger, 4 wheeled auto or goods carrier.?

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    looking at the market response to the Nano, they should hold off at this point, and look at goods transportation or people carrier like the magic or ace or something.


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    Title is misleading.. Rajiv was talking from a cost-structure/maintenance point of view.. doesn't mean that it's not a car or doesn't look like a car!!

    At the moment Nano is doing decent numbers.. a lot of media frenzy on fire incidents worked against Nano.. even Honda city was up in flames initially.. but nobody seems to have noticed that.
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    Quote Originally Posted by vrugonnab View Post
    Title is misleading.. Rajiv was talking from a cost-structure/maintenance point of view.. doesn't mean that it's not a car or doesn't look like a car!!

    At the moment Nano is doing decent numbers.. a lot of media frenzy on fire incidents worked against Nano.. even Honda city was up in flames initially.. but nobody seems to have noticed that.
    I think he's developing a competitor to the TATA Magic IRIS rather than the Nano.. Think of it this way., the current three wheeler configuration is quite old and not so safe for use.. If he can somehow manage to have a 3 and 4 wheeler configuration in the same chassis, the dynamics of the vehicle will change, leading to better safety.. Also, based on Mr.Rajiv Bajaj's comments about cost-structure, i think it'll be a vehicle directly in line with the IRIS..

    See the attached pic to see how the IRIS looks.. I'm sure these will be a venerable alternative for the age old RE Auto Rickshaws..
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