Japanese auto maker Nissan is yet to decide on its partnership with Bajaj Auto for sourcing of ultra- low cost car as it is reviewing priorities in the entry-level small car segment in India.
“We have not yet made a definitive decision on the partnership with Bajaj. However, we are aware of the difficulties faced in sales of competitor cars at the lower price points, where basic customer car needs may not be fully met,” Nissan Motor India Managing Director and CEO Takayuki Ishida said.
“We are therefore in a full review of priorities — segment by segment and market by market — in the price entry zones, and will make our final decision as part of our annual product plan usually closed in January,” Ishida added.
As per an agreement reached between Renault-Nissan and Bajaj Auto in 2009, the Indian automaker was supposed to design, develop and manufacture the product, which was intended as an ultra low cost car, while the alliance would sell it under their badging.
Bajaj Auto had unveiled the RE60, a mini-four wheeler meant for urban transportation to replace three-wheelers at the Auto Expo in New Delhi in January this year.
At the time of unveiling the RE60, Bajaj Auto Managing Director Rajiv Bajaj had said it would be up to Renault-Nissan whether to source it or not after seeing the product.
Bajaj had, however, refused to call the RE60 that is a powered by a 200 cc rear mounted petrol engine with a top speed of 70 kmph, as a car saying it was a commercial vehicle meant for passenger transportation.
In January 2008, Bajaj Auto had unveiled its concept passenger car with an expected price of $3,000. It had partnered with Renault-Nissan for the ultra low cost (ULC) car project. The ULC was first scheduled to hit the roads in India in 2011, but was delayed due to differences between the partners on pricing and design. While Renault-Nissan wanted to price the car at around $2,500, Bajaj insisted on lowering the overall cost of ownership.
In 2010, Renault-Nissan announced the signing of a memorandum of understanding with Bajaj Auto to take forward their ULC car project. Since then, Bajaj Auto had gone on to develop the RE60 but it remained uncertain if Renault-Nissan would source the product to sell in India and similar global markets and their partnership has not flourished. Ishida said the company is pursuing several “price entry” segments in India, Indonesia, China and Russia. “So far we have launched our first one, the ‘Dost’ and we are actively developing others as Nissan, and in partnership with Renault and Ashok Leyland,” Ishida said.
A decade after it generated some controversy with carmakers ranged against three-wheelers manufacturers, the government has approved a new segment in the automotive space called the Quadricycle. The basic concept is a four-wheel vehicle with a small engine to be positioned between a three-wheeler and a passenger car which does not meet the same safety and emission norms of regular passenger cars and have their own set of regulations.
The Ministry of Roads has formed a technical committee to examine all aspects including safety norms which would then enable the government to announce a policy. So far, only Europe has a quadricycle segment with the Renault Twizy being one example.
One clear beneficiary of such a policy in India would be Bajaj Auto’s RE60 four-wheeler unveiled at the Auto Expo in January. However, this segment will certainly also interest Piaggio, Mahindra & Mahindra as well as TVS, which was an early proponent, given its potential to be a mass segment.
Interestingly, Tata Motors initially conceived the Nano as a quadricycle but this was met with huge resistance within the industry which stonewalled the formation of a quadricycle category. This led Tata to develop the Nano as a full car. Now, it seems that companies like Bajaj Auto are asking for the same concessions.
Bajaj will be launching the new RE three-wheeled goods carriers soon. It has been spotted testing in Pune. Previously Bajaj was the only one who ruled the 3-wheeler market but now the scenario has changed that TVS has been giving Bajaj a hard time since it entered the segment. TVS has already showcased their king which looks extremely modern and stylish and has many features which can attract anybody. So Bajaj has showcased the RE 60 to the media couple of months back.
The exact price has not been revealed yet but it will cost anywhere between Rs. 125,000 and Rs. 200,000 lakhs respectively. Bajaj has earlier displayed a small car in the year 2008 but later backed out of the whole idea since Renault and Nissan recently were out from the project. The reason behind the success of TVS king was that it was priced much lesser than the Bajaj 3-wheeler and also had new design which was more spacious and effective. So Bajaj needed a comeback and that’s what they have done this time. The new Re 60 is a safe, Convenient and economical commercial vehicle. It is not a car it is a 4 wheeler that is what Rajiv Bajaj said while he addressed the media.
The Bajaj Re 60 will be built at Bajaj Auto’s Aurangabad plant, and the launch will take place very soon. The Re 60 will deliver close to 40kmpl and emit only 60g/km of CO2 that will make it one of the most fuel efficient and green vehicles in the market. The RE 60 will soon replace all the Bajaj Auto rickshaw’s in the market and thus it will be more safer and convenient mode of transport.
The RE 60 will be powered by a 200cc water-cooled, fuel-injected DTSi engine that will put out roughly 20 PS of power but the weight of the vehicle is superlight and thus it will be capable enough to fulfill all the requirements.
Delays make Bajaj to look at Africa, L America for RE 60
Bajaj Auto will launch its ultra-low-cost four wheeler or quadricycle RE 60 by April first in Sri Lanka and Bangladesh than in India, Rajiv Bajaj, managing director of the company said.
Bajaj is waiting permission of the Indian government to sell the vehicle designed as a new category in the country. The quadricycle, showcased at the New Delhi Auto Expo in January, is expected to compete with Tata Motors Nano on price and create a new segment of vehicles. French carmaker Renault, keen on a cheap car for emerging markets and supporting the RE 60 initiative, is yet to finalise its partnership in the venture
The government is yet to frame a policy for quadricycle that would allow companies to make these four wheelers, popular as recreational vehicles in the West. A panel led by International Centre for Automotive Technology Dinesh Tyagi is formulating the policy.
The Economic Times said that besides Bajaj, M&M, Piaggio and Eicher are taking a closer look at making these vehicles either as people carriers or transportation vehicles, or both.
“We are holding various meetings with central government officials. We will shortly go for pilot production. Whether it will take the government three months or three years to give permission is anybody's guess. But we are de-risking. I cannot allow administrative failure to become a business defect,” Bajaj said in an interview to Business Standard.
“We are preparing for international markets like Sri Lanka, Bangladesh, Africa, Egypt and Latin America. As a manufacturer, I can only innovate; if it benefits other markets before India, it will be unfortunate. We should be able to launch the product in four-five months. We will start with a manufacturing capacity of 200 RE 60s per day, or 5,000 units a month”
With the government forming a committee to look into the proposal to form a new vehicles segment — quadricycles — that holds the potential to change the dynamics of low-cost city travel, auto companies are at loggerheads over the project.
Rajiv Bajaj, managing director of Bajaj Auto told Business Standard in a exclusive interview: “The committee, to my understanding, has been told that essentially we have to introduce quadricycles in India. But some car makers, especially of cheap cars, have been strongly resisting this idea.”
Bajaj Auto’s RE60, an ultra low-cost four-wheeler which it showcased at this year's Auto Expo in New Delhi, is the vehicle which could be recognised as a ‘quadricycle’ if the existing European regulation for the vehicle are applied in India, too.
"Initially, all manufacturers were unsure, but now I believe that many manufacturers like Mahindra, Eicher and Piaggio have come to acknowledge that there is a market for such a vehicle in India. But those who are predominantly cheap car makers are opposing the idea on the grounds that a quadricycle is unsafe compared to a car,” said Bajaj.
A quadricycle is a light four-wheeler used personally as well as commercially. With specifications quite different from a modern day car, a quadricycle is an improved substitute for a three-wheeler, but substantially cheaper than a car.
For instance, like a three-wheeler passenger vehicle, the quadricycle has no doors and the maximum speed is 70 km per hour, according to European regulations. Although its Europe market is small, Indian manufacturers are pushing for its introduction here.
Presently, the government has appointed a committee to look into the feasibility of introducing such vehicles in India under the aegis of Ministry of Surface Transport. The National Automotive Testing and R&D Infrastructure Project, headed by Nitin Gokarn, former joint secretary in the road transport and highways ministry, has been asked to submit a report on the proposal.
Ravi Chopra, chairman and managing director of Piaggio Vehicles, said, “We will see what emerges, like emission norms and other requirements then there will be a level playing field. The government cannot say that from tomorrow there will be quadricycles; there has to be a time period.”
Today, a passenger three-wheeler costs about Rs 150,000, and a passenger four-wheeler costs about Rs 210,000; the price of a quadricycle would be somewhere in between, if it gets approved. Tata Nano, which is a full-fledged car, costs Rs 155,000 (ex-showroom, Mumbai).
Since a quadricycle is only an improvement over a three wheeler, manufacturers say that crash tests, which are mandatory for cars, are not required for it as most of the drive would be within the city. According to Bajaj and NATRiP executives, some manufacturers are raising the issue of the quadricycle being unsafe.
“My fundamental contention is that a quadricycle cannot be compared to a car. One should carefully consider that the quadricycle itself is a separate segment, which offers two-wheeler and three-wheeler intenders the opportunity to upgrade to something that is safer. When our industry revels in sales of a million two wheelers and 40,000 three wheelers each month, but balks at the prospect of quadricycles being sold, the logic beats me,” added Bajaj.
“First and foremost, the quadricycle gives out about half the emission, which a small car gives out. That is why we have called the vehicle the RE60 because it gives out emission of only 60g CO2/km, whereas a typical small car today gives out 120g CO2/km. Secondly a small car will provide a mileage of 18-20kms/litre, while the quadricycle will give a mileage of 35km/litre. So, there is a perceptible advantage of the quadricycle over the car,” said Bajaj.
According to a senior Piaggio executive, the auto industry is divided over the issue with one group saying we should follow the EU norms and the other insisting we should have a set of new rules for the segment, entailing enormous amount of time.
“The same industry that complains of an apparent policy paralysis in government now wants government to push back on a quadricycle policy. How can policy come first and the product later? Does policy shape innovation or does innovation shape policy? Is it that a babu sitting in Delhi would make a smart policy, which would then lead to innovation or is it the entrepreneur who comes up with innovation and that guides a well-meaning administrator to shape policy? I believe that at first it is innovation that comes from the entrepreneur be it of a Walkman or an iPhone,” said Bajaj.
According to an NATRiP source, it will take at least one year for the report to be submitted. “If a four-wheeler has to go through a crash test, then there should be a crash test on ‘quadricycles’ also. Various companies are preparing their concepts. Separate rules have to be prepared for quadricycles as existing rules for cars cannot be applied.”
The NATRiP report, once cleared by the Ministry of Surface Transport, should also be cleared by the law ministry and the Ministry of Environment and Forests.
Govt approves Quadricycles; Bajaj RE60 to enter production very soon
The Government of India has finally approved a new type of four-wheelers today, the Quadricycle. As you may have read previously, the Government and the auto industry were divided over the creation of Quadricycles with some manufacturers and CEO’s taking stands against it.
The move comes after a meeting under the chairmanship of Road Secretary, Mr. Vijay Chhibber.
So how does one identify a Quadricycle plying on the road? An identification symbol ‘Q’ will be displayed on the Quadricycles, just like how trailer buses and lorries carry the ‘T’ symbol.
Quadricycles will have to be commercially registered as the Govt. has not approved private ownership yet. The driver has to have a specific license to be legally eligible to use it.
Quadricycles will be permitted to run on intra-city roads within municipal limits (city and rural roads).
“A separate category has been proposed for notification to include quadricyle with specifications adopting present norms notified in the 3-wheeler category of the Central Motor Vehicles Rules (CMVR) or the European Union quadricycle, whichever is more stringent,” a Road Ministry statement said.
The statement goes further to say that the Quadricycles will be considered as a step up from the three-wheelers.
Mr. Rajiv Bajaj, Managing Director of Bajaj Auto, says that the production of the RE60 will commence “very soon”.
When asked if the ‘commercial only’ tag of the RE60 was a half-victory of sorts, Mr. Bajaj said that eventually a four-wheeler would have to be permitted to be owned and driven in a manner similar to the two and three-wheelers.
Bajaj Auto may launch RE60 Quadricycle by the fiscal end
Bajaj RE60, which was waiting for the government clearance. Few days back, the government of India has allowed quadricycles to run on roads as public transport within city limits. Now, the rumors are on rife that Bajaj will launch the RE60 by the end of this fiscal year. Earlier, it was stated that Bajaj RE60 will hit Indian shores by the festive season (Diwali and Dushera), which is the best time to launch a new product in the country. But, due to delay in government clearance, the plans of launching quadricycle has postponed to later date.
After getting the clearance, we could soon see RE60 running on streets, overtaking the three wheelers. Quadricycles are more safer than the 3-wheelers, as it sports a fully covered body structure with hard top and doors. Bajaj RE60 looks like a car, but the maximum speed limit and engine capacity are lower. It is expected that the Bajaj RE60 could be priced around Rs. 1 lakh, which would emerge as an unmatchable product and would effect the sales of autorickshaw by a huge margin.
Showcased a day before 2012 Auto Expo, the Bajaj RE60 has been spotted couple of times on the Indian roads during its test rounds. The RE60 will derive power from a 200cc, single cylinder, liquid cooled engine that is capable of developing 20bhp and delivering a fuel economy of 35kmpl, which will be the USP of Bajaj RE60. The top speed of the RE60 has a top speed of 70kmph. It is also claimed to produce the minimum amount of emission which stand at 60 grams of CO2 for every kilometer. The company might also launch the CNG version of RE60 as time progresses.