Renault-Nissan has finally formalised their deal with Bajaj Auto to manufacture ultra-low cost car in India, which will hit the market in 2012. “While Bajaj will be responsible for design, engineering, sourcing and manufacturing of the small car, its marketing and selling will be done by Renault-Nissan alliance,” Renault Chairman and CEO Carlos Ghosn said at the India Economic Summit here on Tuesday.

On the car’s pricing, Mr. Ghosn said: “It is too early to say about price of the car, but its (overall running) cost will be lower than the cost of any other new car made in India today. It is not sufficient to launch the car on a low price only, but it also needs fuel efficiency. It will be a competitive product and very affordable.”

Stating that it would an innovative product, Mr. Ghosn further said the ultra-low cost car would be exclusively manufactured in India and for the Indian market, but later it could be exported to other nations, particularly emerging markets.

The brand under which the car will be sold would be decided later by Renault-Nissan alliance, but there would be no Bajaj name on it, he added.

Initially, the car was scheduled for 2011 launch, but differences between the partners in terms of pricing and design led to the delay and Renault had said that the price would be around $2500.

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