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'We're planning a different strategy for small cars’
Bajaj Auto’s plans to get into the small car segment may have to wait a little longer. The company, which is working with French carmaker

Renault and Japanese major Nissan to develop an ultra-low-cost car (ULCC), now wants to tweak its plans to effectively compete with India’s market leader in small cars, Maruti Suzuki.

“Having learnt from our experience of trying to make a cheaper 100cc bike when someone else is actually the segment leader, I am not convinced that following the strategy of a somewhat cheaper small car when Maruti is the leader is going to yield any sustainable results. So, we are proposing a slightly different strategy, which we are discussing among ourselves, but we need a little more time to clarify,” Bajaj Auto managing director Rajiv Bajaj told ET Now.

Making it clear that Bajaj Auto is yet to fix its co-branding issues with its partners, Mr Bajaj said: “It is still a small car. It is still approximately in the space in which we have spoken earlier. It doesn’t require a different facility, a different paint shop or a different piece of land. All that remains the same. It is just that in terms of what its content will be. Will it be very car like or will it be somewhat different, is what will ultimately decide how it is positioned, how it is branded. We have to decide on that. In terms of its design and development, all that is continuing. So, there is no disruption there.”

Bajaj Auto, which is yet to sign a joint venture agreement with its partners, Renault and Nissan, says that the car project will be up and running in two years. Apart from Maruti Suzuki, which dominates the small car space in India, Bajaj Auto will also have to compete with Tata Motors’ Nano. On its plans for Austrian bike maker KTM Power Sport, where Bajaj Auto currently owns 32% stake, Rajiv Bajaj said the shareholding will increase in the days ahead. “It is our understanding that over time Bajaj has the option to increase the stake. Nothing is being planned in the immediate term or nothing has been agreed for execution in the immediate term. Our work continues to develop bikes and manufacture them out of Jharkhand, starting around the middle of next year,” he added.

Meanwhile, Bajaj Auto is shifting its focus back to the 100cc segment where Hero Honda is a clear market leader. “I would say that the Discover 100 is not a 100cc bike. It may have a 100cc engine in terms of specification. The Discover was born five years ago as a 125 cc bike and all we are doing is extending it downward so that the consumer does not see it as a 100 cc bike. He sees it as aspirational to a larger premium motorcycle, which now comes with a fuel-efficient engine,” Mr Bajaj said.

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