Bajaj to manufacture commercial vehicles at its small car plant

India’s second-largest motorcycle maker Bajaj Auto Ltd plans to manufacture commercial vehicles as well on a new platform it is developing in Waluj, Maharashtra, for its small car project, said two people familiar with the development.

“Bajaj Auto Ltd intends to develop a multidimensional platform through which it can manufacture commercial vehicles and passenger cars,” said an industry expert, requesting anonymity.

A Bajaj Auto executive confirmed the plan.

“What we are trying to do is to develop a four-wheeler platform, and then we will see what else can we get out of the new platform,” said the executive, who also did not want to be named.

A company spokesperson declined comment.

The Waluj plant is being set up at a cost of Rs.500 crore, the company has earlier stated.

Of this, Rs.225-250 crore has been earmarked for investment in the current fiscal, said the expert cited above.

India’s largest two-wheeler manufacturer had announced plans to launch a small car this year that will rival the Nano, the world’s cheapest car built by Tata Motors Ltd. The launch was later deferred to 2012.

Bajaj Auto is developing the small car project in partnership with Renault SA and Nissan Motor Co. Ltd. While Bajaj Auto will handle design, engineering, sourcing and manufacturing, Renault-Nissan will take care of marketing and sales.

The alliance wants to sell the car for $2,500, or Rs.1.10 lakh, compared with the Nano’s ex-showrom price of around Rs.1.5 lakh in Mumbai.

Bajaj Auto has also said it hopes to make the car engine twice as fuel efficient as the best available in the market.

Small cars in India have an average fuel efficiency of 17km per litre. Bajaj wants to lift that to around 30km per litre.

Nano’s fuel efficiency is 23.6km per litre, according to Automotive Research Association of India.