Reference Auto

With a slew of fire incidents last year, and with higher input costs seeing the Rs 1 lakh Tata Nano’s price shoot up to over Rs 2 lakh (for the high-end variant though), the Tata car will now have to brace for competition, with Bajaj Auto launching its first four-wheeler, the RE60, for Rs 1 lakh to Rs 1.25 lakh.

But Bajaj Auto has ruled out competition with the Nano with its managing director Rajiv Bajaj stating that the car will compete with three-wheelers.

The RE60 will be fitted with a one-cylinder 200 cc engine and deliver 35 km to a litre. It will offer a top speed of 70 km per hour.

Bajaj said, “As per our company’s marketing position, we are an anti-car company. Our customers will be the ones who use three wheelers.”

The RE60 car is priced substantially lower than the Nano and could eat into its market. While a Nano’s price begins from Rs 1.4 lakh now, the Bajaj car’s high-end variant will probably cost that much.

Bajaj has also been swift with its commercial launch plans with the company planning to roll out this revolutionary car within four to six months.

The Bajaj MD said, “Scooters were the roots of our success in the last century. Motorcycles defined our success in the current century.” Now, he expects all that to change with the RE60.

Also, Bajaj Auto hopes to grab a big chunk of the market in countries like Bangladesh, Sri Lanka and in African nations, as these developing nations will have appetite for an affordable four-wheeler.

Bajaj will keep the RE60 platform flexible, which implies that other vehicles from the Bajaj stable could be derived out of it.

The RE60 could turn out to be a hot seller, with its clever pricing, which is just double of the base variant of a motorcycle.

It would especially become popular in medium-sized (Tier II and Tier III) cities and if free of bugs (unlike the Nano), the Bajaj car could set a new benchmark in mini car sales, owing to India’s fad for inexpensive cars.

So, what can we expect from Tata Motors, makers of the Nano. A heavy discount or more freebies from Tata could counter a negative impact on Nano sales, owing to the launch of the RE60.

But one of the negatives of the RE60 is its shape with the car wearing the looks of a small commercial vehicle, which could prompt the customer to rethink before buying the new small wonder.

Also, with the engine being a 200 cc one, the comfort level could be a stumbling block (compare this with a Nano which has a 624 cc engine) even though the mileage of 35 km to a litre is awesome. But unlike the Nano, space inside the RE60 is inadequate.

So, Bajaj’s RE60 could take a large chunk of the two-wheeler market and hit the Nano’s sales unless Tata comes up with a strategy to counter the negative impact on the Nano’s numbers.