Nissan’s $3,000 Tata Nano rival expected to increase company’s profitability

Nissan’s upcoming $3,000 Tata Nano rival for the Indian market is expected to increase the company’s profitability as it takes advantage’s of its local partner’s, Bajaj Auto Ltd., low-cost production techniques.

Gilles Normand, Nissan’s corporate vice president in charge of Africa, the Middle East and India, said that while in talks with Bajaj, the company “discovered that their margin on three-wheeler activities is by far above our current margin on our four-wheeler activities.” He said that “the low-cost car will contribute to our growth in terms of volume and profitability.”

The subcompact vehicle, expected to debut in 2011, will go on sale in India in 2012. The $3,000 price-tag is being kept as a goal to stay competitive with the Tata Nano.

About 50 percent of the Indian four-wheel auto market consists of models priced below $8,000, Normand said.

– By: Stephen Calogera

Source: Automotive News (Subscription Required)