According to Nissan CEO Carlos Ghosn, Nissan plans to launch a small car with a price tag of just under $3000. He said that if a manufacturer wants to be serious in India, then the price should not cross the $3000 mark. Nissan will now be in competition to the bottom prices with the likes of Indian automobile maker Tata Motors. Next year, Tata Motors is planning to bring in a car that will sell for as low as Rs.100, 000 ($2,300) which will make it India's and perhaps world's cheapest car.

 

According to a report, small cars account for about three-quarters of the total automobile sales in India, which is also Asia's fourth largest automobile market. Presently, the cheapest car in India is the Maruti 800 which sells for about $4,500. Japan's Suzuki Motors controls Maruti, which has about 50% of the Indian car market.

 

The CEO of Nissan who is also the CEO of Renault was in India last week to launch a factory that will produce the Renault Logan, which is incidentally Renault's economy car which it developed for the Eastern Europe and the other developing regions. Nissan is not doing well and it had even announced back in February that it would not be able to meet its target for this financial year.

 

Mahindra and Renault, which entered into a partnership, have a facility in Nashik which has a capacity of about 50,000 vehicles per year. The base model of Logan which is powered by a petrol engine cost about $9,700 while the diesel variant costs $12,400. Mahindra Renault and Nissan are investing huge sums of money to build a production plant in Chennai. This plant will have a capacity of 400,000 vehicles per year and will be functional by the second half of 2009.