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Home > Business > Business Headline > Report

Rajiv Bajaj speaks on Tata's small car

Surajeet Das Gupta & Suveen Sinha in New Delhi | January 10, 2008 02:48 IST

A day before the much-awaited launch of Tata Motors' [Get Quote] Rs 1 lakh car Bajaj Auto [Get Quote] boss Rajiv Bajaj raised questions about the commercial viability of the project as well as its ability to stick to the Rs 1 lakh price tag.

"My skepticism about the Tata car is not about Tata's ability to put it together but to put it together at the price of Rs 1 lakh. It is not fair to say that Rs 1 lakh is the ex-factory  price -- our two-stroke directly injected three wheeler, which is nowhere close to a car, costs close to Rs 1 lakh to the customer. I still haven't heard them (the Tatas) say it will be profitable."

Bajaj added that building a small car is not that difficult, but the key challenge is to build it so that it is profitable.

He pointed out that two-thirds of the cost of ownership of a car was maintenance and running fuel costs while one-third was the price of the car.

"The key thing, therefore, is not the price of the car but the running cost," added Bajaj.


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