Nissan is working on $2500 car

Nissan Motor Co, Japan's third-largest automaker, is designing a $2,500 car to compete in India with the low-cost model planned by Tata Motors, Chief Executive Officer Carlos Ghosn said.

"We are working on how we can make a car for $2,500,'' Ghosn told reporters today at a dinner in Versailles, France. A Nissan advance engineering group is doing the study," he said. Automakers are scrambling to follow in Renault SA's footsteps by offering cheaper models for fast-growing markets in Asia, the Middle East and South America. Renault, which is France's second-largest automaker and owns 44 percent of Nissan, this year rolls out its no-frills Logan sedan in Argentina, Brazil, India and Iran. Ghosn heads both Renault and Nissan. Tata, India's third-biggest carmaker, plans next year to sell a car priced at about $2,500. India's car market may triple to 3 million vehicles a year by 2015, according to government estimates.

"In India one competitor has announced a car for next year at $2,500,'' Ghosn said today. "I take that challenge very seriously.'' The Tokyo-based automaker is seeking to win business from competitors including Suzuki Motor Corp., whose Maruti Udyog Ltd. unit commands a 50 percent market share in India. " If you ask any car manufacturer if they can make money on a car that costs $2,500, the answer is always going to be no,'' Ghosn said today. ``Until somebody does it.'' Nissan said April 26 that its profit fell 46 per cent to yen 82.2 billion ($691 million) in the quarter ended March 31 on weak U.S. sales. It also postponed key performance goals by one year.