Rajiv Bajaj on Tata's small car

9TH AUTO EXPO 2008

A day before the much-awaited launch of Tata Motors' Rs 1 lakh car Bajaj Auto 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 scepticism 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.