Now, Bajaj plans a low-cost car

Facing the heat over the prospect of Tatas' Rs 1 lakh car affecting the two-wheeler market, Bajaj Auto on Monday said it may build cars to ward off the threat.

"The JD power study says that it (Tata's Rs 1 lakh car) will affect the two-wheeler market. If that happens then we would also manufacture cars for the market," Rahul Bajaj, chairman, Bajaj Auto said.

International consultancy firm JD Power said early this week the 'people's car' from Tatas that will come out on the roads in 2008 could create a major dent in top-end motorcycle sales with its lucrative price tag, provided the corporate house gets the product right in the first shot.

Bajaj's statement is the first confirmation that the country's top three-wheeler and second-largest motorcycle maker was interested in developing a low-cost car.

The company had earlier announced it was developing a four-wheeler goods carrier scheduled for launch in 2009.

Although Bajaj Auto is the second-largest motorcycle maker in the country after Hero Honda, it has an upper hand in high-end

bikes with its runaway success Pulsar.

Bajaj, who was in Indore for the eighth annual convocation ceremony of the Indian Institute of Management, had recently also reacted sharply to Tata Group chief Ratan Tata's statement that the low-cost was being developed in concern for the safety of those travelling by two-wheelers.

"He has to sell his car... So he has to speak like that," Bajaj had said, terming Tata's comments as a marketing ploy.

Bajaj also said he was in favour of special economic zones provided they are not located near cities like Mumbai and Delhi where there is land shortage.

 It's raining cars this summer