Bajaj has partnered with Renault-Nissan in India to produce yet another 1 lakh rupee car. It would be a direct competition to Tata’s Nano and shall be a strong contender for being the cheapest car in the world.

Rajiv Bajaj, Managing Director, Bajaj, and Carlos Ghosn, President and CEO, Renault, and President and CEO of Nissan, on Monday has officially announced today that it will build another 1 lakh Rupee car in India that would challenge Tata Nano.The new car has been code named as ULC or the Ultra Low Cost car. It shall be launched in 2011 in India while Tata Nano shall be soon available by October this year.

“Targeting the growing Indian new vehicle market, the ULC will be made at an all-new plant to be constructed in Chakan (Maharashtra),” BAL said in a statement carrying the announcement.”

The new ultra low cost car shall be manufactured at its new plant in Chakan, near Pune. The plant shall initially have a capacity of manufacturing 4 lakh units annually. The small car segment has continuously shown great increase in demand each year. The consumers shall have more choice now to pick the ultra low cost car. Thus, both the new models from Bajaj and Tata have good market demands.