Bajaj Auto’s ultra low cost (ULC) car, scheduled to hit the roads in 2010-11, is expected to deliver on-road mileage of over 30 km a litre, according to top sources involved with the project. The vehicle will roll out of a new plant in Chakan near Pune. The company believes that this will be the most important differentiator in this price segment of Rs 1.5 lakh where the car will be pitted directly against the Tata Nano, scheduled to be launched on March 23.

Since this is a platform, there will be more than one version with different price points going beyond the basic level of Rs 1.5 lakh (on-road). It is expected to have both petrol and diesel options, unlike the Nano which will kick off with a petrol version while the diesel will follow in end-2010.

The Bajaj team handling the ULC project is, apparently, convinced that doubling mileage is more important than halving the price. This has stemmed from Bajaj Auto’s own experience in the past when the once robust market for the Chetak scooter literally shifted overnight to motorcycles, which were dearer but much more fuel-efficient. The idea is to work on this car with the mindset of a motorcycle, sources said.

The ULC project was conceived as a three-way alliance where Bajaj would hold 50% equity with Renault and Nissan accounting for 25% each. However, in a statement signed by the Managing Director, Mr Rajiv Bajaj, on Saturday, the message was clear that the company would go it alone if the other two were to back off.