Bajaj Auto Ltd has shelved a project to develop a low cost minicar in India for Renault SA and Nissan Motor Co saying it was commercially unviable.

The Wall Street Journal cited Mr Rajiv Bajaj MD as saying that the company is not planning to get into the low margin passenger car business.

The paper said that the company will instead unveil a low cost commercial vehicle in January.

The Renault Nissan alliance signed a memorandum of understanding last year with India's No.2 two wheeler maker to develop an ultra low cost car for India and other emerging markets and had planned to launch it in 2012.

The car was expected to rival TATA Motors' Nano, the world's cheapest car.

The design, manufacturing and sourcing for the car was to be done by Bajaj, and Renault-Nissan would handle marketing in India and overseas.

Nissan spokesman Simon Sproule said in Tokyo that the partners would be facing certain milestones in making decisions for the project in the next few weeks, but the company had no immediate announcement to make.

(Sourced from Reuters)