French carmaker Renault, with its partner Nissan, has said that its planned cheap car for India will cost less to produce than Tata’s Nano.
The firm would not confirm the price, but says it will be for the entry level market and “priced competitively”.
The design and manufacture will be done by the Indian firm Bajaj, while Renault and Nissan look after the marketing.
The Nano is currently the world’s cheapest car, with the most basic model selling for about $2,000.
Renault chief executive Carlos Ghosn said “the cost of this car would be lower than any car made in India today”, but added there would be a difference between cost and price.
The car, which is due to be launched in 2012, will be aimed mainly at the Indian market, but exports are a possibility.
Renault also says it will be very fuel-efficient.
India is one of the biggest growth markets for the car industry. Mr Ghosn predicts that the market there could triple to six million vehicles in 10 years.
General Motors, Toyota and Ford are all designing cheap models for India – although Ford has said it will not compete directly with the Nano.
Renault already has a joint venture with India’s Mahindra and Mahindra to make the Logan Sedan. Its partner Nissan works with Ashok Leyland to make light trucks.
Source: BBC News