CARLOS GHOSN, Renault and Nissan chief executive, yesterday pledged that a low-cost car the group is planning to make with an Indian partner would be more economical to produce than the Tata Nano, the world's cheapest car.
Ghosn said the "ultra low-cost car", which will be designed and built by Renault and Bajaj Auto, Nissan's Indian partner, would also trump the Nano and any other car in the market on fuel efficiency. It would be launched in 2012.
The announcement will stoke competition between global carmakers for the bottom end of the rapidly growing Indian market, which Ghosn predicted would increase from two million cars a year to six million in the next decade.
The Tata group raised the barrier to entry this year with its release of the Nano, the first four-wheel vehicle in the market to be priced near two-wheelers.
But Tata was forced to launch with a lower than expected initial production run of fewer than 100,000 units after its original proposed factory in West Bengal in eastern India had to be abandoned because of complaints from surrounding farmers.
This gave a reprieve to rivals such as Renault and Bajaj, who started preliminary talks on their ultra low-cost car two years ago.