Carlos Ghosn, chief executive of Renault and Nissan, yesterday pledged that a car the group is planning to make with an Indian partner would be cheaper to produce than the Tata Nano, the world's cheapest car.

Mr Ghosn said the "ultra low-cost car", which will be designed and built by Renault and Nissan's Indian partner, Bajaj Auto, would also trump the Nano and any other car in the market on fuel efficiency. It will be launched in 2012.