Renault, Nissan and Bajaj Motors are to jointly build a $2,500 car to compete with Tata Motors’ Nano cut-price family model.

The car, called ULC for “ultra low-cost,” will be made at a new 400,000-capacity joint-venture plant in Chakan, Maharashtra, the three companies said on Monday. Bajaj – best known for its motorcycles – and Renault and Nissan will own 50, 25 and 25 per cent of the joint venture respectively and the car will be sold from early 2011.