Mike Stevens | Nov 24, 2011

Tata's budget-focused Nano could soon have some serious competition in India, according to reports of a new ultra-cheap light car in development at Renault and Nissan.

France's La Tribune reports that Gerard Detourbet, Renault's head of low-cost vehicle development, has been tasked developing a range of new cheap light cars for both brands.

Pegged at around 2500 euros (AU$3440), the small car will reportedly slot in beneath the Micra light car in size, utilising a brand-new platform and engine combination.

The new model will be targeted at the Indian and Asian markets, but a European version - a la Tata's (still to debut) Nano Europa - could also be on the cards.

The report follows news in 2008 that Renault and Nissan had teamed with Indian company Bajaj Auto to develop a new light car under the 'ULC' codename.

Apart from the new ultra-affordable light car, Detourbet's team is understood to be working on a Twingo-sized offering for South American market, and a new minivan that will reportedly debut at March's Geneva Motor Show.

Pictured: the 2011 Nissan Micra.

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