New Delhi - Carmakers Renault SA, Nissan Motor Co and their Indian partner Bajaj Auto are to launch a low-cost microcar in India by 2012, Carlos Ghosn, the chief executive of the Renault-Nissan alliance, said Tuesday.

"Yesterday, we signed an agreement that the low-cost car will be out in 2012. It is going to be an innovative product, the manufacturing cost will be lower than any other available in the Indian market," Ghosn was quoted as saying by IANS news agency.

Ghosn did not give details about the car's pricing but said its design, engineering, manufacturing and component sourcing would be done by Bajaj, while Renault-Nissan would oversee marketing and sales.

Ghosn, who heads the alliance between France's Renault and Japan's Nissan was speaking to reporters on the sidelines of the World Economic Forum's India summit in New Delhi.

"It is too early to say what the name and branding will be," Ghosn said when asked for more details.

He said the car would be fuel-efficient and priced competitively. Analysts expect it to cost less than Tata Motor's Nano, currently the cheapest car in the Indian market at less than 2,500 dollars.

The Indian small-car market is dominated by Maruti-Suzuki - a joint venture in which Japan's Suzuki Motor Co holds a majority stake - and South Korea's Hyundai Motor Co.

Renault-Nissan and Bajaj first announced their tie-up in 2008 but there were delays largely attributed to differences between the partners.

Ghosn said all problems had been sorted out at a meeting on Monday. (dpa)