The Renault-Nissan combine and its Indian partner Bajaj Auto Ltd will roll out an ultra low-cost car in 2012 that will cost less than Tata Motor’s Nano, the world’s cheapest car.

The proposed car — codenamed ULC — will also consume less fuel than any other four-wheeler on the Indian road, said Carlos Ghosn, president and chief executive of both the French and Japanese carmakers.

The success of the car is crucial to Renault-Nissan, which commands 10 per cent of the global market but accounts for only 1 per cent cars sold in India.

“This is a market that’s going to be one of the largest, and we want to make sure that whatever we do, we do it right,” Ghosn said.

He predicted the Indian market could grow more than four times to 6 million in 10 years.

The design, manufacturing and sourcing for the ULC would be done by Bajaj Auto, while marketing of the car in India and overseas would be handled by Renault-Nissan, Ghosn said.