World's Cheapest Car Gets a Makeover

Tata Motors, which makes the Nano as well as British luxury brands Jaguar and Land Rover, said the car would now be available in more colours and with more luxurious interiors while featuring better fuel efficiency and engine power.

The engine will be increased by three horsepower to 38, the inside of the car will be quieter, while a "racier sounding exhaust" will give it "a more assertive road presence," the company said.

The changes were based on feedback from Nano owners who "have given us valuable insights on what more can be done," said P.M. Talang, Tata Motors? India operations managing director.

The move is part of a drive by Tata Motors to increase sales of the snubnosed Nano, which has had a rough ride.

Tata expected to sell 25,000 Nanos a month as it targeted ever-growing numbers of families looking to upgrade from a motorbike to four wheels.

The low-end car, sold without air conditioning, costs 140,880 rupees (Rs 8 661) while the premium version -- which comes with air conditioning, central locking and power front windows -- sells for 196,959 rupees (Rs 110 171).

In October, sales rose by 26 percent to 3,868 from the same month the previous year, up from a monthly sales low of just 509 units in November 2010.

Analysts say the Nano's sales have disappointed because of safety concerns after a series of engine fires, production glitches, as well as cut-throat competition in the small-car segment of India's booming market.

Others have said the company failed to get the marketing right, selling the car simply as "cheap" rather than an aspirational product for the burgeoning middle classes.