The new Tata Nano from India is the world’s cheapest car at just £1,358.

The cheapest car in the world is officially launched today by India’s Tata Motors – priced at just 100,000 Rupees (£1,358).

The four-door, five-seater Nano has a 33bhp, 624cc engine at the rear, and measures just 3 metres long (10ft).

Described as the “People’s Car” by Tata Group Chairman Ratan Tata, the Nano is hoped to redefine personal transportation in modern India – where many families drive auto rickshaws – which generally have no doors or seatbelts.

The Nano, although without airbags, air conditioning, radio, or power steering as standard, offers a comfortable ride and will be a fully-fledged contemporary automobile in any market.

Since its unveiling on 10 January 2008, the mini car has caused immense interest in India, with 30 million hits on the website and the creation of over 6,000 interest groups and communities.

However, hit by the global downturn, the company declared a loss of 2.63 billion rupees ($37 million) for the October to December quarter, and it has been struggling to refinance the remaining $2 billion of a $3 billion loan it took to buy the Jaguar and Land Rover brands from Ford Motor Co. in June.

In addition, the launch has come six months late after Tata pulled out of its factory in West Bengal in a row over land acquired from farmers, and instead moved production to the western state of Gujarat.

Until the Sanand facility is ready by 2010, the Nano will be produced from Tata Motors’ factories at Pantnagar in Uttarakhand and Pune in Maharashtra in limited numbers.

A slightly more robust version of the Indian model – the Tata Nano Europa – is planned for launch in 2011.