Chinese firm plans to unseat Nano as world's cheapest car

Beijing: Chinese manufacturer Geely plans to unveil a budget city car which would cost less than the Indian-made Tata Nano.

The new Geely IG would sell for around $2,250 when it goes on sale in China in 2012. That compares to an asking price of between $2,700 and $3,800 for the Nano in India.

The basis of the new Chinese runabout is the flamboyant Geely IG showcar, recently shown in Beijing. However, the new model will not share that concept's innovative, upwardly-hinged "gull-wing" doors.

Geely, which recently bought Swedish marque Volvo from Ford, says its new subcompact will also be built to a higher quality standard than the Nano.

The four-seat mini is likely to be powered by a one-litre petrol engine generating 70 horsepower and mated to a five-speed gearbox. Geely has penciled in an electric version using a lithium-ion battery, but this is unlikely to materialise until 2015.