Promising to deliver a small car that will be the cheapest in India in terms of running costs, auto maker Renault-Nissan combine today said they along with Bajaj Auto have finalised an ultra low cost product that will hit the market by 2012.

"While it is too early to say about price of the car, the cost of the car (in terms of overall running cost) will be lower than the cost of any other new car made in India today," Chairman and CEO of Renault Carlos Ghosn at the India Economic Summit.

The car, which will hit the market a in 2012, was originally scheduled to be launched in India in 2011 but was delayed due to differences between the partners in terms of pricing and design.

Earlier, Renault had wanted to price the car at around USD 2500.

"It is not sufficient to launch the car on a low price only, but it also needs fuel efficiency. It will be a very competitive product and very affordable," he said, when asked if the ULC would be priced lower than Tata Nano.

As per the agreement, the design, engineering, sourcing and manufacturing will be handled by Bajaj Auto while marketing and selling will be by Renault-Nissan Alliance, Ghosn said.

The brand under which the car will be sold will be selected by the Renault-Nissan alliance. "There will be no Bajaj name on the car," Ghosn said.