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Tata Group chairman Ratan Tata on Thursday unveiled much awaited and much hyped Rs 1 lakh Car ($2,500) the Tata Nano at the 9th Auto Expo in New Delhi.

Ratan Tata, while unveiling the Nano, said: "The car will meet all current safety norms and all emission criteria. The pollution it will cause will be lower than 2-wheelers."

This is the People’s Car, the world’s cheapest car at a starting price of 100,000 rupees ($2,500) or the equivalent of a DVD player in a Lexus.

The prototype of the Nano, the official name of the ultra-cheap car manufactured by Tata, the Indian conglomerate in the lead to buy Jaguar and Land Rover, was unveiled at the auto show in Delhi today with all the frenzied excitement that accompanied the launch of the new Volkswagen Beetle in 1994.

Citing moments in history including the first manned flight by the Wright Brothers and man’s landing on the moon, Ratan Tata, the chairman of the company, revealed a cute, compact car designed to appeal to first-time car buyers in one of the world’s fastest growing car markets.

The car will have a 624-cc petrol engine generating 33 bhp of power. It will sport a fuel tank and 30-litre4-speed manual gearshift. The car will come with air conditioning, but will have no power steering. It will have front disk and rear drum brakes. The company claims mileage of 23 km per litre.

The standard version – which will cost 120,000 rupees on the road after tax and delivery – comes complete with most features in any ordinary car: four doors, a four-gear manual transmission, seat belts, locking and a steering wheel. A small boot allows enough room for a duffel bag.

The deluxe version, costing slightly more, will have air conditioning and central locking, while features such as radios and sun visors can be added at extra cost.

The car will be sold first in India, with an initial production run of 250,000 a year, but is expected to be made available in other emerging markets in Latin America, south-east Asia and Africa within four years. It will launch commercially in the second half of the year.

The Nano is about half the price of the cheapest car available. Both the Maruti 800 from India and China’s QQ3Y Chery sell at about $5,000. The prospect of millions of ultra-cheap cars on the roads of developing countries has sent some environmentalists into a panic.

Tata says the car, which does 50 miles to the gallon, will conform to all present and future emission standards in India and Europe. It has also passed a full-frontal crash test and is designed to pass further impact testing under European standards, he added.