World's cheapest car, the Tata Nano, could soon face some competition from an unlikely source.

Renault is known for making charismatic and relatively sophisticated cars aimed mainly at its European home market, but a recent report from Automotive News Europe claims that the French carmaker will soon be aiming for the very bottom of the world market.

And we really mean rock bottom.

Yes, folks, they're going to be building a Tata Nano rival. While little is known about the car itself, the automotive rumour mill is throwing around a price of around 3000 euro (R34 500). The latest Nano costs the equivalent of R23 546.

Renault's CEO Carlos Ghosn was previously reported as saying the company needs to capitalize on the needs of developing markets and that a range of cars that slot below the Dacia Logan and Sandero were needed to achieve this.

To that end, Renault is also said to be working on another low-cost car that would slot beneath the aforementioned cars but above the Nano rival.

Neither of these cars will be destined for the European market however, where Renault has a more premium image to maintain.