The original rival of Tata Nano, Bajaj Lite may miss the launch date of this year. Bajaj had planned to manufacture and market the ultra-low cost car along with French car manufacturer Renault.

The launch of Lite could be delayed by a couple of months. Industry experts say that the delay could increase the price from the currently projected Rs 1.40 lakh, which is only second to the cheapest car of the world Tata Nano.

The reason of delay has been attributed to the continuing feasibility study. Both Renault and Bajaj had initiated the study, which was meant to be completed by March end. However, sources said critical issues such as design, engine specifications and pricing are yet to be finalized by the two companies.

Bajaj Auto, a two wheeler major in India had completely developed the ultra-low cost car Lite concept car at the Auto Expo 2008, at New Delhi. But the agreement between the Bajaj and Renault stated that the car would be jointly developed. Renault will design the body construction and suspension and Bajaj will deliver engine and transmission. The focus of the car would be on fuel efficiency.

Renault CEO Carlos Ghosn has earlier claimed that the car would be priced within Rs 2.23 lakh but the rising input costs could drive the price upward. The philosophy is that price of the car is less important than the fuel efficiency.

Industry sources speculate that the car will be powered by a 600–800 cc engine and will give a mileage equal to Tata Nano of 20 kmpl.

Bajaj and Renault are yet to rope in component makers into the project. If launched Bajaj Lite will pose tough competition to Tata Nano, which is the only car now in the ultra-low cost car segment.