Indian car maker Tata is considering launching a cheap "people#;s car that would be assembled in small plants across the continent and sold for about $US3,000, the Financial Times said.

The vehicle would bridge the mobility gap between cars and scooters and combine a European citycar body style with a motorcycle-based engine and gearbox, the newspaper said.

Citing Tata chairman Rata Tata, the FT said that the company was still looking for partners for the project.

Tata displayed a seven-seat Indiva MPV concept car based on the Indica hatchback platform alongside its new Indica sedan at the Geneva motor show this week. It will next year introduce an Indica estate car aimed at European buyers.

The FT added that the Indian company was continuing informal talks with MG Rover over shipping Indica assembly kits to the UK company#;s Longbridge factory for assembly and sale as an entry-level Rover.

Rover has lacked a supermini contender since its 100-series model, evolved from the 1981 Austin Metro, went out of production in the mid-1990s due, in part, to buyer concerns over its poor crash safety results in European tests.

The FT said Rover would fit its own K-series engine (eight-valve 1.1 and 1.4-litre versions are available off the shelf) to the Indica and price it well below its current cheapest model, the 25. Indian market Indicas have Tata's own 1.4-litre petrol or diesel engines.

Tata recently introduced a revised version of its Indica hatchback with the new sedan and took the unusual step of offering to retro-fit earlier models with the improved version#;s updates in response to customers#; complaints.