Nissan Motor is holding talks over developing a small car with the Indian group Ashok Leyland, local press reported.

The Business Standard quoted Nissan boss Carlos Ghosn at the Geneva show saying: “We are studying the possibility of tying up with Ashok Leyland and some other manufacturers in China and Indonesia for a small car project.”

The Ashok Leyland project was in addition to the project with Bajaj Auto for an ultra low-cost car, the report added.

Renault-Nissan and Bajaj Auto are planning to roll out an ultra low-cost car in 2012 that Renault is aiming to market in India with a lower retail price than Tata’s Nano. India media reports in November last year said that the proposed car – codenamed ULC – will also consume less fuel than any other four-wheeler in India.

The design, manufacturing and sourcing for the ULC would be done by Bajaj Auto, while marketing of the car in India and overseas would be handled by Renault-Nissan.

The car – which will compete be head-on with the Tata Nano – is expected to carry the Renault badge.

The two companies first announced they would link up to produce an ultra-cheap car in 2008 but there had been reports of disagreement between them, which the parties now claim have since been ironed out.

Renault also collaborates with Mahindra in India, which assembles the Logan.

Nissan launched its redesigned Micra (March in Japan), which will be built in several emerging markets, including India, in Geneva on Tuesday. The current model, built for Europe in the UK, will be replaced on the assembly line by the new Juke crossover.