Major Indian two wheeler maker Bajaj Auto is currently focusing on the fuel efficiency and reduced CO2 emissions of its planned low cost small car, which it will build in a joint venture with the Renault-Nissan alliance.

To be pitted against Tata’s ‘one lakh’ (INR100,000 or US$2,200 pre-tax) Nano, the Pune based company is focusing on delivering “path-breaking performance” for its new small car, aiming to achieve maximum fuel efficiency, low emission levels and low maintenance costs.

“The car would deliver path-breaking performance and that’s why we took the difficult [to achieve average fuel consumption] figure of 17-18 km per litre associated with small cars. This needs to go up by 50% to 30 km a litre,” Bajaj Auto managing director Rajiv Bajaj said at a media event in New Delhi.

That is roughly equivalent to 85 miles per imperial gallon.

The car, originally planned for launch in 2009, is now scheduled for a 2012 debut at a target price of 1.12 lakh (INR112,000 or US$ 2,500).

“Timing is secondary and getting it right is more important,” Bajaj emphasised.

Speaking at the launch of two new RE series three-wheelers, he added: “Renault intends to peg the price of the car at $2,500 but we are clear that price of the car is [second  or third in priority] and we should focus on high fuel efficiency, low emission and low cost of ownership, which is what the customer graduating from a two wheeler to a four wheeler is looking for,” he said.

As well as 30 km per litre fuel efficiency, Bajaj is targeting carbon dioxide emissions in the 80-90g/km range [about par with Toyota’s Prius hybrid – ed].

“Moreover, the cost of ownership would be affordable as people buying a two wheeler are moving up to buy the four wheeler,” Bajaj said.

Tata’s Nano achieves 23.6km on a litre of petrol and emits 101 gm of CO2 per kilometre. Compact cars currently sold in Indian market manage 18-19 km a litre but carbon dioxide emissions are much higher.

Bajaj did not provide more details of his firm’s plans to enter the four wheel passenger vehicle and light commercial vehicle sectors, saying only: “We have harmonised our four wheeler plans [with Renault and [more] would be unveiled in 2012.”