Just two years after launch, Tata Motors' Nano budget car has been given a facelift in an attempt to boost sales.

The company said the car would now be available in more colours with improved interiors using better materials and will have greater fuel efficiency and engine power.

Engine output is increased by 3hp to 38hp and a "racier sounding exhaust" will give it a more assertive road presence, the company added.

PM Talang, Tata Motors’ India operations managing director, said the changes were based on feedback from Nano owners.

The company wants to sell 25,000 Nanos a month as it targets increasing numbers of families looking to upgrade from a motorbike to four wheels.

The base model, sold without air conditioning, costs INR140,880 (US$2,770) while the premium version - including air, central locking and electric front windows - sells for INR196,959.

Last month sales rose 26% year on year to 3,868, up from a monthly sales low of just 509 units in November 2010.

Nano sales slowed over safety concerns after a series of engine fires, production glitches, plus cut-throat competition in India’s small-car segment.

Tata has sold around 130,000 Nanos since the car was launched in April 2009.