New Delhi / Mumbai: After hosting the world’s cheapest car in Tata Motors Ltd’s Nano, India might also be the birthplace of the world’s most fuel-efficient small car—excluding hybrids.

Rajiv Bajaj, managing director of two-wheeler maker Bajaj Auto Ltd, said this could be a possibility by 2011, when it launches a small car.

Turnaround plans: Bajaj Auto managing director Rajiv Bajaj. Ramesh Pathania / Mint

Bajaj said the car will hit the roads in 2011, irrespective of any “constraints" on the part of Renault SA or Nissan Motor Co. Ltd, the two automakers Bajaj Auto is collaborating with to produce the small car. “As far as investments are concerned, whether with or without Renault-Nissan, Bajaj is going to implement this project," he said.

Bajaj, who leads the country’s second largest two-wheeler maker, has got his tasks cut out. He has to ensure Bajaj Auto’s sales see a turnaround with successful launches and also steer it successfully into the passenger car market.

Bajaj said by the first three months of the current fiscal year that began on 1 April, his company aims to achieve monthly domestic two-wheeler sales of 120,000, or a 30% jump over 93,000 units it sold last month.

A new version of its flagship model Pulsar will be launched this month, he said, adding that another model to fight rival Hero Honda Motors Ltd, which leads two-wheeler sales, is also in the making. “The trick is to get a product that will crack the middle of the market which is the strength of Hero Honda," he said.

Bajaj Auto’s share in the two-wheeler market has dropped to 14% between April 2008 and February 2009, from 18% during the same period in the preceding financial year, Society of Indian Automobile Manufacturers data show.