Tata Motors has announced the second generation Nano will go through a series of important changes.

Tata Motors has announced the second generation Nano will go through a series of important changes.

The Nano went on sale in India back in 2009 with a starting price of 100,000 Indian rupees which at that time represented the equivalent of just under $2,000. It was immediately labeled as the cheapest car in the world and over the years it was upgraded and got more and more expensive, with the 2014MY priced at $2,555.

According to retired chairman Ratan Tata, the Nano's cheapest car in the world status actually had a negative impact on sales because he believes many decided not to buy the Nano in order to avoid being "seen in the cheapest car."

As a consequence, the second generation will be thoroughly upgraded and will come with a higher price tag. It will be equipped with a larger and more powerful engine compared to the current tiny two-cylinder 624cc gasoline unit which produces just 38 HP (28 kW) and 51 Nm (38 lb-ft). They plan on making it "more of a real car" by adding additional amenities which they hope will make it "stand out on its own in the marketplace."

Tata went on to specify the main reason they came up with the current Nano is to provide low-income families in India with a safer transportation alternative to motorcycles. He also said the current Nano will live on after the better equipped version will come out.

As a reminder, Tata Motors is also offering a bi-fuel version of the Nano using the same engine which generates 33 HP (24 kW) and 45 Nm (33 lb-ft) when running on compressed natural gas (CNG).

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