NEW DELHI: The maker of the Nano, the world's cheapest car, said Tuesday it was developing a version of the vehicle for the US market with a larger engine and higher safety standards.

"We also recognise there is a market not only in developing countries, but possibly for a low-cost car in developed markets," the chairman of Nano manufacturer Tata Motors, Ratan Tata, told reporters at the Delhi auto show.

"For the US, we need a car that will have a larger engine, which needs additional crash tests, modifications, and we're in the process of doing this."

The basic Nano, a stripped-back four-door vehicle launched at the Delhi show two years ago, costs about 2,500 dollars, while the top-end model with additions such as air-conditioning and a rear wiper costs 3,700 dollars.

Tata received 206,703 bookings for the car when it began accepting reservations in April last year, but waiting lists are long because of difficulties in setting up a production plant.

The Nano has sparked a race to create other ultra-low-cost cars for the Indian and other emerging markets.

French automaker Renault and its Japanese partner Nissan plan to launch a car to rival the Nano in 2012 that will be built in partnership with scooter and three-wheel specialist Bajaj Auto.