The Tata Nano did not do as well as the company expected, in spite of the vehicle's pricing, INR 4000 crore investment and a dedicated manufacturing facility.
The company now looking to make up on the losses, it is planning on building a slightly bigger hatchback with the same Nano platform.
The car is being built on the X302 platform to directly battle against Maruti Suzuki's Alto. The Pelican will be offered with two engines. A 1-litre petrol engine and a 800cc diesel engine.
The car is expected to hit the markets by next year. The company has plans to sell the new car under a new brand name. The diesel variant will be the cheapest diesel car sold in India and will even be exported to other countries.
The Pelican will be manufactured in the factory in Sanand, along with the Nano. Tata Motors has plans of selling 2,500 units of the pelican monthly.