After years of secret preparation, the world’s cheapest car will be unveiled in Delhi this week - delighting millions of Indians as much as it is horrifying environmentalists.

At 100,000 rupees (£1,290), the People’s Car, designed and manufactured by Tata, is being marketed as a safer way of travelling for those who until now have had to transport their families balanced on the back of their motorbikes.

Ratan Tata, 70, chairman of the family-run business, who has spearheaded the race for a cut-price car, wrote on the company website: ‘That’s what drove me - a man on a two-wheeler with a child standing in front, his wife sitting behind, add to that the wet roads - a family in potential danger.’

But Tata hopes also to create a ‘new market for cars which does not exist’, making them accessible to India’s booming middle classes made recently rich by an economy growing at around 9 per cent a year. This rapidly expanding market is potentially extremely lucrative; consultants McKinsey predict that the size of the Indian middle class will grow from 50 million now to 583 million by 2025.

Last year just over one million cars and seven million motorbikes were sold in India. Tata wants to transform some of those motorbike buyers into car owners and believes that the company can eventually sell up to a million People’s Cars a year. Analysts say the project could revolutionise car prices, not just in India, but globally. Several other manufacturers have similar products in the pipeline.

These figures alarm environmentalists, already concerned by the congestion and rising pollution levels in India’s overcrowded cities. http://observer.guardian.co.uk/world/story/0,,2235975,00.html