Proton management plans to launch the brand in India early next year. Up front, the Malaysian manufacturer will offer the Savvy, Saga and Persona models as imports, but is also investigating joint-venture collaborations to build and market CNG-compatible cars in India.

After China, the Indian market is the world's fastest growing region for sales -- and Proton is keen to establish a toe-hold there. CNG (Compressed Natural Gas) is a popular fuel in the country and 75 per cent of all cars sold in India are small hatchbacks or sedans, so, in the words of Proton's Managing Director, Syed Zainal: "India offers huge potential for a company like Proton".

"In terms of volume, we have set a target of doubling total sales volume to 300,000 units by 2010 and India will be a major part of that growth.

Proton's announcement closely follows the international launch of the ultra-low-cost Tata Nano (more here) and reports of a competitor supported by Nissan and Renault (more here). In addition, Suzuki subsidiary, Maruti, is believed to be considering a reduction in the price of the Maruti 800 to compete with the Nano. In the past, the Maruti 800 has been the most popular car in India.

With at least three very low-priced cars in the market, Proton may need to shave the price of the Savvy very close to the bone to compete effectively.

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