Chinese car maker Geely is planning to grab the headlines as maker of the world’s cheapest car, when it launches a small hatchback based on the IG concept shown at Beijing.

Tipped to cost between £1500 and £2000, the IG would undercut the Tata Nano, which currently retails at the equivalent of £2500.

See pics of the Geely IG

Geely, which recently bought Volvo from Ford, also claims that the IG, or Intelligent Geely, will be of better quality than the Nano.

Although the IG is 185mm longer than the Toyota iQ and sits on a 100mm longer wheelbase, it is billed as a 2+2, with very limited rear space.

The concept’s expensive gullwing doors are expected to be deleted in favour of a more conventional design.

There’s even a chance that an electric version of the IG will be sold in Europe and the US.

Autocar's Beijing motor show coverage

Geely already sells cars in Russia and eastern Europe, and is looking to expand its reach. “The concept has had a very positive reaction, and with the car not launching until 2012 there is time for us to expand our network before then,” said a spokesman.

The Chinese version of the IG will be powered by a 988cc petrol engine developing 70bhp and 69lb ft and driving the front wheels through a five-speed CVT ’box.

The electric version will follow around 2014 or 2015, featuring a lithium ion battery, an 80bhp/133lb ft electric motor and an estimated range of 93 miles. The concept has solar panels on the roof, bonnet and dash to help increase its range.

The IG is set to be built at new Volvo owner Geely’s Linhai base.

Jim Holder