World's cheapest car catching on fire - literally

The world's cheapest car, the Tata Nano, is under fire in India as reports emerge of some of the models bursting into flames recently due to alleged circuit problems.

Three fires have been reported spontaneously occurring in the steering columns of Nanos in India, where 7,500 vehicles have been delivered since July.

No injuries have been reported but one customer has refused to allow Tata to inspect the car and instead filed a police report, according to US financial newspaper The Wall Street Journal.

Tata announced October 26 that they will undertake a pre-delivery audit of all new cars and will examine cars already in customer use, but have avoided the dreaded "recall" word thus far. The Indian automaker blamed the problem on a short circuit in the switch that controls the headlights, windshield wipers and dashboard indicators.

The tiny Nano is called "The People's Car" due to its historically low price of around Rs 115,000 (€1,700). The car has already received an overwhelming 200,000 pre-orders in India and has revolutionized the way the world looks at low-cost automobiles.

Nearly 100,000 Nanos are expected to be sold domestically in 2010, with export plans in place for Nigeria in 2010 and Europe in 2011, provided it passes safety testing. In July, Tata announced its intentions to sell the Nano in Latin America, via Italy's Fiat group, which has a strong presence there.

Compare over 65 car insurers and get £25 Cash back through Independent Compare