Renault has made clear its ambition to capture five per cent of the Indian car market by 2017.

Central to the French car giant's plans is its brand new Kwid hatchback, which will sell for Rs300,000 (£3,000).

Because the Kwid has been designed in India, Renault has been able to take advantage of lower development costs.

Renault is the first European car maker to launch an international model in India.

Carlos Ghosn, chief executive of Renault-Nissan, was in Chennai, India's southern car manufacturing centre, where he said: “This is a car for conquest in India.”

“When you look at other markets where you have big [budget] segments like this, South America is the first and most obvious one, but it is not the only one,” said Mr Ghosn.

Renault is going into direct competition with Maruti Suzuki and Hyundai.

While India has a very low car-per-capita rate, it is nevertheless the sixth biggest car market in the world. If Renault can achieve success in India, it could mean substantial profits.

The Kwid could also be exported to nearby countries, and eventually be manufactured in South America.

Renault aims to increase production capacity in India to 400,000, either by expanding its Chennai plant that it shares with Nissan, or by building a new factory.

Some experts have suggested that the French car giant may struggle to compete with better-established brands such as Maruti Suzuki, which builds the Alto – the best-selling small car on the planet.

The French firm’s low number of dealerships has also been cited as a potential hindrance to expansion.

Renault is the eleventh largest car maker in the world (2013 data), and sells more than 50 per cent of its vehicles outside Europe. Its partnership with Nissan, the Renault-Nissan Alliance constitutes the world's fourth-largest vehicle manufacturer.