It is a common sight on Indian roads: a family of five sandwiched on a motorcycle – the mother suckling a baby at the back as her husband weaves between traffic at concerning speed and two older children defy gravity by clinging on.

For the majority of the 1.1 billion population, this is the definition of upwardly mobile. But that may soon change as some of the world’s leading carmakers draw up plans for ultra-cheap vehicles aimed at first-time buyers in emerging markets.

The transport revolution brewing in India is being led by Tata Motors, part of the salt-to-software industrial empire that owns Corus and Tetley Tea.

The Indian conglomerate will next year launch its trumpeted small car, nicknamed the “one-lakh car” because it was conceived to sell for 100,000 rupees, known locally as one lakh, or £1,200.

Rising raw material prices and production delays mean that that figure is likely to rise, but it will still be the world’s cheapest car. The current cheapest is Suzuki’s Maruti 800 at more than £2,000. The price tag is designed to graduate Indians from two and three-wheelers – which outsell cars by six to one – to four wheels, four doors and a roof. Only eight in 1,000 own a car, a status symbol every Indian aspires to. A motorbike costs about £730.

Tata’s vision, first expressed four years ago, has sparked a copycat rush to the showroom by rivals eyeing the Indian market, which is forecast to double to 2.2 million units by 2010, as sales stagnate in the US, Japan and Europe.

Tata has been reluctant to give away too much about its car, which is being designed in Britain but will be built at four plants across India to keep development costs low.

It has revealed that, like VW’s low-cost Up! car, it will have a rear-mounted 600cc engine and seating for four. It also claims it will be greener than people expect, a riposte to critics who complain India’s chaotic roads are jammed enough without a mass transit vehicle adding to the mayhem and carbon emissions.

Tata aims to shift 1 million units a year, about as many as are presently sold in the whole of India.

Can it be done? Will it be safe? India hardly has a reputation for making good cars – its first and most famous marque is the Ambassador, modelled on the Morris Oxford. Built like a tank, with uncomfortable bench seats and zero suspension, the Amby still confers a badge of authority and is sturdy enough to resist potholes and the odd bullock cart.

The truth is, Indian carmakers have little experience in making cars for anyone other than Indians. Yet, the target customer for the one-lakh car – dismissed by sceptics as “an enclosed scooter” – is the first-time buyer, so expectations will be low.

For the average Indian, having a roof over his head and four wheels beneath him as he drives around with his family, raises him a notch in society. He will care less if it is held there with industrial glue rather than bolts.