Image caption The Nano was launched amid great fanfare as the answer to India's aspirational middle classes

The "world's cheapest car" is getting a makeover because buyers have shunned the low-budget image.

The Nano, made by India's Tata group, is being re-positioned as a smart city car following disappointing sales.

"We are now focusing on increasing the features and the perceived value of the Nano with every subsequent model launch," said chairman Cyrus Mistry.

Launched in 2009 with a price of 100,000 rupees (£1,400), the car's poor sales were blamed on an image problem.

Tata, which owns the UK's Land Rover and Jaguar brands, hoped the Nano would appeal to Indian families looking to enter the car-buying market.

Mr Mistry told Tata's annual shareholders meeting, in Mumbai, that new Nanos would include power steering options, an improved interior and exterior, be available in more colours, and have better fuel efficiency.

"We are now focusing on making it a smart city car and targeting the young customers," he said.