An Australian motoring expert says the launch of the world's cheapest car in India could double the number of cars on the world's roads, which would have a detrimental effect on the environment and push up the price of oil.

The Tata Nano, which sells for less than $3,000, was launched live on national television in India and more than 40 million people have visited the vehicle's website.

The vehicle is just over three metres long, meaning you could park six-and-a-half Nano cars end to end on a cricket pitch.

The company's Ratan Tata says he wanted his firm to produce a car which was affordable for young, middle-class Indians.

"We can give the younger people of India, who have not had a car within their reach, an automobile they can have for their families and transport," he said.

The Nano will not be available for sale in Australia, as it fails to meet various registration requirements, but Wheels Magazine's features editor, John Cadogan, says the car's release will have a major impact on the world automotive industry.

"This is an absolutely landmark car on a global scale," he told the ABC's Midday Report.

"When India gets to the level of car ownership that we enjoy in the West, which is about 700 cars for every 1,000 people, it could double the number of cars on Earth, presently 900 million, growing to 1.8 billion.

"That will have profound impacts for carbon dioxide production, greenhouse [gases], the environment and health generally."

The challenge for the designers was to make the car cheap but safe and it has taken six years to develop the car.

There are half as many parts in the door handle compared to a standard car. They even decided to have three wheel nuts on each wheel instead of four.

Mr Cadogan says suggestions that car-owners would replace their gas-guzzling four-wheel-drives with the Nano and drive down carbon emissions are not likely to ring true.

"That would be brilliant if that's what happened but what's going to happen in India is that the Tata Nano is going to put new car ownership on the shopping list for a bunch of people who just haven't been able to afford a car in the past," he said.

"So we're not going to be replacing gas-guzzling 4x4s with fuel-efficient cars, we could do that already in the West. What's going to happen is a lot more cars are going to get on the road and they're going to happen in India and China and it will be a profound change."

Mr Cadogan says this influx of cars on world roads will put pressure on the price of oil.

"Oil is running out and in fact we're at about peak oil production now and China and India are running to the party and the keg is half empty," he said.

"So what that's going to do is increase demand, fix supply, join the dots, economics 101 tells us that the price can only go one way and that is up."

Anumita RoyChowdhry, from the Centre for Science and Environment in New Delhi, also has concerns.

She is worried there will not be enough infrastructure nor pollution controls to deal with so many new cars on India's roads.

"What cheap cars are going to do is just to accelerate the motorisation rate that has just taken off in India," she said.

India is already regarded as one of the fastest growing car markets in the world but it has a long way to go. Only 1 per cent of Indians own their own car. For many others, it is still a dream.

The Tata Corporation is also launching a version of the Nano in Europe, hoping the global financial crisis will make its cut price car a recession hit.

The manufacturers have set up a lottery system for prospective buyers trying to order one of the first 100,000 cars.

  © 2008 Australian Broadcasting Corporation