The latest model, called Nano Twist, targets young people. It has power steering along with remote keyless entry, a four-speaker music system with bluetooth and a higher ground clearance for rough terrain.
Ranjit Yadav, president, of the passenger vehicles business, Tata Motors, said the car was loaded with trendy features to make it a smart city car to hang out with.
When Tata Motors - part of India's huge Tata group - launched the Nano in 2009, analysts said it would revolutionise how millions in India travelled.
But after poor sales in recent years, it become clear the car's unique selling point - its price - had backfired as aspirational Indians shied away from buying a vehicle tagged as the world's cheapest.
Tata Motors has been seeking to reposition the car in the market by adding features and making it trendier.
In December, Tata Motors sold just 554 Nano cars, down 75% from 2,202 cars a year earlier. Tata Motors officials said some 45% of Nano drivers are between 18 and 34.
The Tata group's former chairman Ratan Tata said shortly before his retirement in December 2012 it had been a mistake to market the Nano merely on its low-price, saying various stigmas have been attached to it.
He said the Nano had a strong future with an upmarket image and did not want it to be branded as the world's cheapest car.
The purple-coloured Nano Twist will be sold at a price of 236,000 rupees (US$3,800) while the base model costs around 150,000 rupees (US$2,400).
Since its launch the Nano has had several small makeovers - including upgrades to its interior and a doubling of its warranty to four years.
Source: AFP via I-Net Bridge
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