While the home-grown automaker, Tata Motors is expected to be on the brink of gaining momentum as far as the volumes for the world's cheapest car, Tata Nano is concerned, it is learned that the company is also working on a plan to launch another small car in the Indian market.

The product is expected to debut in 2012 that will be launched with an 800cc engine in the domestic market.

The car, code-named 'Dolphin' is most likely to be launched in the next 18-24 months between the small car Nano and the Indica, in the Indian market. Industry experts believe that the car will sport a price tag of around Rs. 3.5 lakhs and will add the heat in the A2 segment.

However, the sources are of a view that the company still hasn't provided clarity on whether the product will also carry a diesel variant.

Notably, the Indian small car segment has already seen a host of launches including products like Beat, Figo and Polo. It may be noted here that the market leader, Maruti Suzuki will launch a successor to the Alto that would have the latest 1L engine, thereby leaving the 800 cc space.