Hyundai's Tata Nano Competitor, Rendered – Click above for high-res image gallery

While the Tata Nano isn't sold here in the U.S., the $2,500 uber-economy car, along with its acquisition of Jaguar and Land Rover, has put Tata Motors on the international map. The reason for the Nano's celebrity has everything to do with its ridiculously cheap price tag, which gives many buyers in India a four-wheeled vehicle they can actually afford. But the Nano also gives the competition a low-ball target to shoot for, and rumor has it that Hyundai has the little Tata in its crosshairs.

Indian Autos Blog quotes unnamed sources within Hyundai's India operations saying that the Korean automaker is working on a Nano-sized microcar that could carry a two lakh rupees ($4,400 in U.S. dollars) price tag. The report goes on to say that the low-cost, sub-i10 ride, reportedly called the H800 project, is powered by an 800cc petrol engine and priced to compete withe the SAIC microcar, the Suzuki Alto and the Nano. Further, the site claims that Hyundai will have a working prototype ready for real-world testing by the middle of 2010.

Since Hyundai hasn't officially announced the existence of the H800, we don't know how realistic looking IAB's rendering really is. But we can tell you that the ice-blue rendering is a whole lot more attractive to our eyes than just about anything else in the sub-$5,000 price range.

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