Tata Motors [Get Quote] is considering making its first foray into the US with a tie-up to sell its Ace 'mini-truck' with an electric motor in the country.

The Indian automotive company, which earlier this month unveiled the world's cheapest passenger car, the $2,500 Nano, plans to co-operate with a US company to assemble and sell the fast-selling Ace truck in North America.

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"Tata Motors is working on an Ace vehicle with an electric motor in partnership with a US company," the company said on Wednesday, but it declined to elaborate.

The Hindu Business Line newspaper on Wednesday reported that Tata was in talks with a unit of Chrysler, Global Electric Motorcars, over the partnership for the Ace in the US but this could not be confirmed.

Tata Motors was understood to have been approached by the US partner to market the Ace as a "neighbourhood electric vehicle" in the US.

This is a category which exempts it from more rigorous standards applying to vehicles for use on highways or main roads.

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A move into the US would be a significant step for Tata Motors, which has mostly concentrated on developing markets.

Tata Motors started life as a truckmaker and remains India's biggest commercial vehicle manufacturer.

It has diversified into cars and mini-trucks in recent years and is now pursuing an ambitious global expansion plan.

Apart from building the Nano, Tata Motors is the frontrunner in a takeover contest for the Jaguar and Land Rover marques owned by Ford Motor of the US and is marketing its range of vehicles in regions ranging from Africa to South America.

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Tata Motors introduced the Ace mini-truck into India in 2005 and found it was an instant hit with small businesses across the country.

In the first half of the fiscal year ending March 2008, the company's sales of light commercial vehicles including the Ace rose 13 per cent to 64,187 units.

This provided a valuable counterpoint to medium and heavy truck sales, which declined 11 per cent over the same period.

"The Ace has been a run-away hit. It has even taken Tata by surprise," said Neeraj Bandhu, manager - South Asia vehicle forecasts with CSM, the automotive research and consultancy firm. "They have had a lot of production capacity constraints because they never anticipated that demand."