Renault will launch an entry-level version of its Twingo supermini next month, priced £7,500.

The Twingo Extreme has been priced to undercut the Fiat 500 and Suzuki Swift while competing with the Daihatsu Sirion and Citroen C1. Powered by a 60bhp 1.2-litre engine, the new model is part of Renault’s eco2 line-up and Renault claims it will achieve 50.4mpg on the combined cycle.

However, its emissions rating of 132g/km falls outside the proposed congestion charge exemption band, unlike the Fiat and Daihatsu rivals.

Standard equipment includes remote central locking, sports bodystyling, front foglamps, electric front windows, 14” wheel trims, rev counter and internally adjustable door mirrors in black.

Dealers will be encouraged to generate incremental revenue by up-selling the personalisation opportunities with Twingo, with exterior decals such as racing stripes or chequered flag door graphics.