Tata Motors, India's biggest auto maker, on Monday said it had successfully tested vehicles running on compressed air on two of its products.

It has tied up with Motor Development International (Luxembourg) to produce and sell cars powered by compressed air.

Both companies had signed a licence agreement in 2007.

The agreement covered two phases of activity, encompassing the technology transfer and proof of the technical concept in the first phase and completing

detailed development of the compressed air engine into specific vehicle and stationary applications in the second phase.

The first phase of this programme, which included proof of the technical concept in Tata Motors vehicles, has now been successfully completed, with the compressed air engine concept having been demonstrated in two Tata Motors vehicles.

The company said in the second phase of the development, the two companies were working to complete detailed development of the technology and required technical processes to industrialise a market-ready product application over the coming years.