After having been in constant denial about plans to bring out a low-cost car to to counter the challenge posed by the Nano, it is now clear that Maruti Suzuki India is likely to take on Tata Motors' Nano with a stripped-down version of its small car Alto, rather than engineer an all-new car.
The Alto is already compatible with the new emission norms and other regulatory criteria.
According to various media reports, while the stripped down version of the 796cc Alto will be priced competitively to the Nano, there will also be an upmarket variant sporting the new KB series engine to take on the Hyundai Santro, GM's Spark and other compact cars in the market.
The KB series engine also powers the A-star, a premium hatchback car launched last year.
The company is planning to refresh its entire existing portfolio of older models in the next two years, company officials have been quoted as saying. The Swift, the largest selling premium hatchback in the country, will get a fresh design and a new petrol engine.
The ageing WagonR and the Versa are also being overhauled, while the company will tweak the engines of 25-year old Maruti 800 and the Omni to meet the new BS4 emission standards coming in April 2010.
The sports utility vehicle Grand Vitara will also sport a new engine.
Maruti Suzuki managing director and chief executive S Nakanishi said, ''We have exhausted our quota of new cars with eight new launches in India in the past three years. Now we are looking at strengthening our leadership by refreshing our old portfolio.''
The company has developed the new KB series petrol engines at an investment of Rs1,200 crore, which will power several of these cars. The company will spend an additional Rs1,800 crore in the fiscal on the portfolio revamp.
Meanwhile, Maruti may also bring its new sedan Kizashi to India sometime next year.
Developed by its Japanese parent Suzuki Motor Corp, it will compete with the likes of Honda Civic, Toyota Corolla and Hyundai Elantra, according to an Economic Times report.