Honda's small car to cost Rs4.5 lakh: report

Honda's 'Concept Small Car', which will be unveiled at the Delhi Auto Expo from 5 January, is expected to hit the road in 2012. The car will have a 1.2-litre engine, and carry a price tag of Rs4-4.5 lakh, according to reports.

The new car, the cheapest offering from the Japanese carmaker in the Indian market, will be developed simultaneously in Bangkok and the company's plant at Greater Noida. Work on design and other specifications has already begun.

Honda Siel India, the Indian joint venture of Honda Motors, has send letters of intent to its existing suppliers in India, detailing the likely designs and engine specifications, the paper quoted an unnamed person ''with direct knowledge of the development'' as saying.

The company will use Thailand and India as manufacturing bases for the new car for exporting to the emerging markets, the person added. Recently, Honda had hired around 30 engineers for its research and development team at Greater Noida. The team will work closely with the R&D team in Bangkok to develop the small car and also focus on bringing down the production cost of this car by optimising component costs.

Small cars account for nearly two-thirds of annual car sales in India, and Maruti Suzuki India Ltd is the unquestioned leader in this segment. Players like Honda, Toyota and General Motors have also recently started focusing on this segment. The government is also aiming at making India a hub for small cars.