Recognising the need for a larger presence in the mass volume A2 segment, Tata Motors Ltd is understood to be developing a new small car.
The country’s largest auto maker, which is developing the car internally, plans to sell the model between its smallest Nano and hatchback Indica models.
The car, code-named “Dolphin”, is likely to be launched in the next 18-24 months, an industry source said today.
“The car is expected to be powered by an 800cc or 1,000cc engine, and will be strategically placed in the A2 segment like Maruti Suzuki’s WagonR and Hyundai i10,” the source said.
He said the car is likely to be priced around Rs 3.5 lakh.
When contacted, a Tata Motors spokesperson declined to comment on the matter, describing it as market speculation.
The industry source said the car would be developed on an all new platform. The Indica currently comes fitted with a 1.3L diesel and a 1.1L petrol engine. The Nano has a 663cc petrol engine.
The A2 segment, that comprises more than 70 per cent of the country’s passenger car market, includes 20 models from various auto makers.
Maruti Suzuki has the biggest presence in the A2 segment, with as many as six models, compared with Tata Motors’ one. The segment is witnessing increased interest in the country, with auto makers scrambling for a significant share in the pie.
Tata Motors, India’s largest commercial vehicle maker, currently sells just one hatchback in the A2 segment and two in the mid-size segment.
It also sells the Safari and the Sumo in the utility vehicle category.
“Perhaps Tata Motors is looking to plug the gap between the Nano and the Indica in its portfolio,” the source said.
Moreover, there is likely to be a vacuum in the lower A2 segment after Maruti Suzuki pulls out its M800 and Alto models. Both models are fitted with an 800cc engine.
Alto, incidentally, is the largest selling car model in India. Due to the introduction of the Bharat Stage-IV emission norms, both M800 and Alto models have been rendered outdated in 13 major cities from April.
Maruti has said it would eventually discontinue the M800 altogether, as any new investment in the over 25-year-old model would make it unviable.
The company is also planning to launch a successor to the Alto that would have the latest 1L engine, thereby leaving the 800 cc space.
Though Tata Motors has not specified any timeframe for the new model rollout, the industry source said the company has sent sample drawings of the proposed new model to component vendors, seeking their “requests for qualification” documents.
“We don’t even know whether it will be a petrol or a diesel model, or if it would have both. There is still no clarity on it,” he said.
Shares of Tata Motors today closed at Rs 844.45 on the National Stock Exchange, up nearly 1 per cent from Thursday.