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Big bet on small cars

New Delhi, Sept. 25: At least seven auto makers will launch small cars in the Rs 2-4 lakh price band over the next few months.

While Japan’s Honda will launch the Brio on Tuesday, Korean giant Hyundai is expected to unveil its Eon during the Diwali week.

Maruti Suzuki India the country’s top car maker also plans to launch a car built on the Alto platform in 2012.

Other auto giants, including Renault, Skoda, Volkswagen and Fiat India, are gearing up to unveil small cars next year.

Such cars constitute more than 70 per cent of around 2.5-million cars sold in the country.

According to analysts, there will be a strong demand for entry-level models as more customers graduate from motorcycles.

“This segment will be particularly important as manufacturers focus on rural/semi-urban markets where the buying power will be lower than the urban locations,” Kumar Kandaswami, manufacturing leader of Deloitte in India, told The Telegraph.

Even in the metros and big cities, the demand for small cars is expected to come from first-time buyers such as young professionals feeling the pressure of rising loan rates and high fuel prices.

Industry players said Hyundai was planning to price its Eon lower than Rs 3 lakh, while Maruti’s replacement of the 800, named Cervo, could come for Rs 2.5 lakh.

French car maker Renault is gearing up to compete in the mass market with its new car based on the same V-platform that underpins the Nissan Micra and Sunny.

“We will launch our small car in India by next January,” said Len Curran, sales and marketing vice-president at Renault India. The car is expected to be priced at around Rs 3 lakh.

Germany’s Volkswagen is evaluating the possibility to bring in the Up! showcased at the Frankfurt Motor Show 2011.

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