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Manesar plant of Maruti Suzuki India LTD, that has experienced labor unrest from the month of June, is trying to roll out a new compact car for getting the benefit of reduced tax rates on models, which are short than 4 meter in length. Manesar plant of Maruti Suzuki that recently introduced swift hatchback since the protest of the workers began on the 29^th August is testing the sub-4-metre car built on the swift platform to introduce in the month of January during Delhi Auto Expo according to the company officials.

A-star hatchback and SX4 car is made by the Manesar factory. Manesar factory produces 1,200 cars a day. Swift 3.99, the new car is developed by investing the amount of almost 500 crore. This car is being developed to target at markets outside India since people living in Latin America and Europe like fuel-effective and small cars as the slowdown in the worldwide economy lessens the gains. Minimum 20 cars are there including a few left-hand drives meant for overseas markets. It has been suggested not to take the picture of the car.

“We have started the trial runs,” said an official at the plant, who did not want to be named and refused to share more details. A formal name for the car has not been decided. “If the trial runs have started, then it is quite possible that we may see the car much before the Auto Expo,” said Shapur Kotwal, deputy editor, Autocar India magazine.

This car will come with a 90 bhp engine in both diesel as well as petrol versions. The chief difference is reduction in the boot space if compared with swift Dzire. Interiors are rather same to the new swift. It has been planned by Maruti Suzuki Company to launch a short version of the Dzire that is 4.16m long  to gain the advantage of lower exercise tax, a move, which will give it room to be price-competitive. The current ex-showroom cost of this Dzire is around 4.94 lakhs. But the compact Dzire is priced nearly 4.49 lakhs.

The attenuation of Dzire is going to help the company Maruti Suzuki fend off the challenge from affordable models like Indigo cars of Tata Motors Ltd and Etios of Toyota Motor Corp at a time when great interest rates on many automobile loans have depressed the purchasers of the car. “Etios sedan, which sells at less than Rs.5 lakh, is a threat to Dzire,” said an industry expert, who did not want to be named.

P. Chidambaram, the finance minister gave great advantages to small cars in the year 2006 Union budget for enhancing the local production and promoting India as a worldwide small-car production center. The new Dzire will come with 1,250cc diesel engine and 1,200cc petrol, which meets the engine dislocation criteria. Tata Motors in the year 2008 was the first company to take the great advantage of the tax incentive for their small cars by launching their Indigo CS model.