Hyundai India is studying cheap small car

A worker inspects a car at Hyundai Motor factory outside Chennai in this August 25, 2006 file photo. Hyundai Motor India, a wholly owned unit of Hyundai Motor Co, is studying the feasibility of building a cheap small car to take on competition, a senior company official said on Thursday.

KOLKATA (Reuters) - Hyundai Motor India, a wholly owned unit of Hyundai Motor Co, is studying the feasibility of building a cheap small car to take on competition, a senior company official said on Thursday.

Hyundai, the second-biggest car maker in India after Maruti Suzuki India Ltd, is looking at building a car priced at between 100,000 and 200,000 rupees ($2,500-$5,000), said Ashok Jha, president of Hyundai India.

Engineers at its research and development centre in Hyderabad were studying the feasibility of such a car, he said, without disclosing details.

Tata Motors Ltd, India's No. 3 car maker, is scheduled to launch a small car priced at $2,500, the cheapest in the market, in 2008.

Renault is studying the feasibility of making a $3,000 car in India with motorcycle maker Bajaj Auto.

Hyundai Motor India, which also makes the Getz hatchback, is aiming at upgraders of its popular Santro small car model with the new i10 car, which is fitted with a 1.1-litre petrol engine.

Hyundai expects to make 220,000 units of the i10, of which half would be exported, Jha said at a news conference.

The company is building a new plant in Chennai to double its annual capacity to 600,000 units by the end of 2008.