The company plans to take competition head on with two models in the small car segment-the popular Zen and the Wagon-R, a hybrid between a car and a van. The Wagon-R will be positioned as a multi-utility vehicle, sources said. At the time of the roll out the model will have an indigenisation level of around 65 per cent. Officials said the company is expediting the customisation process of the model to suit local conditions.

In 1999-2000, Maruti plans to produce around 1,250 units of Wagon-R which would subsequently be increased in a phased manner to 8,000 units by 2000-2001. Wagon-R stands out with its tall and upright body design with the wheels set in the extreme corners of the vehiclebody. Officials said Wagon-R has been a top draw in the Japanese automobile market for the year 1999 with sales of 1,49,585 units in the first eight months of 1999. Launched in Japan in 1993, it achieved record-breaking sales of 500,000 units in little over three years.

The Wagon-R is part of the three new models that Maruti is expected to unveil over the next one year. The other models to hit the road next year are the 1,600cc Baleno and the 1,000cc Alto. Baleno would occupy the premium mid-segment space while the Alto will be an upgrade of the existing small car, Zen. Maruti has recently signed an memorandum of understanding with the Directorate General of Foreign Trade to import completely knocked down and semi-knocked down kits worth over Rs 550 crore over the next five years for use in their new models.

The company is already in the midst of upgrading its production facilities by fully commissioning its third plant by December 1999. With this, Maruti will have a capacity to roll out around 4,50,000vehicles in 1999-2000, up from present capacity of 3,50,000 vehicles. The company is investing close to Rs 1,200 crore to expand the production capacity and a similar amount to introduce the new models.