Aiming to further strengthen its leadership position in the compact car segment, Maruti Udyog Ltd launched the new Zen, called Zen Estilo, on Tuesday.

The Zen Estilo, which will go on sale from Wednesday, is available in four variants priced between Rs 3,19,403 and Rs 4,02,403.

"Young people in India today desire products with contemporary styling and international appeal," the Maruti Managing Director, Mr Jagdish Khattar, said. "The new Zen will appeal to this new India."

The new Zen Estilo, based on Suzuki's MR Wagon, is roomier than the original Zen and comes with a bigger engine (1061 cc). It has an option of advanced features such as ABS and airbag in the top end variant.

Aggressive pricing

Maruti's engineering team, which had earlier collaborated with the Japanese counterparts in Suzuki Motor Corporation to design the Swift and also face-lifted the WagonR, has worked on the Zen Estilo as well.

In preparation for the Zen Estilo, MUL had withdrawn production of the first generation Zen about eight months ago. The earlier Zen had sold 7,62,000 units until Maruti discontinued production in March this year, after 13 years.

The Estilo's aggressive entry-level pricing pits it against models such as the Hyundai Santro and Tata Indica. It may also cannibalise sales from some of Maruti's own models, including the Wagon R.

Maruti is spending more than Rs 9,000 crore to expand capacity and sell five new models in the next five years, as competition increases from existing as well as newer players in the market. Car makers such as Renault, Volkswagen and BMW are in the process of setting up facilities in India, while existing players such as General Motors are investing in creating new capacities to launch newer models (including compact cars) in the fast growing domestic market.