The Xcent, which will take on the likes of Maruti Suzuki Dzire, Honda Amaze along with Tata Motors' upcoming Zest, will be available in two engine options of 1.2 litre petrol and 1.1 litre diesel.
At present, Maruti's Dzire is the segment leader and is priced between Rs 4.85 lakh and Rs 7.32 lakh (ex-showroom, Delhi).
The Xcent is the sedan version based on the same platform as the compact car Grand i10, which HMIL had launched in September last year.
"Developed with the best of Hyundai Motor's world class technologies, Xcent will create a new benchmark in terms of quality, design, space, features and driving pleasure in the compact sedan segment. We have invested extensive effort in competitively pricing Xcent to offer excellent value," said B S Seo, Managing Director and CEO, Hyundai Motor India Ltd.
With the launch of this model, the company is hoping for a positive sales growth this year after witnessing an overall decline of 1.2 per cent at 6.33 lakh units in 2013.
The new model will complete HMIL's portfolio in the sedan segment from entry level sub-four metre to the premium executive.
"The compact sedan segment has been one of the major drivers of the Indian car market with about 24,000 units a month. We believe the segment will continue to grow and Xcent will further increase the growth," HMIL Senior Vice President Rakesh Srivastava told reporters here.
HMIL has a total production capacity of 6.75 lakh units annually at present and aims to utilise it fully. While the company is focussing on the Indian market, it also plans to export the Xcent in due course of time.
This model is among the four new models that the company plans to launch in the next two years, including a compact sports utility vehicle (SUV), to enhance its position in the market.
Srivastava said Xcent would help the company further consolidate its position in the domestic market.
"We are the second largest car manufacturer in the country and we are hungry for volumes and market share. Last year our share in the country stood at 20.7 per cent. We believe Xcent would help to add to this market share further," he added.
Xcent's main competitors are Dzire, which clocks around 16,500 units per month and Amaze which sells around 5,000 units per month currently.
Tata Indigo, which sells around 2,500 units and Mahindra's Vibe are the other cars in the compact sedan segment, which is estimated to around 24,000 units per month.
Srivastava said the company has enhanced its production capacity to 6.8 lakh units per annum from the earlier 6.3 lakh units.
"We can further enhance it to 7 lakh units. The hike in capacity would help us in reducing waiting periods of various products," he added.
The company sold 3.8 lakh units in domestic market last year, while 2.53 lakh units were exported to global markets.
Commenting on the recent excise duty cut, Srivastava said the move would help the industry grow in the current year.
"It is a welcome step on the part of the government. It will definitely propel growth in the domestic car market, which is expected to grow in single digits this year," he added.
When asked about the launch of a compact sports utility vehicle, Srivastava said: "We are not looking to launch the compact SUV this year. But this segment definitely interests us."