"While the designs have been practically frozen, the company is currently in the phase of trying out the early prototypes," Telco said in a statement.

Indian newspapers said last week Telco was working towards launching a mid-sized passenger car.

"Telco is confident of being able to deliver onthe expectations of the discerning car customer at the premium end...," the company said.

"Tata Engineering wishes to clarify that there is no move on its part to change the design or the specifications of its proposed large car so as to move away from the premium segment for which it has been targeted, as reported in a section of the press today," it added.

A business daily said on Thursday that Telco was re-evaluating the proposed car's design to contain its price within the Rs 5 lakh-6 lakh range.