But most of the other critical components would be locally sourced from Indian manufacturers, Skoda Auto's director of Indian operations Imran Hassen told UNI here.

The company is, for the purpose, facilitating around 20 of its global vendors to set up shop in India. ``We have identified a certain percentage of components to be localised immediately with the commencement of operations in India...These do not include powertrains,'' Hassen said. Skoda would meet all its obligations under the memorandum of understanding it has to sign with the Directorate General of Foreign Trade in India, he added.

The powertrains would initially be imported as kits and assembled in the vehicles to be produced here. ``It does not make sound business sense to start local production of engines so soon. We need greater sales figures for the purpose.'' Thecompany intends to produce around 1,000 units a month initially and hike it up later to meet demand.

The car, which is likely to hit the streets by the end of first quarter of the year 2000, would be introduced initially in a sedan version.

The car would sport both petrol and diesel engines. ``The diesel option would be powered by a 1900cc turbo-diesel engine. However, the powertrain for the petrol-driven model is yet to be finalised. It would sport either a 1600cc or bigger engine. Later we might also look for a smaller engine on the car.''

It may be recalled that Skoda was initially planning to introduce two models from its Indian subsidiary -- Felicia and Octavia. But with the Felicia being phased out the world over, the company is now concentrating only on Octavia as the launch model for India.

Octavia, he said, would be priced at the upper level of the mid-size car segment.