Daewoo has also kicked off a new positioning for Matiz - ``Total S.P.I.C.E''- an acronym for Safety, Power, Innovation, Comfort and Economy.

The campaign, handled by Enterprise Nexus, will position Matiz as the ``best-value car''.

Said Daewoo Motors India chairman S G Awasthi: ``Our market research has indicated a distinct consumer aspiration for a power steering. We're addressing this by offering an enhanced price-value equation.''

The company has dispensed away with features like music system, power windows and rear window defogger in the new models.

Besides power steering as a standard feature, the new variants will also be equipped with anti-theft systems (ATS).

With a ticket of Rs 3.43 lakh, the SG Matiz is very aggresively positioned against the competition. The new price-power equations: Hyundai's Santro LS with power steering costs Rs 3.81 lakh (price differential: Rs 38,000); the non-power steering Zen VX costs Rs 3.92 lakh (price difference: Rs 49,000); the non-power steering Wagon R costs Rs 4.10 lakh (price difference: Rs 67,000), Indica LXI which costs Rs 4.8 lakh (price difference: Rs 75,000).

Despite undercutting the competition, Awasthi insists: ``We are working on positive margins.''

Commenting on the new launch, motoring critic Murad Ali Beg says that the Daewoo's new price initiative may herald a price war. He added: ``The power steering is beginning to emerge as a significant differentiator. A couple of months ago, Santro offered power steering with no additional cost and positioned it as Zip Drive. By offering attractive pricing and additional feature like an anti-theft locking system, Daewoo seems to have chalked out an aggressive strategy with a new positioning of Total Spice.''

Daewoo expects the momentum to shift in favour of the new SG away from the SD variant, which currently accounts for around 70 per cent of all Matiz sales. ``We expect even distribution across various Matiz variants,'' said Byung-Soh Min, deputy managing director, Daewoo. According to Beg, ``The new model will help Daewoo move up the value-chain (and maximise revenues) and attract new buyers.''

As for launching products in the upper segment and luxury segment, Awasthi said the company will take a decision on new products after corporate restructuring of the parent company in South Korea.

Also, Ford, which had last week completed the due-diligence of Daewoo India's business, will be having a board meeting on September 15, 2000 to discuss operational intergation.

Awasthi said that earlier when it responded to market feedback by launching three variants from only one model of Matiz (which was perceived as over-priced), Matiz sales zoomed up by an unprecedented 50 to 60 per cent.

Daewoo has sold 60,000 cars during October 1998 and July 31, 2000. In the last four months it sold around 19,000 cars in the domestic market and 1,300 in the overseas market. Said Awasthi, ``We will meet our sales target of 80,000 cars in the fiscal 2000-01.''

Awasthi said that Daewoo will expand its dealership network of 90 with an enhanced focus on upcountry and semi-urban markets, which are already accounting for around 30 per cent of the company's car sales.

He added that the company will aim at increasing its marketshare in metros from around 23 per cent to 27 per cent in the current fiscal.

Daewoo is targeting a turnover of Rs 2,500 crore in the year 2001-02 up from Rs 1,300 crore (unaudited) in the year 1999-00. ``We expect to break-even in the year 2001,'' he said.