The launch of the Rs 1-lakh ($2,500) car by the Tatas is clearly making other global car manufacturers work out competetive strategies. Eyeing the low-cost small-car segment, South Korea?s Hyundai Motor Co said on Tuesday that it was also studying the development of a car priced at around $3,500. Even as Hyundai Motor said that its low cost car will not compete with the Nano, it is clear that the concept of the low-cost car is catching fast with car manufacturers having significant presence in Indian and Chinese markets.

Speaking at the sidelines of the Geneva Motor Show, HS Lheem, president and chief executive of Hyundai?s Indian operating unit said that the low-cost car from Hyundai?s stable should not be seen as a rival car to Tata?s Nano. ?The concept being followed by Tata Motors is totally different as they are targeting motorcycle users. In contrast, the low-cost Hyundai vehicle under study will more likely compete against proposed vehicles in the same price range from Nissan-Renault to Indian motorcycle maker Bajaj Auto Ltd.?

Lheem said that the Hyundai vehicle would mainly target the Indian market and could also be made available for sale to China or other Asian markets. Small cars in India make up more than two-thirds of sales of passenger vehicles, which are expected to nearly double to 2 million units by 2010. Other carmakers like Toyota Motors and Fiat have also expressed interest in a low-cost small- car to target rapidly rising middle-class incomes in emerging markets.

Hyundai Motor Co also unveiled its i-Mode concept car, a mid-sized crossover utility vehicle, at the Geneva Motor Show on Tuesday. Tagged as the one that significantly cuts emission levels, the new vehicle was one amongst the 15 models that Hyundai showcased at the auto show, which features various concept and production cars with energy-efficiency and environmentally-friendly functions.

?The travel for this story was sponsored by Tata Motors