For India, this is the year of the small car, with the launch later this year of the world’s cheapest car, Tata Motors’ Nano, priced at just over Rs 1 lakh. This small car will have company at the premium end, too, with European majors bringing in their premium small cars, starting with the Fiat 500. It will be joined later this year by Volkswagen’s New Beetle, and even perhaps by the BMW-owned marquee Mini. The New Beetle and Mini are expected to carry price tags of around Rs 20 lakh.

“As there is a positive demand and ‘pressure’ from the Indian market, we will be importing the New Beetle,” Andreas Prinz, managing director, Volkswagen Passenger Cars, said in an email to ET. “Thanks to the import duties in India, the car will be priced at approximately Rs 20 lakh and will be imported as a completely built-up unit (CBU). Due to the small numbers, we would restrict it to a single engine. Therefore, we are currently analysing which engine will be best suited for the import,” he added.

“We are looking at a possible market introduction more towards the end of this year, because we have to homologate the New Beetle in order to avoid penalties to be paid,” he added.

Fiat India is furthest along the road to launch a small car, with Rajeev Kapoor, CEO, Fiat India, hopeful of a May launch. “The Fiat 500, and the Bravo, are already under homologation, which usually takes three months. So, we expect to start selling the Fiat 500 from May,” Mr Kapoor said.