Tata Motors' new car priced lower than rivals to revive India sales

MUMBAI/NEW DELHI Tue Aug 12, 2014 8:30am EDT

MUMBAI/NEW DELHI Aug 12 (Reuters) - India's Tata Motors Ltd will begin selling its new passenger car from Tuesday, its first offering in four years, in a bid to regain market share and plug losses in its domestic business, which was also hit hard by a slowing economy.

The car, named Zest, is a compact sedan built on a new platform and, in a departure from previous models, boasts user-friendly features such as touchscreen control panels.

The factory gate price in Delhi, before taxes, for the base level, petrol variant of the Zest is 464,000 rupees ($7,593), while the top-end variant costs 599,000 rupees, said Ranjit Yadav, Tata Motors' head of passenger vehicles.

The car is priced lower compared with compact sedan models sold by rivals Hyundai Motor Co, Honda Motor Co and Maruti Suzuki India Ltd.

"We will start to gain some volumes in the personal (car) segment, where we did not have adequate representation... this starts to correct all that," Yadav told Reuters on Tuesday at the launch.

Tata, India's biggest automaker by revenue, dominates the trucks and buses segment, but its cars have failed to lure buyers away from local rival Maruti Suzuki and foreign rivals including Hyundai and Honda.

Tata's domestic car sales fell 39 percent year-on-year in the year that ended on March 31 and its market share also dropped to 4.2 percent at end-June from 10.2 percent two years earlier, industry data showed earlier this month.

(1 US dollar = 61.1100 Indian rupee) (Reporting by Aman Shah in MUMBAI and Aditi Shah in NEW DELHI)

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