NEW DELHI, Nov 27 (Reuters) - Indian carmaker Maruti Udyog Ltd launched a new-look version of its Zen compact car on Thursday and said the redesign was the first step in parent Suzuki's plans to make India a development hub for compact cars.
New Delhi-based Maruti said the new look -- which includes new headlamps, tail lamps and front grills -- was the first among its plans to redesign its 10 models.
The Zen was introduced in India in 1991 and this is Maruti's first attempt at car redesign, until now carried out in Japan by Suzuki .
The Japanese firm holds 54.2 percent of Maruti, which has a dominant 50 percent share of domestic car sales of 542,000 units a year.
Jagdish Khattar, Maruti's managing director, told a news conference the company had spent between 350 to 400 million rupees ($7.6-8.7 million) on the redesign, nearly half of what it would have spent if the makeover had been carried out in Japan.
"This is the first step in Suzuki's plans to make India the engineering hub for compact cars for Asia, outside Japan, by 2007," Khattar said.
Maruti, whose small, low-price cars crowd Indian roads, spent 220 million rupees on research and development in fiscal 2002/03 and the Indian R&D centre employs about 40 engineers.
India is gradually growing in importance as a maker of compact cars. Suzuki is already selling Maruti's Alto model in Europe and earlier this year South Korea's Hyundai began using its India plant as an export hub for small cars.
The compact car segment, which made up 54 percent of India's new car sales this year, is the most competitive. Apart from the Zen, Maruti also makes the Wagon R and the Alto which are positioned in this segment.
Khattar said Maruti had also begun work on designing a new car from scratch but did not say when it would be launched or in which segment it would be positioned.
Even though Maruti, which completed a blockbuster IPO in June, dominates the local car market it has faced intense competition over the past five years from new entrants -- Hyundai , Fiat and local firm Tata Motors .
Company officials told the conference the new-look Zen, priced identically to the older one, would help boost its sales by 10-12 percent from an average of 5,000 units a month by attracting a greater number of young buyers and women.
The new-look Zen is priced between 332,000 and 390,000 rupees.
Officials said about 10-12 percent of all car buyers were less than 30 years old while 20 percent were women. ($1 = 45.9 rupees)