Honda's small car Brio at under Rs 5 lakh in 2011

Japanese auto giant Honda Motor Co unveiled on Tuesday the prototype of its small car 'Brio', which will be introduced in India in 2011 with a price tag of less than Rs 500,000.

The company said it will use the vendor base of its two-wheeler business in India to make the car price competitive.

"This car has been developed for Thailand and Indian markets. While the basic design is same, the vehicle has been tailored to meet requirement of each market," Honda Motor Co president and CEO Takanobu Ito told reporters in Bangkok.

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He said mass production of the car will start in Thailand in March, 2011.

Commenting on the Indian launch, Ito said: "In India, we want to launch the car within 2011, with price less than Rs 500,000.

"To make 'Brio' a competitive product, the company, which is present in India through a joint venture with the Siel Group, is looking to localise 80 per cent of the components.

"For this vehicle, Honda will leverage the resources that it has cultivated through its motorcycle business and utilise local sourcing of parts and materials such as sheet," Ito said.

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The company operates its two-wheeler business through the wholly-owned subsidiary Honda Motorcycle & Scooter India, which has a manufacturing facility in Haryana and currently constructing the second plant in Rajasthan.

It is also reportedly scouting for location to set up a third facility. Honda also has a two-wheeler joint venture with the Hero Group.

Both the partners hold 26 per cent stake each in Hero Honda, India's largest two-wheeler maker.

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Elaborating on the strategy to promote 'Brio' and other Honda products, Ito said: "We have a strong passion to reach a wider customer base for our products. To accomplish this, we have focused on creating an attractive package at an attractive price."

Earlier, the company had said that it will introduce two versions of the Brio based on this prototype.

The company has a manufacturing facility at Greater Noida in Uttar Pradesh with an installed capacity of one lakh units.

It had later committed an investment of Rs 1,200 crore (Rs 12 billion) to set up the second manufacturing facility at Tapukara in Rajasthan, with an installed capacity 60,000 units per annum.