Maruti Udyog, the country's largest carmaker, plans to roll out its first fully indigenous car by 2007. "The new car will be developed by the company's research and development department and will be ready in the next three years," the company's managing director, Jagdish Khattar, told Business Standard.

Until now Maruti Udyog has introduced models developed by its Japanese parent, Suzuki Motor Corporation, though changes have been introduced to suit local conditions. Suzuki now wants to make Maruti Udyog its hub for all of Asia.

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Though the exact amount of investment in the venture is not known, Khattar said this would be a part of the Rs 6,000 crore (Rs 60 billion) investment announced recently by Suzuki. The R&D work on the new car will take place at the new facility planned in Manesar, Haryana. The investments planned in Manesar include a test track.

According to Khattar, a fully indigenous car is the next logical step in the development of Maruti Udyog's R&D capabilities.

"We have collaborated closely with Suzuki Motor for the new car that we will introduce next year. Around 30 of our engineers were in Japan and were closely involved in the car's development," he said, adding, "This is a first not just for Maruti Udyog, but for any company in India: helping the parent design and develop a new product."

Over the years, Maruti Udyog has developed the capability to give a facelift to existing models like the WagonR, Zen and now, the Esteem.

"Though Maruti Udyog's old models enjoy strong brand equity for their performance and low cost of ownership, the vehicles looked too familiar. But with its face-lift capability, the company has eliminated this bugbear," said a Maruti Udyog official.

Automobile industry experts said this meant that Maruti Udyog's line-up for India would not be restricted to models in the Suzuki stable or the drawing board.

"For vendors and suppliers, it means they get clued into a new model at an early stage. Their development cycles will shorten. Costs will go down as localisation levels, which were normally achieved three-five years after a model was launched, can now be achieved at launch time," an industry source said.