Maruti plans to take its traditional Japanese rivals - Toyota and Honda - and the main competitor Hyundai India Motor heads on through its maiden foray into the premium D segment.

The car market leader will launch its new Baleno, scheduled to hit road in May 2008.

Similar to the marketing strategy for the new Zen Estilo, which replaced the last generation Zen, Maruti is now eyeing the Baleno for a complete changeover.

Drawing ambitious plans for a stronger presence in all passenger car segments, Esteem will remain the main focus in the deluxe C segment. Baleno will be positioned a grade higher, catering to the premium D segment. Shinzo Nakanishi, chairman, Maruti Udyog [Get Quote], said, "We have ambitious plans for India that will not limit us to the small cars player only. In the next few years, we will launch products across all segments produced by our parent company, Suzuki Motor Corporation."

"The new Baleno rollout will mark our entry into the premium D segment. The all new sedan will establish Maruti as a strong bidder in this premium segment with its clean sophisticated look," he added.

The new car expected in the price band of Rs 750,000-850,000 ex-showroom (Balone comes at Rs 540,000 in Delhi now) and will be based on the mini SUV - super SX 4 platform - with the current 1.6 litre Baleno engine.

The carmaker is also planning to launch the diesel version and may opt for the 1.9 litre multijet diesel engine, which it will be sourcing from its technological partner Fiat SpA of Italy and will be manufacturing at its Manesar facility.

"There is growing preference for diesel car in India. If we have the right engine option and the feasibility of using it in the new Baleno, we can go ahead with it also," Nakanishi said.

The new car will be pitted against the Toyota Corolla, Honda City, Hyundai's Verna and Elantra, Chevrolet's Optra and SRV, Ford's Fiesta and Fusion, Fiat Adventure, and Skoda Rider.