Amid a race among auto makers to benchmark their smallest car against Tata's Rs 1-lakh (Rs 100,000) car, market leader Maruti [Get Quote] on Tuesday said it has no plans to develop a vehicle with a 660cc engine, positioned below the Maruti 800 and priced at Rs 1.5 lakh (Rs 150,000).

"While Maruti Suzuki commends these various initiatives (plans to develop and offer low-cost cars by various manufacturers), the company has no plans whatsoever of developing or offering a car in the segment below the Maruti 800," the company said in a statement debunking reports that it was ready with a smaller car.

Maruti said that it had no plans to launch a car like the one mentioned in the report. A media release by the company said: 'The project 'Under A' mentioned in the report refers perhaps to the 'A Under,' the earlier code name for the A-Star model.'

The company release said: 'To give a clear and transparent picture on this issue, we are sharing some information about Maruti Suzuki's future model strategy, and our reasons for choosing it. Various manufacturers have made public their plans to develop and offer low cost cars for India. Like the rest of the country, Maruti Suzuki is delighted that some of these efforts have met with success, and at least one such car in this segment is now only a few months away.'

'Maruti offered the first People's Car, Maruti 800, about 24 years ago. Since then, India's middle class and Maruti's customers have grown in every facet of their lives. Their incomes have gone up significantly. Their lifestyles have improved in ways that were hard to imagine a decade ago. Within the space of a generation, the 'people' who bought 'people's cars' have transformed almost beyond recognition,' Maruti said.

'With that, expectations from a car have evolved considerably. Car customers now generally settle for nothing less than contemporary styling, international quality and latest features that enhance their safety and convenience, while expecting performance and fuel efficiency like their parents did before them,' the company added.

'These changing preferences are reflected in the sales data for existing segments in the car market: models and variants that promise only economy and low acquisition cost are increasingly losing out to models and variants that are rich in features and style. We find this trend holds true across segments, including among entry level cars,' the Maruti release said.

'In our experience, our entry level car customers nurture a high degree of aspiration, both in new cars as well as pre-owned. They want more from their cars in terms of features, performance, safety and versatility. Maruti Suzuki has been able to notice and understand this transformation, largely due to its close relationship with customers throughout the period of their car ownership,' the car maker said.

'In future, the company plans to launch World Strategic Models like Splash and A-Star, as part of the same conscious effort to offer international quality and design to Indian customers at an attractive price. Our view is that as Indian middle class families move up in life, they should continue to receive a range of cars from Maruti Suzuki that offer superior quality, international design and rich features. That is where our focus will lie,' Maruti further added.