Tata Motors is set to roll out the next generation of its small car Indica in 2007. The prototype of the 'all new' Indica will be jointly developed by Tata Motors' in-house design team and the Italian design consultancy IDEA.

"Normally it takes three years after the exercise is conceptualised. So 2007 is when the car would be available," said Ratan Tata, chairman of Tata Motors.

The next generation Indica might not completely replace the existing version of the car as Tata Motors is considering the option of retaining the Indica V2 alongside the new version.

"We might do something like Maruti who have been selling both the 800 and the Zen which have basically the same platform," said Tata.

Retaining the Indica V2 will give Tata Motors the option of offering its small car offering at two different price points. While the Indica V2 will continue to sell at the same price proposition, the new age Indica will be positioned a notch higher.

While the changes in the power train (engine and gearbox) and driving dynamics (handling and ride quality) are not known, the next generation Indica will come with a wider wheelbase and more spacious interiors in terms of legspace.