Telco, a company synonymous with commercial vehicles in India, decided to make a midcareer change and enter the passenger car market in 1998. Launched amidst major hype, the Indica was initially caught out by its own success, with quality issues cropping up all over.

However, since the car was revamped in 2000, and rechristened the Indica V2, the monthly sales figures speak for themselves. Today, there are over 200,000 Indicas on roads, and contrary to popular perception, a majority of sales are to private buyers, most Indica taxis are actually lifted from the secondary market.

Telco has now jumped into the midsize segment with the Indigo. And with the prices that they have announced, they believe that they are going to make a big splash. Many believe that Telco cannot make money at that price, yet, Rajiv Dube, vice-president, marketing counters, "We have recouped the entire Rs 1,700 crore investment we made on the Indica, we have very decent margins on both the Indica and Indigo." He even hinted that Telco had room to play with prices, if they got dragged into a vicious price-war.

And that is not all that Telco has up their sleeve. In February, they plan to introduced a petrol-engined 135 horsepower version of their SUV the Safari. Despite the success of the Mahindra Scorpio, Dube believes that the Safari has a substantial niche. In addition, the Indica Sport, which will have the same petrol engine as on the Indigo is expected to hit showrooms by May. And to culminate this phase of 'Project Indica', the estate version of the car - the Indica Estate will be on the roads by August.

However, the question remains, will the Indigo follow the same route of the Indica? V. Sumantran, executive director, passenger cars, Telco, said that lessons had been learnt from Indica, "That is why we did not launch the car until we were absolutely sure of its quality."

Yet, the sceptics remain, both in the industry and the media. However, as one Telco official said, "the market will decide." Can the Indigo give the 70,000 unit per annum midsize segment a boost? Only sales figures can reveal that.

Car prices to go up

MUL, Hyundai, Ford and GM said that they will stick to their decision to hike car prices from next month. The automakers were reacting to reports hinting that they might have to hold back or even reduce prices after the launch of Indigo.