Mahindra & Mahindra Ltd, the country's largest utility vehicle maker, will roll out a sub-four metre compact model of Verito, the rechristened Mahindra Logan, which is expected to attract only 10 per cent excise duty instead of the earlier 22 per cent. Also, it will have a lower price tag.

The car is expected to be launched in six to eight months said Arun Malhotra, senior vice-president (sales and customer care).

In April 2010, M&M bought out Renault's 49 per cent equity stake in Mahindra Renault Private Ltd, renamed Logan as Verito and released it in the market with the new badging and minor facelifts a year later.

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The four-metre sedan, priced at Rs 5.6-6.7 lakh for the diesel version and Rs 4.5-5.4 lakh for petrol, reported poor sales of only 2,000 units last year, while sales went up to touch 5,000 units for this April-July.

"Besides an improved version of Verito, we will soon start working on the Verito compact model. Whether it will be a notchback, hatchback or a combination of both, it is too premature to predict. It depends on the features that we plan to add. It, certainly, will not be a three-box (with a separate boot)," Malhotra told Business Standard.

M&M is currently in a 'hand-to-mouth' situation in terms of Verito production at its Nashik plant, he said, adding that the company would enhance the production capacity once the new compact version hits the Indian roads.

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Malhotra, however, refused to spell out any figures related to the capacity expansion.

M&M's passenger vehicles and UV sales, including Scorpio, Bolero, Xylo, Thar and Logan, for the financial year ended March 2011 stood at 179,213 units as compared to 156,058 units last year.

The passenger UV division comprising Scorpio, Bolero and Xylo, sells 15,000 units per month.

"Our market share gained five-six per cent in the passenger UV segment, where there are players like Tata Sumo, Safari, Innova and Tavera, during the April-July period of 2011. We were 54-55 per cent last year. Though retaining this is a challenge, we will definitely try to sustain this growth, if not increasing it, this year," he said.

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Malhotra said the company was looking at increasing the production of Thar, an off-roader from its arsenal, at its Nashik and Mumbai plants, which currently have a combined capacity of 550 units per month. Thar was launched in January this year, and is priced between Rs 5 lakh and Rs 6 lakh.

"The rugged, solid off-roader, which reinforces Mahindra's DNA, is aimed at a niche market and we haven't set any sales targets as such. There is demand but we are not able to sell more because of production constraints. Thar is not a volume-driver but an image driver. We, however, will try to ramp up even in this recessionary environment," he said, adding that the company was planning to launch its world-class, upper-end sports utility vehicle (SUV), coded named W201, in the next two to three months," he said.