"The company is likely to revise the introductory prices in the next few weeks due to high cost of raw materials, but nothing has been decided so far," Shinzo Nakanishi, managing director, Maruti Suzuki said.

"Prices of not only steel, but aluminium copper are rising and it is affecting the margins of car makers," he said.

Based on the Swift platform, Maruti has priced this entry level Sedan in Mumbai from Rs 4.70 lakh for petrol and at Rs 5.60 lakh for diesel (ex-showroom), he added. "With the high cost of manufacturing prices, we may have to revise the introductory prices in the next few weeks," he said.

The interest rates are high, financing is difficult, raw material costs are going up and the Sensex is bearish, in such a situation one has to find some alternative to sustain, he said.

"The company aims to cut costs and increase the volume productivity to take advantage of economies of scale," he added.

"Many of our customers are not able to get an entry level sedan. The year 2007-08 will be the best year as Maruti will become a leader in the A3 segment," he said. If demand arises from neighbouring countries like Sri Lanka and Pakistan the company might think of export but not into any other country.

The Dzire offers features like integrated stereo, steering mounted audio controls, automatic climate control and power windows. It also has dual airbags, ABS with EBD, collapsible steering column and an i-cats anti-theft facility and will be available in seven colours.

The company will produce from its Manesar plant which also produces the hatchback version of Swift. The company said that to meet the increasing demand for its diesel cars, it would increase its capacity to 1.7 lakh units from one lakh units by the end of the month. Maruti would raise capacity at Manesar to three lakh units by 2010.