The speculation was started by a Japanese magazine. It had published an artist's imagination of Toyota's low cost car.
According to the magazine the car is expected to have a 2-cylinder 800 CC engine. It could measure 150x1535x1600 (LxWxH) and might come with a price tag of Rs 2.5 lakh.
The car will have a mileage of 30kmpl and due in 2012, claims the magazine.
According to a senior Toyota official the company may look at launching more than one compact car model for the domestic market.
"Our current (Indian) market share in passenger vehicles is 3 per cent. In the next fouryears, we hope to sell three times our current volumes. And by 2015, our rate of growth will be in double digits," said Dato Akira Okabe, senior managing director and member of the Toyota Motor Corporation board.
However,the information provided by the magazine is highly speculative and the company has made no announcements in this regard.
Photograph: Toyota electric car.