Pitting itself directly against Maruti Swift Diesel, Tata Motors plans to launch a 1.3 litre diesel variant of its small car Indica with a common rail direct injection (CRDi) engine developed in-house in the next few months.

With this, Tata Motors has fast-tracked its original plans to develop indigenous CRDi technology with Fiat, which is expected to fructify in a year or more. CRDi technology is the latest efficiency-boosting technology for diesel cars.

Indica is currently available in 1.4 and 1.2 litre diesel variants that use direct injection technology and a 1.2 litre petrol model.

The new offering will be priced at least Rs 1 lakh (Rs 100,000) cheaper than the recently launched 1.3 litre Swift Diesel, which costs Rs 4.68 lakh (Rs 468,000) (ex-showroom, Delhi).

After the launch, Tata Motors will have over 20 variants of the Indica available in both petrol and diesel in the price band of Rs 2.53 lakh (Rs 253,000) to Rs 4.11 lakh (Rs 411,000) (ex-showroom, Delhi).

Tata Motors uses indigenously-developed CRDi engines, branded Dicor, in the Tata Indigo and the Tata Safari.

The Tatas are also working with Fiat to indigenously produce a CRDi engine through a Rs 4,000-crore (Rs 40 billion) joint venture called Fiat India Private Ltd, which might be used in the Indica and other models. However, a spokesperson of Tata Motors declined to comment on any of the issues.

Maruti's Swift diesel is also fired by a Fiat multijet engine and is the first real threat to the Indica stronghold.

Tata Motors sold 1,03,078 Indicas (all versions) till December 2006, capturing 13.4 per cent market share of the total market and over 50 per cent in the diesel segment.