Hamatsu (Japan): India's largest car maker Maruti Udyog (MUL) on October 21 said it was ready to meet any challenge from India's indigenous car maker Tata Motors which has claimed to be working on an entry-level car that would cost between Rs 1.25-1.5 lakhs, much below the largest selling Maruti 800.

"We will meet the challenge", MUL Chairman S Nakanishi told visiting journalists when his attention was drawn to the claim of the Tatas that they would come out with the most economical entry-level car.

"We have heard about Ratan Tata saying he will produce a car for Rs 1.25-1.5 lakh. But, I still believe that Maruti 800 is the most economical car in the world," Nakanishi said.

Emphasising that Maruti 800, which accounts for about 35 per cent sales of the Rs 9,000 crore car joint venture (JV), was still the preferred entry-level car in India, he said, "I do not know if somebody can make it (car costing below Maruti 800). Let us see".

MUL, a JV started between Suzuki Motor Corp of Japan and Government of India way back in 1983, has ruled the Indian car industry on the strength of Maruti 800, which, the company claims to be a "peoples car".

The existing entry-level car saw MUL taking about 80 per cent share of the Indian car market in 1998 with total company sales now touching about four lakh units per annum.

The Tatas, riding high on the success of compact car 'Indica', had reportedly claimed last year that they would produce a small car in the price band of Rs 1.25-1.5 lakh, triggering speculation whether MUL could lose its USP of providing 'people's car' in India.

Suzuki already produces a model similar to 'Maruti-800', Nakanishi said.

Outlining the strategy of MUL, where SMC got over 54 per cent stake in the joint venture after the government closed its option of participating in preferential shares for a consideration of Rs 1,000 crore, the MUL Chairman said his company was banking on reducing costs and enhancing efficiency.

PTI