NEW DELHI: After launching a slew of premium hatchbacks in India, Hyundai is now preparing to introduce a small car priced below Rs 3 lakh. The car, to be called Eon, will compete against Maruti Suzuki's best-selling car Alto.

Expected to hit Indian markets between October 10 and 15, days ahead of Diwali, the car is likely to sport a price tag of Rs 2.50 lakh.

Eon will be an entry-level car but at the same time it is likely to be spacious with a large boot. The car is likely to be powered by an 814 cc engine with a mileage promise of over 20 km per litre.

Based on the Santro platform, it is likely to use a lot of components from both the Santro and i10.

Besides Hyundai, other car makers are also lining up new launches for a pie in the hottest (by volumes) segment. Tata Motors is developing a car sized between Nano and Indica. Volkswagen's 'Up' is also expected to debut in India by next year. And encouraged by the success of Figo, Ford is developing another car below Figo's price point.

Though auto sales have slowed down because of rising interest rates and petrol prices, sales of small cars are still robust, meaning small cars are still 'big' in India.