Tata Motors launched a next-generation sedan Wednesday, part of its effort to build out a Nano to Jaguar car portfolio in India’s fast-growing auto market, which is still dominated by small car sales.

The new Indigo Manza comes loaded with features like Bluetooth connectivity, power outlets for recharging laptops and cell phones, an outdoor temperature sensor and three barrelled headlamps. The car will compete with other mid-size offerings like Ford’s Fiesta, GM’s Aveo, Honda’s City and Maruti Suzuki’s SX4.

“It is possibly our best foot forward,” said Rajiv Dube, president of passenger cars.

It is also a far cry from the stripped-down $2,000 Nano Tata launched in March.

The Manza is a bid by India’s largest automaker to deepen its presence across the car-buying spectrum -- despite the fact that 76 percent of the cars sold in India are compacts, a situation few expect to change anytime soon.

Tata’s strategy has been to try and cover all the bases. Three months after it launched the ultra-cheap Nano, it began selling Jaguars and Land Rovers to India’s urban elite.

“There is no other manufacturer in the Indian market offering such a comprehensive range of products,” Dube said.

Since April, Indians have bought 117,863 mid-sized cars, a rise of 3.2 percent from the same period last year. But they purchased 523,038 compact cars, 22.7 percent more than during the prior period.

Even Dube doesn’t expect that to change soon. “I don’t think the complexion of the market is going to change dramatically in the ensuing years. The Indian market is going to continue to be a small car market,” he said.

India, where just eight people per thousand own a car, is still largely a nation of first-time car buyers. Since April, 4.5 million scooters and motorcycles have been sold in India -- 6.5 times the number of cars. As India’s rising middle class graduates from two to four wheels, they’re far more likely to be able to afford Tata’s diminutive Nano than the 480,000 rupee ($10,000) Manza sedan -- even if the sedan is cheap for its class.

Vaishali Jajoo, an auto analyst at Mumbai’s Angel Broking, said that as India’s GDP grows Indians will gradually climb into bigger, pricier cars -- the kind U.S. automakers have long excelled at making. But that’s a long way off.

“There are still a lot of first-time car buyers,” she said. “The growth for a smaller car will be better than for the sedan.”

While Tata Motors, Honda, and Maruti Suzuki all have or will refresh their existing sedan models, almost all the new cars being launched in India are small, she said.

Eleven of 14 car launches planned in India for 2009 and 2010 are compact cars, according to Care Ltd., a research and ratings agency based in Mumbai.

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