Tata Motors announced on Friday to launch Rs 100,000 car in early 2008, as the company has completed its styling and designing.

The framework of Tata Motors’ Rs 1 lakh car is now over and the company is now testing its prototypes in its plants, Tata Group Chairman Ratan N Tata said.

In a letter to company shareholders, Tata Group Chief Ratan Tata said that the launch of the car would create a new example in low-cost personal transport, carve out a new market segment and reach a broader base of the pyramid.

About the features of the future car, Tata Said, “The styling and designing of the car have been completed and prototypes are being tested in the plant. It will be a rear engine, 4-5 seat, four-door car with about a 30 horsepower engine."

The car will be launched in early 2008 and it will be exceptionally attractive to Indian consumers, especially the younger families, at a price level of nearly Rs 100,000, Tata asserted.

Stating that augmentation fuel costs were straining the automobile industry in both commercial vehicle and passenger car segments, the Tata group chairman called for more fuel-efficient engines. “Tata Motors, like other automobile companies, is exploring various new technologies to meet the new challenges arising from spiraling energy costs,” he added.

Tata Motors has also decided to raise funds worth Rs 3,000 crore by way of shares to finance its future plans. The company, which earned revenue of Rs 24,000 crores in last fiscal year, is planning to spend around Rs 10,000 crore in the next three-four years towards new product development, capital expenditure in capacity enhancement, plant renewal and modernization. It is also looking at significant growth opportunities via mergers and acquisitions in connection with company products.

On company’s tie-up with Fiat, Tata said in the coming months in the commencing years both companies will develop new models which could be bagged and sold by both companies in different geographies. “The discussions (with Fiat) also include the possible sharing of manufacturing facilities at the plants of both companies,” Tata said.

However, Tata witnessed a slowdown in the first quarter of the last fiscal, still it saw an upturn towards the end of the year as the government announced a reduction in excise duty on small cars, the automobile company said.