After it launched Jazz with a Rs. 7 lakh price tag last week, Honda is getting down to action in the small hatchback market — taking on Maruti Suzuki’s monopoly.

The new small car would also match Japanese rival Toyota’s global small car, which is under development.

Honda Siel Cars India is also mulling full-blown engine and gearbox plants in India, company officials said last week. The engine plant would have a capacity to produce 2 to 2.5 lakh engines per year, Masahiro Takedagawa, president and director, HSCI, said.

The under development small car would have India as its ‘lead market’, which means the car would be designed with Indian users mainly in mind.

The plants are expected to be in time for the launch of the new small car, which should be ready by 2012, Takedagawa said.