The next generation Indica would coexist with the existing generation Indica[now this is becoming the latest fad amongst manufacturers here hopefully someone puts an end to this] only the trims of the present generation Indica would be reduced so that it does not cannibalize sales of the newer generation one. It would be at the higher end of the compact cars market[meaning it would take on the Maruti swift and the Skoda fabia].The newer generation Indica would hence have bigger dimensions than the existing one and also quality of interiors would see an improvement.It would have modern common rail diesel engines.
Since the Indigo sedan shares platform with the Indica expect the next generation Tata Indigo to go upmarket as well.
Tata, along with joint venture (JV) partner Fiat, would start producing some of its new-generation products, engines and transmissions and also Fiat products such as the Grande Punto and Linea at the Ranjangaon plant soon.Tata plan to launch/market the Grande punto and Linea by next year[2008].
[Source:Sify.com]