After replacing its mid-size sedan and premium hatchback (the Manza and Vista) with thoroughly overhauled versions, namely the Tata Zest and soon-to-be-launched Tata Bolt, the company is now doing something similar with its products one segment lower. The Indica eV2 hatchback and Indigo eCS compact sedan will eventually be replaced by heavily revamped versions of themselves, and will sit below the Zest and Bolt in Tata’s line-up.

Known internally as the Kite (the Zest and Bolt were codenamed ‘Falcon’), the hatchback version was already spotted on its test run a little while ago. Now, however, reader Hrishikesh Khasgiwale from Pune has managed to capture a photo of the compact sedan being put through its development tests. You can’t tell a lot from this photo, and the tail-lights on this test mule aren’t the production-spec units, but the roofline, rear windscreen and bumper are what give it away as the new Tata compact sedan.

There’s a lot to be excited about with this new Kite sedan as, like it did with the Zest, Tata will seriously rework just about everything on the Indigo eCS. As a result you can expect a better ride and handling mix, improved interior design and quality and lots more equipment. Styling will also be a big focus on this car, and though the overall shape might be similar to the eCS, expect there to be many attractive details, and a family resemblance to the likes of the Zest.

On the powertrain front, there’s interesting news. There will be an all-new 1.2-litre petrol engine that Tata is developing in-house, as well as a new 1.05-litre, three-cylinder diesel engine, which is a derivative of the company’s 1.4-litre DiCOR diesel engine. And aside from the standard manual gearbox, don’t be surprised if Tata equips the Kite sedan with an AMT automatic gearbox as well.

With the Zest compact sedan, Tata was able to offer a lot of equipment and a premium looking interior at a relatively affordable price point, making for great value. This new Kite compact sedan will be offered at an even lower price point, and alongside its hatchback counterpart, is poised to make a big impact in the budget sedan segment when it hits the market by the end of next year.