Suzuki will launch by spring a new minivehicle featuring fuel economy in the same league as hybrids.

Priced around JPY900,000 to JPY1m, the revamped Alto Eco is 20kg lighter than its predecessor, thanks to a reduced parts count and a revised body design, the Nikkei said. It incorporates a number of Suzuki’s environmentally friendly technologies, including a regenerative braking system and an idling-stop system. The new version travels 33km on a litre of petrol, up from 30.2km.

A motorist who drives the minicar 10,000km a year could save JPY4,200 to JPY4,500 on fuel compared with the existing version or Daihatsu’s Mira e:S, assuming petrol prices of JPY150 per litre.

Suzuki will also launch in the spring a successor to its popular Palette micro-minivan. The product is 100kg lighter and boasts a fuel economy of 29km per litre, the best among comparable models in the market.

Suzuki has decided to introduce multiple minivehicles with enhanced fuel economy because it expects the market for such products to grow if they offer the same level of efficiency as hybrids at a lower price, despite their more cramped cabins.

Competition in the minivehicle market is intensifying with Honda releasing the popular N-Box series in 2011 and Nissan and Mitsubishi planning to launch new products as early as June.

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Suzuki now sells subcompacts in overseas markets including India. It will apply the technologies used in its Japanese minivehicles to strategic models in Asia as well.