Mumbai: General Motors, the world''s biggest carmaker, has launched its hatchback `Chevrolet Spark'' in India with a starting price of Rs3.09 lakh - nearly Rs 12,000 cheaper than its closest competitor Maruti Suzuki''s Zen Estilo, sparking a price war in the small car segment.

Chevrolet Spark, equipped with a 1000 cc petrol engine and available in four models, has been priced in the Rs3.09-3.89 lakh range.

While Spark would be Rs12,000 cheaper than the Zen, it would come at a premium of Rs39,000 over the base model of Hyundai''s popular hatchback Santro, which is being sold at Rs2.7 lakh (ex-showroom Delhi).

"We have not been represented in the small car market in India and we want to increase our presence in this segment, which is the fastest growing segment in the country," General Motors Corp chairman and chief executive Rick Wagoner said.

He said introducing the small car Spark, one of GM''s most successful models worldwide, was a part of the company''s growth strategy in India.

The company is initially aiming at selling 2,000-3,000 units of Spark a month, which will be rolled out from its Halol facility in Gujarat.

"There will be initial capacity constraints and depending on the demand we will rearrange the product mix to effectively utilise our existing capacity," GM India president and managing director Rajeev Chaba said.

General Motors, meanwhile, said it would be sourcing components worth a billion dollars annually from here in the next 4-5 years. India could also probably emerge as a potential "future candidate" for housing the global manufacturing hub of General Motors, according to Wagnor.

"Our supply base has been expanding. In future, you could see exports out of India. We would probably need extra capacity and India would be a candidate," Wagoner said.

He said the company was currently shutting down plants in North America and focusing on leveraging the emerging high-quality, low-cost supply base.

"We are not only increasing our local sourcing for local usage, we are also looking to source more parts out of India for our global operations," he said, adding at present focus of GM in India, however, would be to increase its market share.

Wagoner, who also called on prime minister Manmohan Singh, said GM expects India to become the second fastest growing car market in the next decade.