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I like
1) Hindustan Ambassador , Its Good,Bad, & Ugly too
2) The Mahindra short chassis Jeep (petrol version) of the 60/70's , Unmatched Ride

Considering the thread is about the 5 best INDIAN cars, I'm surprised so many of us have gone on to include foreign-made cars or those made in conjunction with multi-national companies.
Unfortunately, the sheer lack of interesting domestic cars limits my favourites to just 3. They are:- 1) The Ambassador because that is the quintessential Indian car, despite its British origins. Still a big hit in South India. Brakes & steering haven't been modified in forever though, so it isn't really meant to be a fast car.
2) The Contessa because that was one of the few luxury cars still being produced in the 80s. I know 75 HP isn't impressive but the fact that it beat out most of the others in the market at that time stuck with me.
3) I know that the last, the Premier Padmini, is originally a Fiat model but it's been around for so long (and is still around as a matter of fact) that I've come to think of it as ours. My father's first two cars were Padminis and I will always be a loyal fan.

All cars are best in their own world.My 5's

1.Ambassador
2.Swift Dezire
3.Ford Fiesta
4.Scorpio
5.Logan

My 5 best cars in India
1) Maruti Swift
2) Mahindra Scorpio
3) Toyota Innova
4) Honda Civic
5) BMW M3

The ones that top my list

1) Tata Safari Dicor 4x4
2) MM 550
3) Contessa
4) Ambassador
5) The good old Fiat

OK.I'll list out 5 cars that truly were/are legends in their own right.Here goes.

Skoda Octavia vRS:The show-stopper.The hooligan.The Bad Boy's pick of the lot.Read elsewhere on the Forum "The RS isn't the car that gets you chicks' numbers..There are other cars like the Civic,Accord,etc. for that..Its the car that lands you directly into the chicks' bedrooms...".Need I say more?

OHC VTEC:The Jap missile.How about shifts at 7500 RPM??

Palio GTX:The first GTi on Indain shores.

Fiesta 1.6S:The S is one letter that differentiates this from all the other cars.Best performance+handling package this side of 10 lakhs.

Suzuki Baleno:Undoubtedly the most underrated all-rounder sold in India.Drive one and you'll agree.

I would love to just say same as Octane1002's list but cant miss lancer and swift though.

1. Lancer
2. Skoda Octavia vRS
3. Maruti Swift
4. OHC vtec
5. Baleno

My Top 5:

1. Ford Fiesta 1.6S- Own one, love one. No better VFM rocket like this one. Perfect combo of an eager revvy engine, sharp steering and brilliant handling.
2. Octy vRS- "the bedroom" remark. Nuff said...!!
3. Suzuki Baleno- Without doubt the most underrated car of its time. Brilliant engine and awesome mile munching abilities in a way that puts a smile on the drives face.
4. Mistu Lancer- A legend, with an almost infinite array of modding options.
5. Suzuki Swift 1.3 (P)- Another hoot of a car to drive. Taut handling, buzzy engine n a great short throw shifter. Perfect if you wanna play boy racer, but dont have the big moolah.

premjit, if you search else-where Suzuki Baleno is rated as the most over-rated sedan

My Top 5 Indian Cars with in my reach only,
1.Ritz VDI
2.Swift Dzire
3.VW Polo TDCI
4.Hyandai i2o
5.SX 4

OHC Vtec
Opel Vectra
Amby Mark3
Fiat 1100D
Chevy Cruze

1. Jaguar XJ
2. Land Rover Freelander II
3. Mitsubishi Pajero SFX 4x4
4. Honda Civic
5. Fiat Punto/Linea

My choices!
1. Premier 118 NE
2. Palio S10
3. Ford Fiesta
4. Fiat Punto/Linea
5. Premier Padmini

I'd like to think that one's supposed to make choice cars that are made by Indian companies and not the once available in showrooms across India. Meaning Merc, BMW, Audi, JLR, Chevy, Ford, Toyota, Honda, et all. are out of contention.

Hence, my pick would be...

1. Scorpio
2. Swift
3. Gypsy
4. Manza
5. (Old) Zen