Design can refer to almost everything in the car:
Aesthetics:
The pics don't look bad at all, even by today's standards
Engine:
- 20 year old? Yes. However, I don't believe the regular (pre-vista, non-fiat) Indicas are fitted with Diesel engines that are any better than 20 yr old mainstream diesel models in Europe. So let's say it has a 'regular' non-common-rail diesel. The TUD5 is NOT a bad engine if you see what's already out there on Indian roads.
Other points:
Discarded:
The rights are getting sold, because the rights are saleable, in demand, across regions. Zotye purchased the rights and, as you of course know, PAL is getting the whole car CKD from China, except the transmission.
Manufacturer reputation:
Cars rusted then, they made bad cars for what wasn't even a car market for anyone. The roots of this are in...economic decisions at national level in those days and the history of other thing.... 'licences' preceding it.
Do I like PAL? No. They never wanted to innovate. Are they innovating now? No. Does Rio look like a bad product on paper? No.
Bajaj Auto today is a very respected manufacturer. But we must not forget that if they had a choice, they would have continued to sell us the old scooter even till date.
It's a different game now. This is the first almost-fully made-in-china car on Indian roads. It's far from smashing but it's probably cost-effective. Let's see.
On a sad note, your question is valid: Are we in 2009 or is this 1979? And this needs to be answered also by Tata Motors and Mahindra who don't want to invest enough 'emotion' in R&D to come up with great Indian engines, transmissions, and cars that are rock-stable. It's not a question of capability. The sad fact is our manufacturers lack an intrinsic desire to innovate and to pursue perfection Lexus style. Great cars is a commodity product and making them is NOT rocket science. Tatas/Mahindra and India have enough brainpower to challenge Mercedes within 10 years from now. Do we want to? That's the question.
cheers