MARUTI Suzuki plans to introduce stripped-down versions of its best selling cars Alto, WagonR and Swift, as it gears up to defend market leadership against global biggies Toyota, Honda and Volkswagen that plan small car launches in India.
The latest move by Maruti, which makes every second car sold in India, is aimed at queering the pitch for new entrants taking aim at the world’s largest market for small cars. The Indian arm of Japanese carmaker Suzuki Motor, known world-wide for its small cars, is going against the industry practice of launching new variants at higher prices.
This is in line with company CEO S Nakanishi’s view that 2010 will be the toughest year for Maruti. “We have to gain volumes to protect our market share with global car makers entering the compact car segment,” Mr Nakanishi had said earlier. The new variant of Alto, slated for launch in the next three months, will be cheaper than the cheapest variant currently. The move has been widely anticipated as Maruti will need a product to take on Tata Motor’s Nano as its M-800, its cheapest car at present, will not be sold in the country’s 11 cities that will adopt Bharat IV emission norms. The new variant will boost the market leaders’ numbers in the sub-Rs 3 lakh segment. Maruti had taken a similar step with the redesigned Zen Estilo, which was at least Rs 50,000 cheaper than the outgoing model. Similarly, the new multi-purpose vehicle Eeco, priced at Rs 2.59 lakh (ex-showroom Delhi), is Rs 1 lakh cheaper than the Versa. Rejigged rollout expected next month
THE new Swift petrol, expected to hit the market in the first half of 2010, could be Rs 30,000-35,000 cheaper than the cheapest variant at present. The new variant likely to have a 1.2 litre KB series engine against the existing 1.3 litre engine. All cars in India with 1.2 litre petrol engine and under 4-metre of length attract 8% excise duty compared with 20% for larger vehicles. Maruti is expected to pass on the excise benefit to customers. Maruti is refurbishing its entire portfolio as per the international norm of revamping cars every three years. Most of its cars have attained that cycle of change. Moreover, these models have older engines that will be replaced to meet the new emission norms applicable from April.
“We would offer greater value for money with our new range of cars,” said Maruti Suzuki’s managing executive officer (engineering) IV Rao. He however refused to divulge further details. The latest moves form part of Maruti’s three-year-old cost-reduction programme where it set new price-targets for every model to face increasing competition. As per component suppliers working closely with Maruti’s R&D team to cut costs, the company has plans to refurbish the entire portfolio and the roll out is expected early next month. “Maruti has embarked on a massive cost-reduction programme along with its vendors for each model after the launch of Tata Motors’ Nano.
Though Nano is yet to gain the volumes expected of it, Maruti’s exercise is bearing fruits and soon it’s refurbished range would come with an highly aggressive price tag,” a person working close with Maruti said, requesting anonymity.