Date:29/03/2008 URL: http://www.thehindubusinessline.com/2008/03/29/stories/2008032951740300.htm

Maruti to review 800 model after Nano launch

At Rs 1.92 lakh, Maruti is the cheapest small car now

Nano, the Rs 1 lakh car, could expect some competition from Maruti’s user car business, True Value.

K. Giriprakash

Bangalore, March 28

As the market launch of Tata Motors’ Rs 1-lakh car, Nano draws nearer, Maruti Suzuki’s top bosses have already started discussing the fate of their Maruti 800 model.

One of the top officials of Maruti Suzuki, who did not want to be identified, told Business Line that the country’s leading car maker will take a decision on the future of Maruti 800, which has sold over 2.5 million cars so far, based on the performance of Nano and the market situation prevailing then.

Another official with Maruti Suzuki said, while there are no plans to bring down the price of Maruti 800 to match that of Nano, the Rs 1 lakh car could expect some competition from Maruti’s user car business, True Value. Maruti 800 is the lowest priced small car in the domestic market now and sells at Rs 1.92 lakh (ex-showroom).

Maruti Suzuki officials believe that it might be difficult to stop the slide of Maruti 800 sales if Nano starts performing well in the market. In case, Nano fails in the market, Maruti 800 could in fact see some revival and Maruti Suzuki might end up keeping the model alive for some more time.

But clearly with more launches in the mid-size segment lined up, Maruti Suzuki seems to be keen on focusing on this segment in the near future. The official also pointed out that whenever the company believed that any of its models had reached the end of the road, it did not hesitate to phase it out.

‘No more changes’

Maruti 800 has seen its market share as well as its sales slide over the last few years while its nearest competitor from the same stable, Alto has been witnessing a steady rise. Between April 2007 and February 2008, Maruti 800 sold 63,200 units, over 15.5 per cent lesser than the same time in the previous year. Alto, which has the same capacity engine but comes equipped with power steering is today the largest selling car in India and its sales are over 2 lakh units per year. Between April 2007 and February 2008, its sales have grown to 2,07,691 units compared with 2,02,710 units during the same period last year.

Maruti Suzuki officials believe that it may not be able to carry out more changes in the Maruti 800 model, which has seen quite a few makeovers since its launch in 1983. An official with the company said Alto as well as Maruti 800 have their own customer base and hence do not want to carry out more changes in Maruti 800.