Maruti cuts 800 prices by Rs 16000

Potential car buyers need not sweat over the delayed monsoon. It's raining goodies for them.

Close on the wheels Hyundai Motor India lowering the price slabs of the Santro, market leader Maruti Udyog has reduced prices of the ubiquitous 800, the best selling car in Indian automobile history.

The non-AC 800's price, Rs 2.15 lakh so far, has been reduced by about Rs 16,000 to bring it just below the psychologically important mark of Rs 2 lakh. The price of the AC 800 too has been reduced by the same amount to Rs 2.22 lakh.

The move may boost the sales of the 800, which have been stagnating of late. It will also create more differentiation between the 800 and the Alto, which has of late emerged as Maruti's largest selling model.

"This move by Maruti will help the 800 rebound to the 10,000 per month volume, against the current level of 6,000-7,000 a month. The additional revenue from the incremental sales will compensate for the revenue/profit loss caused by the price cut. Apart from this, the gap between the Alto and 800, which was only around Rs 25,000, has now been widened to Rs 40,000, killing the cannibalisation within the Maruti family," said Ramnath Subramaniam, vice president (research) of Mumbai-based stock broking firm, SSKI.

Besides, the new price of the 800 will catalyse the migration of two-wheeler owners "" who now generally buy a used car while upgrading to four wheels "" directly to a new car.

A release from MUL said the price cut has been effected to improve the penetration level in India, which stands at about 6-7 cars per 1,000 people. The company's schemes like '2 ka 4' facilitated entry of two wheeler owners into 4-wheel segment.

'The company has now announced an even more attractive price for Maruti 800 to cater to entry-level customers and to expand the market," said the release from MUL.