LPG Wagon R sales take Maruti by surprise

Maruti Udyog Limited seems to have underestimated the demand for the Wagon R Duo. Today, there is a waiting list of a month or more for this tall-boy hatchback from the nation's largest carmaker.

The Duo, which comes with a factory-fitted LPG kit, runs on both petrol and LPG. Launched in July this year, along with a comprehensive facelift of the Wagon R, the Duo has met with encouraging response from the 42 cities it is sold in across the country. In the period July-August 2006, Maruti has sold 16,437 units of the Wagon R compared with 12,526 in the same period last year.

While the new look has substantially contributed to the increase in sales, the Duo has turned out to be a key sales success for the Wagon R, contributing to around 20 per cent of Wagon R sales in this short period.

Sources inside the company say that sales potential of the Duo was much higher than this 20 per cent, and they are only handicapped by production constraints.

"This is also the reason why we are not promoting the Duo aggressively. Once we are confident of ramping up production of the Duo, we will break out the campaign and highlight the fact that the LPG kit is factory fitted," said the source. The LPG kit for the Wagon R is being supplied by Minda-Impco. MUL is confident of clearing the waiting list by October.

However, to clinch the deal with customers who are not willing to wait long for the Duo, some dealers in Mumbai are offering to convert the regular Wagon Rs to LPG at their end. They are also claiming that conversions to LPG through them is cheaper too, a saving of as much as Rs 11,000 over the Duo.

The Wagon R Duo costs about Rs 22,000 to 25,000 over the petrol version in Mumbai, and it returns about 17 to 18 kilometres to the litre - about as much as a diesel car in its category can offer, or about 33 per cent less consumption than the petrol version, according to Maruti. The rising cost of petrol has prompted people to look at cheaper alternatives like LPG and CNG as fuel.

By offering a factory-fitted kit in passenger cars, instances of illegal use of domestic LPG and improper, unauthorised fitment of LPG kits can be reduced. And looking at the Maruti example, it makes business sense too, by offering an additional variant of their regular cars to customers.

MUL's key competitors such as Tata Motors and Hyundai Motor India are also looking at introducing LPG variants of their own passenger cars. Tata Motors offers authorised CNG kit fitment at their dealerships for the Indica and Indigo Marina - however at this moment, they are undecided whether to offer their LPG kits through their dealers or offer factory-fitted LPG versions of their models. Hyundai Motor, on the other hand, said that it is conducting feasibility studies on LPG versions of their various models.