New emission norms prompt India's largest car maker to phase out 25-year-old models.
Over 25 years after the Maruti 800 and the Omni revolutionised the country’s passenger car market, Maruti Suzuki has decided to stop selling the models in eleven key cities from next year.
The cities are Mumbai, Delhi, Kolkata, Bangalore, Chennai, Surat, Kanpur, Hyderabad, Pune, Agra and Ahmedabad.
The reason: under the new emissions rules, only Euro IV-compliant models can be sold in these cities and the cost of upgrading the Maruti 800 or the Omni to the new emission standards would be prohibitive.
Explaining the decision, Maruti Suzuki Chairman R C Bhargava said: “Most of these are major cities and they constitute not more than 5 to 10 per cent of the total sales of these models. So, withdrawing them will have a negligible impact on the company.”
Most Maruti 800s sell in rural India and that is the big market in which it will continue to sell, he added.
Bhargava, however, clarified that the entire country will come under Euro IV emission norms by 2016, when the production of the iconic models will have to stop altogether.
Despite speculation for many years, the Japanese car maker has maintained that it will continue to sell the Maruti 800 and the Omni as long as there is a demand for them.
Sales volumes of the two models have, however, been falling. The company sold 46,953 Maruti 800s between April 2008 and February 2009, a 34 per cent drop from 63,200 cars sold in the same period in 2007-08.
Many experts have contended that the Maruti 800 would be hit by the launch of the Tata Motors’ Nano at Rs 1 lakh. But, Bhargava said the impact would be marginal since the Nano will create a new market.
He also ruled out speculation that the company was planning to reduce the Maruti 800 price to compete with the Nano. “We do not have that kind of margins to cut the price of the Maruti 800 at all,” Bhargava said, adding: “Unlike the Nano, which has received many concessions from Gujarat we have not receive anything that will help us reduce our price.”
