Maruti 800 to stay; Alto second entry-level car

In a bid to continue with its dominant position in the domestic car market, Maruti Udyog Ltd (MUL) said the repositioning of compact car Alto will give the customer yet another option at the entry-level while asserting that its bread and butter model Maruti 800 will not be phased out.

"Now, we have two cars in entry-level," managing director Jagdish Khattar said, while asserting M-800 is still a dream of Indians, how can I replace it?"

Dismissing queries if repositioning of stripped down version of Alto at a marginally higher price could lead to winding up of Maruti 800, its first model launched 20 years ago, he said it was a realisable dream for millions of two-wheeler owners who would want to have a four-wheeler.

As a result, its nearest competitor, be it Hyundai or Tata Motors, was placed at least five steps above Maruti at entry-level in terms of price range as it was now offering four different products in the price range of Rs 2 lakh to Rs 3.25 lakh against the starting point of Rs 3.25 lakh for Santro and Indica, he said.

With the repositioning of Alto, average monthly sales of the comopact car have gone up by 9,000 units a month from an average 2,000, while Maruti 800 continued to sell around 13,000 units a month, he said.

There will be some cannibalisation with the repositioning of Alto but with two more variants of the compact car LXI and VXI along with Zen and WagonR, Maruti's competitiors were likely to lose, he said. MUL launched non-ac Alto model this month, reducing the price gap between Maruti 800 and Alto by just Rs 23,000.

"When people ask about phasing out of Maruti 800, I have no other answer but to say they do not know India. Maruti 800 has motorised the country. We will continue to fulfill common Indians' dream of owning a car at an affordable price."

MUL, which is 54.2 per cent owned by Suzuki Motor Corp of Japan, aims to increase market share in the entry-level category with Rs 2,599 EMI scheme for Maruti 800 and making available B segment car Alto almost at the price of an A category car.

The new positioning would help Maruti customers to upgrade from Maruti 800 to a vehicle which is within reach and those who want a compact car within a price band of Rs 3 lakh.

"We have positioned Alto in such a way that it will cater to the needs of all such customers," he said. Alto, which is a runaway success in European markets and the mainstay of Maruti's exports, has been 90 per cent indigenised and this has helped the company to bring down the prices of the car.

"We worked consistently to indigenise Alto. With 90 per cent local content, we passed on the price benefits to our existing and prospective customers," Khattar said.