MUL launches Grand Vitara

Maruti SUV is back with a bang. After an 18-month hiatus, Maruti Udyog on Thursday declared its comeback to the SUV passenger car segment by launching the new Grand Vitara.

Priced modestly at Rs 13.8 lakh (ex-showroom, Delhi) for the manual transmission model and Rs 14.8 lakh for the automatic transmission model, this car replaces the earlier Vitara which had a price tag of Rs 18.28 lakh (manual transmission).

The erstwhile Vitara was, however, more powerful with an engine capacity of 2600 cc whereas the rechristened SUV has an engine capacity of 1995 cc.

This low pricing pitches Grand Vitara against Ford Endeavour (14.72 lakh for base model) and Honda CR-V (17.8 lakh for base model).

"Grand Vitara happens to be our fifth model in less than 12 months," said Jagdish Khattar, MD & CEO, Maruti Udyog, explaining the diversity in the recent launches. The company launched Wagon R Duo, Zen Estilo, Swift Diesel and the sedan SX4 in the last one year.

About the number of Vitara units the company plans to sell, Khattar said there were no targets and imports would depend on the response. The earlier Vitara used to sell around 40-50 units per month.

According to the company, the car will be imported from Japan as a completely built unit (CBU).

About the rising interest rates, Khattar said, "They are still impacting sales of the company. Good results of one month (June) are not sufficient to say that the impact is not there."

Passenger car sales grew 18.48 per cent in June over the same month last year despite 5 to 6 per cent rise in interest rates in the same period. Car loans account for 85 per cent of the sales in the country. Khattar also said growth had mainly come from new models which did not have a base last year.

Maruti admitted that the discounts that the company was offering to offset the impact of higher interest rates was eating into the margins. "Discounts are affecting margins. We are trying to mitigate it through internal efforts," said Khattar.

When asked about the impact of small cars such as the Tatas' Rs 1 lakh car or the Renault's $3,000 car on Maruti, Khattar said it won't affect MUL as target customers were different.