Maruti hints at price hike, unveils Alto

Neena Haridas in New Delhi

Planning to buy a Maruti 800 or a Zen? Well, get cracking and book your car now. For, MUL managing director Jagdish Khattar has hinted that a price hike is in the offing.

Khattar said, "Our prices will not change till September 30. We still have 48 hours in our hands, but after that we might have a few things to say."

Meanwhile MUL finance director Rohtash Mal suggested that in the next three months, the market can expect some changes in the Maruti 800 and Omni models. He said, "Wait and see what we plan to do with Maruti 800 and Omni."

Sources have revealed that the price hike could be in the range of Rs 15,000 to Rs 20,000. However, Khattar refused to confirm this.

Meanwhile, Maruti launched its latest small car, Alto, on Thursday. The auto giant launched two version of Alto - the Alto LX -- a 796cc, 45-bhp, 12-valve MPFI engine version -- priced at Rs 299,000 (ex-showroom Delhi) and Alto VX 1.1 -- powered by a 1061cc, 62-bhp, 16 valve MPFI engine version -- priced at Rs 365,000 (ex-showroom Delhi).

Khattar made a grand entry onto the ramp -- breaking through a shield of glass driving his hot property. He said, "Alto LX is being positioned in the top end of the A-segment category (which means between Maruti 800 and Zen) and Alto VX will play at the entry level of B-segment (between Wagon R and Esteem). Today, the first car is not necessarily the cheapest car. Hence, our effort is to give the consumer as much choice as he wants."

In other words, Khattar believes that Alto is MUL's answer to Daewoo Matiz and Hyundai Santro which are 800cc and 1,000 cc cars, respectively.

Now, Alto VX will give Matiz competition because it offers an 800cc MPFI engine with features such as air-conditioning, collapsible steering, etc at a much lower price.

Similarly, Alto VX places Maruti at an advantage over Hyundai Santro, in terms of pricing and features.

Asked if Alto is expected to pep up Maruti's sagging bottomline, Khattar said, "Maruti is too big an organisation for any one model to change its fortunes drastically. However, this is the new model from us. We believe it is a state-of-the-art offering at economical price. Thus, I think there will be lot of interest in this model."

Does that mean cannibalisation? "As long as cannibalisation means more sales for Maruti, we are okay with the idea. It may so happen that a Zen buyer might think of Alto now. But I really don't think a Maruti 800 buyer will actually think of an Alto because he will not be able to afford it. Really, the Alto is meant to consolidate our portfolio."

Alto boasts of 70 per cent localisation.

Asked if MUL plans to discontinue the production of Maruti 800 and Zen, Khattar said, "No, not at all. First, both these models, despite competition, are leaders in their segments. So why would we want to spoil that? Second, we have a capacity to produce about half a million vehicles. We can also afford to make more models and more vehicles. So where is the question of discontinuation?"

Khattar was extremely optimistic about his company's market share and said, "At the beginning of the fiscal our market share had fallen to 52-54 per cent. This month, we have improved our position to 58-59 per cent. However, this fall is not just because there are more players in the market, but since the market itself has been dull. Last year, the market grew at 60 per cent. This year, till August, the growth has been 9 per cent. Now don't you think that will affect a manufacturer?"

"There are 12 manufacturers in the market now, with a capacity of 1.3 million units. Of that, MUL alone manufactures over 400,000 units -- more than 33 per cent. I think someone should ask the other manufacturers what they are doing will all their excess capacity."

Regarding the apprehensions about MUL slipping into the red this fiscal, Khattar said, "It is too early to project things like that. There are six more months to go in this fiscal. So, let us wait and see."

While Khattar was very articulate about his new car and the company in general, a question on the on-going Maruti Employees Union strike puts him off.

Khattar said, "Talks have not really broken down. We are in the process of settling the issue."

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