Maruti Udyog Ltd on Friday said the repositioning of compact car Alto would give the customer yet another option at the entry-level while asserting that its bread and butter model Maruti 800 would not be phased out.
"Now, we have two cars at the entry-level," Maruti managing director Jagdish Khattar told PTI while asserting, "Maruti 800 is still a dream of Indians, how can I replace it?"
Dismissing queries if the repositioning of stripped down version of Alto at a marginally higher price could lead to the winding up of Maruti 800, its first model in India, 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 the entry-level in terms of price range as Maruti was now offering four different products in the price range of Rs 200,000 to Rs 325,000 against the starting point of Rs 325,000 for Santro and Indica, he said.
With the repositioning of Alto, the average monthly sales of the compact 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 competitors were likely to lose, he said.
MUL launched the non-AC Alto model this month, reducing the price gap between Maruti 800 and Alto by just Rs 23,000.
"When people ask about the 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 its 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 300,000.
"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 the 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.
At the time of slashing prices of Alto this month, Maruti said it had "long term" plans for India's cheapest car.
Maruti launched the non-AC version of Alto at Rs 230,000 (ex-showroom, Delhi), while Maruti 800 costs Rs 207,000.
The new non-AC variant of Alto has a provision for retro-fitment of air conditioner.
At present, Alto is available in three versions Alto Lx (Rs 265,000), Alto LXi (Rs 285,000) and Alto VXi (366,000).
The positioning of Alto coupled with the Rs 2,599 EMI scheme for Maruti 800 would help a number of two-wheeler owners to upgrade to a four-wheeler, especially in rural areas, Khattar said.
Asked about the 25 per cent dip in Maruti 800 sales at 15,540 units last month when compared to March 2003 sales, he said car sales in March last year were unusually high as customers postponed their plans of purchase in February in anticipation of an excise duty cut in the Budget. People bought cars immediately after the Budget, pushing up the sales in March 2003.