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Maruti mulls price cut on Zen-D to boost sales

The country's largest car maker Maruti Udyog Limited is contemplating on trimming the price tag of Zen-D, the company's sole offering with a diesel heart, in a desperate bid to boost sales.

Though the quantum of the price cut is yet to be finalised, company officials in New Delhi said that the drop is likely to be in the region of Rs 15,000.

Sales of the Zen-D have been on the low side since its launch two years back. This comes close on the heels of the recent price cuts announced on Maruti-800, Omni and Wagon-R, the officials said.

"We are looking at all options (for boosting sales of Zen-D) including a price cut. We are now weighing as to what impact would the price cut have on the sales graph of the vehicle and if it will be feasible to affect a price cut," the officials added.

Zen-D was introduced in August 1998 marking the company's foray into the diesel driven vehicle market. The car, despite being powered by a 1500cc TUD5 Peugeot engine, failed to click in the market due to the high price tag of around Rs 450,000 (all prices ex-Delhi) that the vehicle sported. The price tag was later reduced to around Rs 363,000. The vehicle is currently priced at Rs 387,000.

Maruti had last month announced a 4-10 per cent cut in the price tag of its Maruti-800, Omni and Wagon-R. Faced with massive erosion in demand, price tag of Maruti 800 standard (Euro-I model) has been dropped by Rs 22,901 at Rs 198,979, while the price of standard version with multi-point fuel injection (MPI) has been dropped by Rs 20,000 at Rs 212,446.

The M-800 EX MPI model has now been priced at Rs 241,796, down Rs 10,000 from Rs 251,796 earlier. The price tag of M-800 DX MPI has been trimmed by Rs 15,000 at Rs 259,569.

The price tags of all the Omni models (5-seater and 8-seater MPI, 5-seater and 8-seater Omni XL MPI) have been trimmed by Rs 12,000 each. The Omni 5-seater MPI has now been priced at Rs 225,416, while its 8-seater counterpart is priced at Rs 218,454. The 5-seater

XL MPI version is priced at Rs 233,498 while the XL 8-seater version

now sports a price tag of Rs 226,075.

The Wagon-R LX model has been priced at Rs 343,763, a reduction of Rs 25,000 from Rs 368,763.

Maruti's net profits had taken a dive for the second year in running, recording a 36.7 per cent drop in 1999-2000 at Rs 3.30 billion as against Rs 5.22 billion a year ago. The company's net profit in 1998-99 was 20 per cent lower than the previous fiscal's Rs 6.52 billion.

The company attributed the drop in net profit to the cost burden from price cuts, appreciation in the value of the Japanese yen, increased investments and huge depreciation. It also announced a lower dividend of 25 per cent for 1999-2000 as against 30 per cent a year ago.

However, the turnover, riding on increased sales of its passenger car models, touched an all-time high of Rs 96.73 billion, up 18.2 per cent from Rs 81.81 billion a year ago.

UNI

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