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Maruti 800 sales halve in 3 months

Partha Ghosh in New Delhi

Sales of the country's most popular car, Maruti 800, fell drastically, almost halved, during April, May and June this year to match volumes of B segment car models such as the Santro and Indica - a reason which prompted Maruti Udyog to drop prices of the model in July by Rs 15,000-18,000.

Since April 2001, monthly sales of the entry-level car has dropped below 10,000 only once, in October 2001 when sales touched 6,875 units. Otherwise, the monthly sales average has remained between 11,000 and 12,000 units. But it touched highs of 13,427 in January 2002, 14,047 in February 2002 and 14,340 units in March 2002. Thereafter, sales have taken a dive.

Sales in April '02 stood at 7,180 units, in May it stood at 9,370 units and in June it was 8,432 units. Compare this with Hyundai Santro's 5,642 in April, 5,965 in May and 6,869 in June. Tata's Indica sold less during April (1,832) and May (3,018) due to a plant shutdown as the company got ready to roll out the Indica sedan. But sales normalised in June with 7,056 units.

The company is hoping the reduction in prices will widen the gap between A and B segments, resulting in larger sales, which will also help it derive economies of scale at the purchase level. Company estimates show the sales volumes will return to normal levels as a result of the new price positioning.

A Maruti spokesperson while admitting sales of the M800 have dropped, said: "With large discounts and promotions in the car industry, the gap between the price of Maruti 800 and of B segment cars had narrowed. But that has now been corrected with the price drop."

He said that following the price revision in July, there has been an increase in enquiries across the country. Sales of the car are expected to increase in the next few months.

He also said the fact that improved productivity and cost rationalisation that assisted the turnaround (in terms of profitability last financial year) has enabled the company to price the Maruti 800 aggressively.

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