Maruti Suzuki working on a new entry-level car for launch in 2020: Report

The challenge for Maruti right now is to make sure that the car meets all the regulatory norms when it hits the market in 2020, and the cost

Maruti Suzuki is working on an entry-level car, which would reportedly be rolled out in 2020. Code-named Y1K, the made in India car would have a petrol engine of a capacity between 800cc – 1,000cc. It is currently being developed at the company’s newly built research and development facility at Rohtak, according to a news report in the LiveMint.

As the country’s safety and emission regulations are set to change to more stricter norms by 2020, most of the current models or those that are under development and scheduled for launch in later years need to be reworked on to bring them in-line with the requirements of the upcoming norms. Therefore, the challenge for Maruti right now is to make sure that the car meets all the regulatory norms when it hits the market in 2020, while maintaining the cost, according to the news report in the LiveMint.

The upcoming car is expected to be placed between Maruti’s entry-level Alto 800 and Wagon R hatchbacks. The information about the upcoming car surfaced after the company’s competitor Hyundai seen testing a new entry-level hatchback, which is reported to be the next-generation Santro model.

On June 18, Business Standard reported that both Maruti Suzuki and Hyundai are planning to introduce completely new entry-level models for buyers in India’s small car market, who have had little to choose from in the absence of new launches since five years.

In terms of market share, while the overall passenger cars share has increased, the market size of the small cars has shown declining trend. The drop has largely been led by muted sales of micro and mini models such as Alto, Wagon R, Tata Nano and Renault Kwid.

However, “the fundamental of the entry-level segment remains strong,” pointing out that first time buyers still account for 40 - 45 per cent of the car market, said Rakesh Batra, partner and national leader, automotive sector at E&Y to Business Standard.

The new generation models, therefore, would definitely help in reviving the segment. However, a flurry of new regulations on emission, safety and fuel efficiency expected over the next few years would push up the price points, he added.