The country’s largest car maker Maruti Suzuki (MSIL) today triggered off a price war in the entry-level small car segment with the launch of the new Alto 800 which is priced lower than the base variant of the outgoing model.
The new car – tagged upwards of Rs 2.44 lakh (ex-showroom, Delhi) - is cheaper by Rs 5000 when compared with the existing Alto 800 cc variant which was priced upwards of Rs 2.49 lakh. Following suit Hyundai and Tata Motors have announced deep price cuts on the Eon and launch of new special edition variants of the Nano respectively to beat the market leader.
Hyundai, the country's second largest car maker is offering the Eon at par with the Alto 800 priced at Rs 2.44 lakh, inclusive of discounts and bonuses. Nearly 12% (around Rs 30,000) of the value of the Eon is offered at a discount by Hyundai presently. Tata Motors too has launched a 'special edition' Nano which features alloy wheels, body graphics, music system and glove box. These features are not seen on the regular Nano. "Drive home your special edition Nano today and save up to Rs 40,000", states an advertisement.
Maruti Suzuki has recorded over 10,000 pre-launch bookings for the car.“We are introducing the new Alto 800 at a time when petrol car sales are on a decline. It will help us in reviving the market”, said Mayank Pareek, chief operating officer, MSIL. The company has invested Rs 470 crore along with its vendors to bring on roads the refurbished model.
For the more cost conscious who has been deferring purchase due to high fuel costs, Maruti Suzuki is offering the new Alto 800 with a CNG option. Priced between Rs 3.19 lakh and Rs 3.56 lakh, the CNG variant of the Alto delivers fuel efficiency of 30.46 km/kg. Work on a small diesel engine is going on and could be seen in the future on the Alto 800. While Hyundai had launched the LPG version of the Eon earlier this year, Tata Motors is yet to launch the CNG-powered Nano, which was show-cased at the Auto Expo in January.
Though the Alto 800 and the Eon come strapped with an almost equal sized engine (800cc), the Nano is powered by a smaller 624cc engine, with comparatively less power than both the other hatchbacks. With an ARAI figure of 22.74kpl for the petrol version, Maruti claims the new Alto 800 will be 15 percent more fuel-efficient than the outgoing model.
Alto, which has been the best-selling car on Indian roads for eight straight years now, has seen sales slowing in recent times due to waning demand for petrol cars. Average monthly sales of the car have declined to around 18,000 units between April and September this financial year from over 25,600 units sold every month in 2011-12.
Sales of petrol cars in the domestic industry have dropped by a fifth this fiscal as against a 54% increase in demand for diesel models.
According to data available with industry body Society of Indian Automobile Manufacturers (SIAM), while sales of cars in the mini segment (with length less than 3600 mm and engine displacement up to one litre) have declined by 16% to 249,344 units in the first six months of the fiscal, Maruti Suzuki’s volumes in the category have fallen by 21%.
The company’s market share in the segment has dropped by five percentage points to 74% in the period. Rival Hyundai Motor has been the gainer in the period who with the Eon has increased its share to 24% till September this fiscal as compared to 16% recorded in the corresponding period last year.