Mul Offers Cash Sops To Prop Sales

Maruti Udyog Ltd (MUL) is offering a special incentive scheme to its dealers for various models, including the standard Maruti 800, for the first time as part of its strategy to take on the Korean chaebols.

MUL is offering the dealers Rs 2500 for Maruti 800, Rs 3000 for Maruti 800's air conditioned model and Rs 3500 for the Zen VX. The scheme, which is effective till the end of the month, is being offered to all the dealers across the country who have achieved previous sales targets.

The dealers have the option to pass on this amount as discounts to the customers as part of their promotional exercise. MUL is offering this scheme to the dealers against their commitment to push up sales through promotional and other incentive schemes.

The Maruti move is seen by industry analysts as an indirect way by which the company is playing a pricing strategy by passing on financial incentives to the customers.

Apart from the dealer scheme, MUL has recently launched a customer incentive scheme for the Zen VX. Under this scheme, the company pays 20 per cent interest per annum on the booking amount (which is 80 per cent of the price of the car, and comes to about Rs 3.15 lakh) to the customer. This scheme would also be effective till the end of the month.

The scheme works out to a benefit of Rs 3000 to the customers as they have to wait for a period of four to six weeks for delivery.

Besides, MUL has changed its warranty scheme to the one being offered by Hyundai for Santro. It has now started offering warranty for one year and an unlimited amount instead of the earlier limit of Rs 20,000 for one year. The schemes from MUL has been initiated at a time when two Korean companies, Hyundai and Daewoo, have announced their booking periods. According to initial reports, Hyundai, whose booking for Santro was completed yesterday, received a lukewarm response. Bookings for Daewoo's Matiz will commence from October 17.

MUL's move is expected to spark off a fierce marketing war in the small car segment, and both the Korean companies are expected to come up with an aggressive response.