Maruti Udyog focuses on Alto and WagonR to drive sales

Mumbai: From the recent promotional and pricing support being extended to the Alto and the WagonR, it's clear that Maruti Udyog ltd (MUL) is banking on these two cars to fight its way to the top again.

Last month MUL in association with other companies, notably JK Tyre and auto magazine Overdrive, conducted a highly-publicised performance-stress test on the Alto Lx, subjecting the car to a 24-hour full-throttle on a test track.

Subsequently, early this month, in a move aimed at targeting entry level buyers, MUL slashed prices of the Alto LX and the Alto LXi, both 800cc cars, by Rs 23,167, in effect creating another category between the A1 segment M800 and the A2 segment Alto Vx. After the cut, the ex-showroon Delhi price of the Alto LX and the LXi stands at Rs 265,013 and Rs 284,756, respectively.

Says a company spokesperson: "Our strategy is that the new prices, together with cheap and convenient car finance, will make the Alto a very attractive option for the large number of first-time car buyers as well as customers who wish to upgrade from a Maruti 800."

The idea is to position the Alto Lx 800 as an entry-level car in metros and mini-metros, while the M800 is to be targeted at small towns and semi-urban areas. Alto's price cut is expected to generate the same kind of interest in the B segment that the July 2002 price reduction of the M800 brought in.

MUL's other object of focus is the WagonR. The car is being positioned in the B segment and MUL recently announced a ramped-up variant of the WagonR. The new variant will have clear lens headlights, a spruced-up interior and some styling changes at the rear. The variant will be launched before Diwali this year.

WagonR's and Alto's sales have been on the upward path since the past one year. In the first quarter of the year (April-June 2003) the sales of WagonR increased by 64 per cent to 10,512 units, while the Alto clocked a 46-per cent growth at 8,143 units.

Taken together the two notched up a sales figure of 18, 655 units. Adding the sales of the Zen, MUL's third compact car, the numbers come out even better. As a consequence, MUL's domestic sales in the first quarter of this year touched 90,698 units, 37 per cent higher than sales in the last year's corresponding period.

In the first quarter of the present fiscal, MUL's compact cars taken together were able to average sales of about 6,000 units per month. On the other hand the Hyundai Santro, the leader in the B segment, on an average sells 7,000-7,500 units per month while the Tata Indica clocks a little less in the domestic market.

MUL's focus on the B segment stems from the fact that growth in this segment has been uncertain this year, registering a flat 0.8 per cent in March to 17.26 per cent in April to 25.19 per cent in May, 6 per cent in June and 25.7 per cent in July.

Cumulative April-July figures indicate that at 94,787 units, growth is up just 4.5 per cent over last year's 90,674 units. Moreover, month-on-month sales have remained flat, from 22,371 units in April to 27935 units in May, 27,901 units in June and 27,454 units in July. B-segment players are thus looking at ways of reviving interest in the segment.

Hyundai has done this by introducing the new upgraded Santro Zing, while there has been fresh action in the premium B segment with the launch of the Corsa Sail and the upgraded Palio NV.

Earlier this year, MUL launched a special limited edition of its Alto LX in two variants priced at Rs 3.02 lakh (ex-showroom Delhi) and Rs 3.22 lakh with electronic power steering. This was about Rs 15,000 more than the Alto LX and the LXi (with electronic power steering) cars priced at Rs 2.87 lakh and Rs 3.07 lakh, respectively.