The Telegraph
Since 1st March, 1999
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Maruti sacrifices Deluxe 800 to sell Alto

New Delhi, May 17: Maruti Udyog, a unit of Japan’s Suzuki Motor Corp, has stopped manufacturing the deluxe version of its basic 800 model, which analysts say is an effort to push up lower sales of the 800-cc Alto model.

Alto LX and LXi, the two variants of the 800-cc Alto, although powered by the same engine of the earlier “800 deluxe” model, was priced Rs 20,000 more at Rs 2.87 lakh. “This was eating into Alto’s sales as buyers opted for the deluxe model,” said auto analysts.

Consequently, the automaker decided to stop production of the 45-bhp, 12-valve, multi-point fuel injection (MPFI) engine, five-speed deluxe model.

Alternatively, it introduced the air-conditioned version of the 800 model that sports 37-bhp, 6-valve, MPFI, and four-speed gear box. The company also replaced the superior coil spring suspension with the regular leaf spring suspension in the new air-conditioned version.

Analysts said by increasing the price difference between the new air-conditioned version and the Alto, the firm ensured the new AC model does not eat into Alto’s market share.

“A strategic move which would drive up sales of the new air-conditioned version as well as that of Alto,” said a senior auto analyst.

The automaker, which sells 11 models in India including cars, multi-purpose and utility vehicles, garnered a 50.8 per cent slice of the domestic car market in 2002/03 (April-March) due to its dominance of the small car segment.

While for the financial year ended March 2003, it has reported flat sales at 2,75,031 units against 2,73,884 units last year, sales leapt 45.8 per cent in April year-on year.

The automaker, country's biggest in terms of sales, is poised for an initial public offer (IPO) by the government later this year which owns a 45.4 per cent equity stake. Of the 45 per cent share, the government plans to divest 25 per cent or 3.6 million shares, at Rs 115 a share, through the IPO.

Of the 3.6 million shares — 60 per cent would be offered to mutual funds, financial institutions, venture capitalists, 15 per cent to companies and large investors and the rest 25 per cent would be offered to retail investors.

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