Makeover magic

New Delhi, Nov. 20: Maruti Udyog, India’s largest car maker, plans to surprise the market by launching a brand new Zen, the first car to be designed by its recently established design house at Gurgaon.

“It will be the first car designed in India, even Tata’s Indica was designed by an Italian design house. It will be no variant — it’s really a new car. It looks totally new, like a smart European city car, more leg and head space with lots of added features,” said a top Maruti designer.

Maruti revamped its research and design centre after Suzuki took over reins of the company some time back as part of an attempt to allay Indian fears that it would be turned into another assembly plant, which would not encourage Indian creativity.

“The new Zen is likely to be launched next month itself. We worked hard on the design ... and from the look of it Maruti will retail it at a 7 to 10 per cent premium over current Zen prices because of the features we are packing it with,” the Maruti official said, who, however, remained tight-lipped about the added features. All versions will probably have power steering, which is currently provided in top-end model. Zen retails within a range of Rs 3.3 lakh to 3.9 lakh, depending on the variant.

The new Zen will compete against Indica car’s Rover version which till recently was retailing only in the European market. Now it will also be available in India.

Maruti already faces stiff competition in the premium compact car segment. Zen, which sells about 5,000 units a month, continues to be Maruti’s largest selling brand in this segment. However, its sales too have remained flat. Maruti had earlier introduced a new engine in the Zen and made cosmetic changes to its design but this, say designers, didn’t really help.

“We were told we have to create something far more contemporary than the 10-year old design, something which will spurt sales and endure through till 2010 at least,” officials said.

Stiff competition from new entrants such as Hyundai Motor Co, Fiat SpA, Ford Motor Co and Tata Motors (formerly Telco) has been eating into Maruti’s market share, which has shrunk to about 50 per cent, from more than 80 per cent five years ago.

The company makes 10 models in India, including Zen and Wagon R compact cars and its top selling entry level Maruti 800, which is still the cheapest car on Indian roads.

However, brand fatigue is catching up despite the fact that Maruti retailed more than half of the 5.42 lakh new cars sold in the past year to March 2003. Its own sales inched up only marginally 2.8 per cent to 3,62,426 units during the year and its revenues remained flat at Rs 9,426 crore against Rs 9,398.9 crore clocked in 2001-02 financial.

“It (Maruti) needs a new pep pill to get back into the growth mode and that’s what it is trying to do by overhauling the design of one of its old legends,” said S. K. Sen, auto market analyst for a leading fund.