Maruti Suzuki is feeling the heat with new challenges being thrown in by its international rivals every day. The biggest threat, however, is posed by the Tata Nano, the poor man’s car, which holds the potential to strip Maruti Suzuki of its no.1 title in India in due course.
As a result, Maruti Suzuki is looking at ways to offer an alternative to the prospective buyers of the Nano. The company believes that if a buyer is ready to buy the Nano on a bank loan, he won’t probably mind paying a little extra and buying a Maruti Suzuki, which definitely holds better brand value than a Tata.
To accomplish the feat of making a car that’s 20-25% cheaper than the Alto, and isn’t too far away from the price of the Nano, MSIL is planning to plonk in a two-cylinder engine in the Alto. MSIL will further strip the Alto down and add the new two cylinder engine to bridge the gap between the world’s cheapest car Nano and the current Alto. The new car, however, would still cost around 50,000 more than the Nano.
If some reports are to be believed, Maruti has already started sourcing the components for this engine, which is codenamed YP3. One of the vendors, who reportedly knows about this project has told Yahoo Business that the car will be substantially cheaper than the current Alto, and will be launched by the second half of 2011. According to a top component manufacturer for Maruti, “Maruti’s strategy is to explore every price category in the small car segment. The Nano launch forced it to sit up and explore this segment once again.”
There is a crying need for such a product as the 800, which was the cheapest product in the MSIL lineup has been withdrawn from as many as 13 cities owing to Bharat IV emission norms non-compliance. Looking at the current scenario, Tata has managed to create a huge gap between its Nano and Maruti’s Alto, with the price difference being as much as Rs 1.3 lakh between the base variants of the two models.
Source: Yahoo Business