Maruti unveils Alto 800, has over 10,000 pre-orders

NEW DELHI/MUMBAI Tue Oct 16, 2012 11:09pm IST

Officials stand next to the newly launched Maruti Suzuki Alto 800 car in Ahmedabad October 16, 2012. REUTERS/Amit Dave

Officials stand next to the newly launched Maruti Suzuki Alto 800 car in Ahmedabad October 16, 2012.

Credit: Reuters/Amit Dave

Stocks

   

NEW DELHI/MUMBAI (Reuters) - Maruti Suzuki India Ltd(MRTI.NS) has launched a cheaper, more powerful and fuel-efficient version of its Alto - the world's best-selling small car - as competitors including Hyundai and Tata Motors flex their muscles in the entry-level market.

Since 1984, Maruti's entry-level models have outsold anything in India's car market, as millions of middle-class families and first-time owners in the developing country flocked to its Maruti 800 model and its successor, the Alto.

Cheap to buy and run, both cars became instant best-sellers in a sector that Maruti Suzuki dominated until the late 1990s. But as more automakers move into the market, and more Indians get the cash for larger cars, its grip has slipped.

Sales of Maruti's entry-level models are down 21 percent so far in the current fiscal year, hit by greater competition from rivals including Hyundai Motor Co's (005380.KS) Eon and Tata Motors Ltd's (TAMO.NS) Indian-made Nano.

The company, controlled by Suzuki Motor (7269.T), has priced the Alto 800 at 244,000 rupees, cheaper than its predecessor but still more costly than the Nano, which starts at around $2,685.

India's per capita income in the 2010-2011 fiscal year was estimated at 53,331 rupees, according to government data. A five-day family holiday to Darjeeling starts from around 15,000 rupees per person.

"This is certainly going to boost Alto sales that have lagged recently. It will boost the brand," said Ashish Nigam, auto analyst at Antique Stockbroking in Mumbai. "But given the competition... this won't be a game-changer."

China's biggest-selling small car, Chery Automobile's QQ, starts at around $8,800, while the Volkswagen AG Gol, Brazil's most popular small car, starts at $13,750.

Maruti spent 4.7 billion rupees developing the car. The petrol model offers 15 percent greater fuel efficiency than its predecessor, the company said.

"I am sure it will help us in reviving the numbers," said managing executive director Mayank Pareek told reporters at the launch event. "The proof is in the pudding. 10,000 customers have booked the car already, without having any idea of the price."

Maruti Suzuki shares were up almost 2 percent at 2:03 p.m.

"PEOPLE'S CAR"

In 1983, India was selling around 40,000 cars a year. For those able to afford the luxury, choice was limited mainly to heavy, oversized replicas of British cars, most famously the Ambassador, a converted Morris Oxford still made by Hindustan Motors (HMTR.NS) and a favourite of Indian politicians.

Maruti's 800 changed all that, offering a mass-produced vehicle that then-Prime Minister Indira Gandhi dubbed the "people's car". Until 18 months ago, Maruti Suzuki sold every other new car in India.

In the fiscal year that ended in March, it sold over 310,000 Altos, making it the world's biggest selling small car. Indians bought 2.02 million cars that year.

Nissan Motor Co (7201.T), which recently doubled its Indian production capacity, has said it will use its revived Datsun brand to bring a low-cost small car to India in 2014.

(Editing by Daniel Magnowski)

Religion and Politics

REUTERS SHOWCASE

Fund Raising

Fund Raising

Flipkart raises $700 million in fresh funding.   Full Article 

Reforms Push

Reforms Push

Modi may order insurance, coal reforms if vote delayed - officials.  Full Article 

Reuters Exclusive

Reuters Exclusive

India looks to sway Americans with nuclear power insurance plan  Full Article 

To Boost Growth

To Boost Growth

Crank up public spending to revive growth - chief economic adviser.   Full Article 

Bold Steps

Bold Steps

SpiceJet rescue plan marks bold bet on Indian aviation recovery.   Full Article 

New Airline

New Airline

Tata, Singapore Air venture Vistara to take off on Jan 9.  Full Article 

Online Sales

Online Sales

Knock knock. Who's there? Amazon's best-selling holiday author.  Full Article 

Hacking Attack

Hacking Attack

N.Korea says did not hack Sony, wants joint probe with U.S.  Full Article 

Reuters Poll

Reuters Poll

BSE Sensex to hit 32,980 by December 2015  Full Article 

Reuters India Mobile

Reuters India Mobile

Get the latest news on the go. Visit Reuters India on your mobile device  Full Coverage