Maruti Udyog has taken note of the seemingly steady demand for its small cars. It has announced price hikes ranging from Rs 4,000 to Rs 10,000 for five of its models -- three versions of its 800cc model and two versions of its Zen model.
This is the first time Maruti has decided to pass on what it calls input cost increases to the consumers after its December 1998 panic reaction on the eve of the Indica launch. It had then slashed the prices of six of its popular models. Maruti has now increased the standard 800cc car's price by Rs 10,000. Ex-showroom, Delhi, the car is available at Rs 1,91,584. The price hike for the deluxe version is Rs 7,062 (to Rs 2,37,782) and that for the Maruti-800 EX Rs 6,531 (Rs 2,12,290).
In the Zen category, the prices of two models, the Zen LX, and the Zen VX, have been increased by Rs 8,000 and Rs 4,000 respectively. The Zen LX will now cost Rs 2,97,575 and Zen VX Rs 3,43,800. There is no escalation in the case of the other two petrol models of the Zen -- the Zen Classic and the Zen AT.
The fact that the Zen diesel version's performance has not been satisfactory has prompted the company to make a marginal reduction of Rs 3,920 in its tag, and price it at Rs 4,14,265. In December 1998, the company had brought down its price by Rs 36,000.
It is not clear how the price increases will affect the Zen's prospects in a market where Hyundai's Santro is fast gaining popularity. In August 1999 Hyundai sold 7,000 Santros against 7,900 Zens. While the Zen recorded a 1.14 per cent increase in sales compared to July 1999, the Santro had registered a phenomenal 41.5 per cent rise. Hyundai is claiming that it will soon overtake the Zen in this segment.
Then there is competition from the Indica too. Telco has almost solved its teething problems, and the output of the car has steadied. The company also plans to clear its pending orders and make the vehicle available off-the-shelf sometime towards the end of 1999. Remember, the Indica has a clear price advantage over its rivals.