Maruti Suzuki Plans New Small Car Launch within 3 years

NEW DELHI: The country’s largest car maker Maruti Suzuki, which has in recent times made a strong pitch in the midsize market with the Vitara Brezza, the Baleno and the Ciaz, is looking to launch a small car in the next three years to strengthen presence in the entry-car space.

 
“We are working on a pipeline of products across segments, and are looking at a small car at the entry-level which will come in the next 2-3 years,” confirmed Kenichi Ayukawa, managing director, Maruti Suzuki India Limited (MSIL).
 
Earlier in October this year, ET had reported that Suzuki Motor Corporation (SMC), enthused by the success of Brezza, gave Indian subsidiary the responsibility to develop a newgeneration Alto to strengthen its hold in the entry-car space.
 
Maruti Suzuki Alto had been facing tough competition from Renault Kwid; in the first eight months of the ongoing financial year, while sales of Alto declined by 7.4% to 1,62,894 units, that of Renault Kwid shot up to 73,676 units from 11044 units sold in the year-ago period.
 
Alto's share in the entry-car segment has dropped to 42% between April and November this fiscal compared with 50.9% in the same period last fiscal. Kwid has, meanwhile, managed to garner almost 20% market share in that segment.
 
People in the know of Maruti’s plans said the company has started work on the project, internally called Y1K. The new car is likely to be launched by the festive season of 2019. Alto will be developed on a fresh platform to meet the new regulations. Maruti Suzuki will invest an added Rs 2,000 crore at its state-of-the-art research and development centre in Rohtak, Haryana, over the next three years to boost its R&D capability. This would take the company's total investment at Rohtak to Rs 3,800 crore.
 
Separately, Maruti Suzuki chairman RC Bhargava on Friday said the trend is reversing in the passenger vehicle market and the company's bookings have increased by 7% in December. Maruti Suzuki's bookings had registered a drop of 20% in November as consumers put off fresh purchases after the government demonetised high-value currency notes from November 9.
 
"Interestingly, even rural markets have grown over last year," said Bhargava. Maruti Suzuki's sales in rural markets have increased by 18% in December against a decline of 11% in November. The proportion of vehicles financed in rural markets stands at around 50-60% compared to 80% in urban areas.
 
"What I understand is that cash availability has improved. Besides, good monsoons helped grow rural sales in the first few months of the fiscal," said Bhargava. Rural sales currently account for 30% of Maruti Suzuki's volumes and have grown by around 14% till date this fiscal. He, however, declined to make any forecast for sales growth next year. 

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