Maruti Suzuki to launch two new affordable cars in India
What's the story
Maruti Suzuki is planning to launch a couple of new entry-level cars in India that will be priced under Rs. 5 lakh.
According to reports, one of the models will be powered by an 800cc engine while the other will get a bigger 1,000cc unit.
These new cars are expected to arrive sometime next year, and may replace the Alto and Celerio models.
Key details
These models are expected to be launched in 2021
Notably, Maruti Suzuki Managing Director Kenichi Ayukawa has confirmed that the company is indeed working on 800cc and 1,000cc affordable cars, among other models.
The new 800cc variant is code-named Y0M and it is expected to be launched in India sometime around the festive season next year. The 1-liter engine model is code-named YNC and it is also likely to go official in 2021.
Market demand
Prices of entry-level cars have increased by 10-15% in 18-months
But, it is a challenging market. The mini-car segment has shrunk from 25% in 2010 to around 8% in 2020. Rivals like Hyundai and Tata Motors aren't even working in this space because the increased costs make the entry-level cars less viable.
In the last 12-18 months, the prices of entry-level cars have increased by 10-15% while the market has shrunk to just 40%.
Strategy
However, Maruti Suzuki believes the market will remain sizeable
Interestingly, Maruti Suzuki thinks the market for entry-level cars will remain sizeable, considering they are crucial for those who want to graduate from two-wheelers to four-wheelers. However, achieving an affordable price-tag will not be easy.
Ayukawa agrees that complying with the new emission regulations will increase the cost by 10% and the company needs to "find a solution" to keep prices in check.
Information
The company hopes to replicate Maruti 800's success
With the new 800cc model in the pipeline, the company hopes to replicate the success of the iconic Maruti 800. The family car was launched in 1983 and it sold over 2.66 million units in India before getting discontinued in 2014.