Maruti has hiked prices of its models by Rs 20,000-40,000 in view of the upgradation cost and the higher sales tax announced by certain states recently.
MUL, a joint venture between the Indian government and Suzuki Motors of Japan, has a presence in the small car segment (800, Zen), mid-sized segment (Esteem, 1000), and the utility vehicle segment (Gypsy)
The company decreased prices of Esteem LX and VX, while upgraded models of Omni, Maruti 800, Zen, Esteem, Baleno and Gypsy King will carry a heavier price tag.
The upgraded version of these models will carry Euro-compliant engines and multi-point fuel injection (MPFI) systems. These models will be despatched first to states that have hiked sales tax from the current level to 12%. This was stated in a leading business daily.
Maruti has been posting sales growth of over 50% for the past four months (September-December 1999). Its flagship models - Zen, Maruti 800 and Esteem have been doing well and have held up their own against newer entrants. While the Esteem price has actually declined (no reason was mentioned in the newspaper), prices of some models (including Zen, Maruti 800) have been hiked sharply. Given the kind of competition that Matiz, Indica and Santro have been giving Maruti, the company may stand to lose some market share (in the small car) after the price hike.
However, the company plans to launch the Wagon R by January-end. Wagon R targeted at the Zen segment is Japan's largest selling small car. The launch of the car could see Maruti recouping some market share in the Zen segment. The company believes that the Wagon R has tremendous potential and can become the No 1 small car within a few years.
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