Maruti Suzuki is planning to launch two new cars in the entry-level segment, both of which would be priced under Rs 5 lakh. One of the cars would be an 800cc, while the other would be powered by a 1-litre engine. Maruti Suzuki is planning these launches at a time when competition is easing in the entry-level segment.
Maruti Suzuki Managing Director Kenichi Ayukawa confirmed that the company was working on an 800cc car among multiple models, as mentioned in a report in The Economic Times. The local unit of the company in the country currently sells the Alto with an 800cc engine and the Celerio with a 1-litre option.
The 1-litre engine compact car, code-named YNC is likely to replace Celerio. The new 800cc car, code-named Y0M is expected to be launched by the festive season of 2021. Maruti Suzuki is also likely to decide on the future of Alto closer to the 2021 launch of the 800cc car. Another 800 cc that became one of the company's most popular offerings was Maruti 800 that was launched in 1983 and discontinued in 2014. Over 2.66 million units of the Maruti 800 were sold in India during its course.
Ayukawa told the daily that developing a small car is not a cheap affair considering they have to comply with the new safety and emission regulations. These measures spike the cost by 10 per cent on entry level and make it challenging, he said. "We have to still find a solution on the same," he said.
Maruti Suzuki's competitors Hyundai Motor India and Tata Motors have given up on building products for the entry-level space. They believe that increased costs would make the entry-level cars non-viable.
While the mini-car segment has shrunk from 25 per cent in 2010 to less than 8 per cent, Maruti Suzuki feels it will remain sizeable. It believes that mini cars are a stepping stone for the millions who aspire to graduate from two-wheelers to four-wheelers.
Due to the 10-15 per cent increase in entry-level car prices in the last 12-18 months, the mini car market shrank to over 40 per cent to 2.45 lakh units. The report mentioned that Maruti Suzuki wants to ensure that the products remain affordable even in the new regulatory regime. It also aims to keep its market share of over 50 per cent.