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Maruti seeks to retain lead through upgraded cars

Veeresh Malik in New Delhi

India's leading car-maker Maruti Udyog Limited is on the threshold of a new era that is likely to see it launch technologically improved cars.

Managing director R S S L N Bhaskarudu is slated to demit office on December 31 this year. On July 16, he was appointed a member of the Public Enterprises Selection Board, a post he is yet to accept formally. MUL is headed by chairman Y Saito, one of Suzuki's nominees on the board of the joint venture.

For the last year, MUL's position as the market leader (85 per cent share) in the passenger car segment has been under stress, after the advent of several new cars. Telco, Hyundai, Daewoo, Fiat, General Motors, Ford, Honda have launched so many models in India that Maruti has come to be perceived as just one more player in the market.

Under a new chief executive, Maruti is expected to strike back into reckoning, though Bhaskarudu is credited with initiatives aimed at helping Maruti to maintain a healthy lead.

An aside: in contrast to MUL's whopping 85 per cent market-share, no other country has a car-maker with 50 per cent market-share.

The car market is abuzz with talk: will Suzuki, arguably one of the best in small-car technology, upgrade Maruti cars? Will MUL expedite the decision-making process? Will former chief R C Bhargava return as chairman?

Official answers are not forthcoming what with the stiff upper lip policy adopted by top MUL managers.

The best-seller Maruti-800 has just about been able to clear Euro-I norms while the Omni could not. Cars powered by alternative fuels like compressed natural gas or CNG and liquefied petroleum gas or LPG may continue to sell in small numbers for a while. But the much-talked-about "new small car" will have to make its appearance soon, say industry observers.

The general expectations are that the new car will be launched in early 2000 and may be priced at Rs 200,000.

Apparently, there is substantial demand for an inexpensive Omni-type van. MUL may simultaneously launch the Wagon-R in two versions, one with a 660 cc engine with turbocharger and the other with a 1000 cc without. It is learnt one of these engines will also be slotted into the existing Omni platform to retain the lower-end of the market.

The Rs 300,000 car segment, comprising Maruti Zen, Fiat Uno, Daewoo Matiz, Hyundai Santro and Tata Indica, is also likely to witness intense competition and technological oneupmanship.

For this is the segment which is displaying the maximum amount of growth. Maruti may seek to regain lost ground by introducing the fuel-injection powered "export" version in the domestic market. When this would happen is not known, but the smart money is on September 1999.

In the mid-size luxury car segment, which stretches from about Rs 500,000 to Rs 1 million, the 1.3 litre carb-driven Maruti Esteem is slugging it out against newer and fuel-injection powered the Opel Astra, the Ford Escort, the Honda City, the Daewoo Cielo/Nexia, the Mitsubishi Lancer and the Fiat Siena. The Hyundai LC Accent, the Suzuki Baleno and the Ford Ikon are slated to be launched in the next few months.

A host of modified versions like a fuel-injection powered Maruti Esteem, a diesel-powered artificially aspirated Maruti Esteem and Maruti Gypsy and an effort to increase presence in the taxi segment are likely to keep Maruti in the news.

The current upturn in sales will be followed by a richer variety of cars and a possible drop in prices, in the wake of competition and improved economies of scale by other manufacturers, say industry analysts.

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The writer is a Delhi-based motoring correspondent. His email address is veeresh@vsnl.com