Maruti to challenge 1 lakh car with 800

On the one side Suzuki has raised apprehensions on Tata 1 lakh car (jeh) , but on the other side it seems to be preparing to face the battle. Maruti Suzuki’s newly assumed Shinzo Nakanishi recent comments is clear indicator of Maruti’s plan. “We have been saying for the past few quarters that the current profit margins are not sustainable and will be under pressure. Given our massive investments, changing product mix, and new model launches, these profit margins are not sustainable in the future. We will focus on complete customer satisfaction and overall consolidation, even if it means sacrificing some profits in the short term,” Nakanishi told. Cutting prices may help Suzuki maintain dominance in its biggest market as the company faces greater competition from Tata and foreign rivals including General Motors Corp. and Hyundai Motor Co. Other automakers including Renault SA have also proposed selling ultra-cheap cars in India, the world’s second- fastest-growing major auto market. But cutting prices cannot save the Maruti Suzuki from losing it market share. According to CSM Worldwide estimates Suzuki’s share in India may drop to 24 percent in 2013 as cheap cars increase competition. Maruti Suzuki currently holds 50 percent share in India’s passenger car market. “So far, it’s been easy to maintain a 50 to 55 percent share, because there weren’t strong competitors,” Nakanishi said yesterday. “But from now on, it won’t be the case.”  Maruti Suzuki may cut the price of its cheapest car ‘800’ to counter Tata Motors Ltd.’s proposed 100,000 rupee ($2,500) car.“We will have to do at least that,” Shinzo Nakanishi, said in an interview at the company’s head office in Hamamatsu, Japan, yesterday.

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