While Maruti is planning to launch another small car, Hyundai is thinking of a diesel Getz whereas Honda has decided to push its small car plans forward.
NEW DELHI: The domestic car market is in a tizzy. Not only have the big daddies - Maruti Udyog and Hyundai Motor - announced price cuts for their flagship models after the finance minister announced excise duty reduction for small car in the Budget, these companies are already reworking their strategies to corner a larger small car pie.
While Maruti is planning to add another small car to its existing portfolio, Hyundai is thinking of a diesel Getz whereas Honda Siel Cars has decided to push its small car plans forward.
Take market leader Maruti. Not content with having five - Maruti 800, Omni, WagonR, Zen and Alto - products in the small car category already, the company is planning to add at least one more this year.
Says managing director Jagdish Khattar “The excise reduction from 24% to 16% will give the small car sector the necessary fillip. We will also be expanding our product offering and plan to bring a 1.3 litre diesel car this year.”
While Khattar declined to specify if the company’s hottest model - Swift - would sport this diesel engine, market analysts point out that the new small diesel car from Maruti could be either Swift or Esteem.
And Maruti’s closest competitor, Hyundai Motor, is not planning to keep quiet either. Not only has the company decided to expand production of flagship car Santro by running an additional shift, plans are also afoot to bring a diesel version of premium hatchback Getz.
Says President B V R Subbu, “We have decided to hike production of Santro, by working three shifts from next week. This will take up production capacity to about 4,000 cars every month. We are also looking at bringing in a diesel variant of Getz within the next six months”.
While he declined to specify whether the existing petrol Getz will be tweaked (Getz sports a 1,300 cc petrol engine at present) so that it can avail the tax breaks announced for small cars, analysts did not rule out the possibility.
According to the Budget proposal, a small car has been defined as one that is up to 4,000 mm in length and has an engine no bigger than 1,500 cc (diesel) or 1,200 cc (petrol).
Among existing brands, Maruti 800, Omni, WagonR, Zen and Alto from the Maruti stable, Santro from Hyundai Motors and Indica diesel from Tata Motors qualify for lower excise duty. Premium hatchbacks Swift and Getz do not since both sport petrol engines with capacities higher than 1,200 cc.
Meanwhile, Honda Siel Cars is also reworking its small car plans for India.
Says general manager marketing Rajive Saharia: “With the budget concession to small cars, we will go back to the market for an in-depth study and perhaps accelerate our entry into small cars.”
There have been reports of Honda considering the Jazz platform for launching a premium hatchback in India.
And even as the leading car manufacturers have already begun strategising for a larger share of the small car pie, two imminent entrants - general motors and Toyota - have not reacted to the Budget sop as yet.
GM is known to be keen on launching a small car in the country (apart from AVEO UVA which it has already previewed) whereas Toyota has been working on its own small car in tandem with Daihatsu. Officials of both these companies did not respond to repeated calls by DNA Money.
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