Seems that the heat has got onto Maruti Suzuki India Limited after the Tata Venture and Toyota Etios were launched. It has been heard that Maruti Suzuki India Limited are looking to cut down the boot size of their entry level sedan, the Maruti Suzuki Swift Dzire and prop it under the 4 meters mark to avail of excise benefits.
The Indian government had earlier laid down a rule that cars coming under the 4 meters mark with petrol engines of upto 1.2 liters whereas diesel engines going upto the 1.4 liter mark would get excise benefits and would be labeled as small cars. The first to take plunge in this game was Tata Motors with their Indigo CS sedan. It was hailed as the world’s most compact and cheapest 4 door sedan. To retain its market share, Maruti are looking to chop the boot of Swift Dzire and let it be a direct competition against the Tata Indigo E-cs. The Maruti Swift Dzire accounts for about 7,000 units per month for Maruti and after the nip and tuck job, it may bring about 3,000 units more.
4.16 meters is the current length of the car and so it has an excise duty of 22 percent attached to it. This squarely puts it in the big car category. This length reduction would bring about excise duty to only 10%. The car would then cost approximately Rs 40,000 to Rs 63,000 less than what it used to cost earlier. It is still unclear how much of this, Maruti Suzuki India Limited would be ready to pass on to the customer. If the company decides to pass on the full benefit, then it would undercut the price of the other compact sedan on the market, the Tata Indigo E-cs. It has been reported that even Mahindra and Mahindra are going to launch a chopped boot version of the Mahindra Logan soon. Well, the car has been even spied testing near Mahindra’s plant in Nashik.
The reason for all this shuffling around in their portfolio is due to the launch of the Toyota Etios and the fact that the Maruti badge cannot compete with the Toyota’s premium one. As of now, due to the numbers game, the Toyota Etios may not threaten to take away Maruti’s pie but then over a certain period of time, sales of the Maruti Dzire would be eroded by the aggressive advertising of the Toyota Etios. The Maruti Dzire may even be refreshed keeping in mind the new Suzuki Swift entering the market in 2011.