Maruti Suzuki gears up for Alto revamp to counter Kwid.

Saj 007

29 Jan 2015
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Maruti Suzuki gears up for Alto revamp to counter Kwid...

MUMBAI: Encouraged by the strong response to the locally developed Vitara Brezza, Suzuki Motor has given Indian unit Maruti Suzuki the responsibility to develop a new-generation Alto to strengthen its hold in the entrycar space.

Having been challenged by the Renault Kwid, Alto’s share in the entry-car segment has dropped to almost 40 per cent from 48 per cent, while the Kwid has managed to garner almost 20 per cent of the segment sales of 40,000-45,000 units a month.

People in the know of Maruti’s plan said the company has started work on the project, internally called Y1K. The new car is likely to be launched by the festive season of 2019 and it will be the most expressive Alto one has seen till date and may even sport a crossover design, they said.

Since the car is going to be developed out of India, it will be tailored for the local market more than ever before. “While the company has made strong headway in the premium end of the market with the Baleno, Vitara Brezza and Ciaz, it will never lose sight of its bread-and-butter segment … as the largest carmaker, Maruti needs to have a solid option for the prospective buyer and Y1K is an initiative on that front,” said one of four people ET spoke to.

The Alto will be developed on a fresh platform to meet new regulations. “The hardware and technology will come from Suzuki, the putting together of hardware — that is design, engineering and validation will be all done by the Indian team with local inputs,” said a second person. AMaruti spokesperson said as a policy, the company does not comment on future product plans.

Last week, Suzuki chief executive Toshihiro Suzuki said the company has big hopes of expanding its India market share further. “The market will grow and we will intensify our product development and network development (in India),” he in an interview to ET.

While Maruti has lost share in the entry A car space, it has been expanding the share in the B segment — priced between Rs 5 lakh and Rs 12 lakh — led by the new Baleno, Ciaz and Brezza.

Overall, the company is sitting on a decade high market share of close to 50 per cent. Along with the new generation Alto, Maruti is likely to revamp its WagonR hatchback (code named YCA) and the Celerio small car (code named YNC) too in the coming three years as part of its plan to launch 15 new products by 2020, as announced in the middle of 2015. The average monthly sales of the Alto has come down to 19,000-20,000 from 21,500 in the last fiscal year.

On the other hand, Renault has seen the average monthly volumes of the Kwid almost doubling to 10,000 units. Another model in the segment, Hyundai’s Eon, has seen a steeper fall in sales to about 3,000 units a month from an average 6,000 units last fiscal year. This is not the first time Maruti has faced competition in a specific segment, a person associated with the company said.

With every new competition, Maruti has only raised the bar of competitiveness, he added. Meanwhile, the company is exploring the possibility of introducing a mild-hybrid in the petrol engine which may take the Maruti's famed high fuel efficiency to the next level, but the decision is yet to be finalised for Alto.

Maruti Suzuki gears up for Alto revamp to counter Kwid - The Economic Times
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