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Buzz about new Maruti models, Indica wakes up auto market

Veeresh Malik in New Delhi

November has been a mixed month so far for the automobile industry in India. Ditto for Maruti Udyog Limited which has a whopping 80 per cent market share.

The confusion over new income tax rules, the public interest in even minor industry developments, the impending arrival of the small car from Tata, the craze for ''only 1999 model'', have all hammered down sales in October.

Take a look: Maruti 800 sold 11008 pieces, Maruti Zen 5923 (diesel and petrol), Maruti Esteem 1157, Maruti Omni 4778, Ford Escort 144 (diesel and petrol), Opel Astra 250 (diesel and petrol), Honda City 544, Daewoo Cielo 300, Mitsubishi Lancer : 280 (diesel and petrol) and Fiat Uno 600 (diesel and petrol).

It is imperative to point out that very often these figures do not tally with manufacturer claims, the Association of Indian Automobile Manufacturers flash reports or even excise figures. However, the mood at automobile dealer showrooms, the grapevine, information from finance companies and second-hand car dealers have their own story to tell.

October was especially bad, unprecedented for Maruti. Sales dropped almost 30 per cent over the previous month. And as production reportedly dropped to as low as about 300 vehicles per day for a few days in late October 98, panic buttons were pressed. Come November, and fears of pile-up of stocks spread. The holiday season helped Maruti to keep factories shut for some time.

The normal rate is 1200-1400 vehicles per working day, sometimes more, matched by despatches of the same number of vehicles.

Production has at end-November stabilised again at about 1050-1100 vehicles per day matched by increased liftings.

The reason for this, according to trade sources, is that the market which was eagerly waiting for some sort of a price war courtesy the Daewoo Matiz and Hyundai Santro has realised that, for now at least, it is still Maruti all the way.

Thankfully for Maruti, the confusion created by ''new-models-are-coming", "new-models-are-NOT-coming", statements by an assorted group of bigwigs -- industry minister Sikandar Bakht, Maruti chairman Yoshio Saito and Maruti's top executives -- have not taken a heavy toll.

A top official pleads to ''please go by only official sales figures''. ''We wouldn't make statements about our confidential plans, would we?"

But sources in Maruti's R&D and product evaluation groups say, on conditions of anonymity, that, yes, a variety of new models and versions are being put through their paces all over the country right now.

But they will not unveil their plans. They do admit there was a cut in production and despatches, but, no, it was not all due to reduced sales -- unseasonal rains had simply made transporting raw materials inwards and finished goods outwards difficult. Then there was trouble in the business of car carrying trucks, where manufacturers had attempted to play truck operators against rivals. The transport problem was overcome by using customised passenger railway rakes.

Maruti is understood to be ramping up to 1200-1300 units per working day again. Despatches, it is learnt, have suddenly gone through the roof. While figures are not available, sources say movement has been on continuously, day and night, over weekends and holidays, with the Maruti-800 and Omni showing renewed vigour.

The number of new and unsold cars parked inside the factory has gone down tremendously, and this is important from the point of view of employee morale. The other important information is that this revival is coming, to quite some extent, from the non-metro and smaller towns, where a similar upsurge in demand and sales is also being reported by the white-goods and home computer segments.

Here's a lowdown on the proposed new Maruti models. Yes, an economy model of the Zen is on the cards, and yes, the old 1000cc engine is also being considered for a retrofit into both the Zen and the existing 800 cc car/van body-shell. Yes, there is a diesel Gypsy with a 1.5 litre Peugeot TUD-5 engine on the cards and very close to fruition, with a similar fit in the Esteem.

The Wagon-R, in two versions with two engines, is being considered, but that will upset the product-price mix. There are plans to bring in the 1.6 litre petrol engine for the Esteem, too, and the 1.3 litre Zen is already a fact of life, quietly. (Truthfully, the Zen with the 1.3 litre engine from the Esteem is a bolt-to-bolt shoehorn fit and with a few minor adjustments to the suspension, provides about the best driving experience in the country at a very low price).

There is also talk of a multi-point fuel injection system being introduced, but there are doubts about whether the petrol sold in India can support it. A new four-wheel drive vehicle, stronger and tougher, for defence applications, is being tried out.

Maruti is learnt to have come down heavily on the suppliers, by the simple expedient of tapping the non-Maruti suppliers who were tied up with other manufacturers not doing so well.

The confusion about the new models seems to be there only in the minds of the media, not at Maruti where people are very clear about what they are up to.

The real test, or say the next hurdle, that Maruti faces will be in the second half of December. Tata Indica is scheduled for a December 10 launch. Sales have always been miserable in the last fortnight of the year. But, for car-buyers who have deferred purchase for a few months, now is the time to strike deals.

The market is rife with talk about a new government and new taxes and higher prices. And Maruti, sources say, is prepared for even that: It has in its armoury the gas operated Maruti Omni, with options on CNG, LPG and propane.

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