To check sagging sales of its once bread-and-butter 'M800' model, the country's biggest carmaker Maruti Udyog Ltd [Get Quote] on Monday announced a Rs 16,000 price cut, taking it below the Rs 200,000-mark.

The company dropped the price of the non-AC version by Rs 16,286 to Rs 199,000, while the air-conditioned version will now cost Rs 222,000 against the earlier price of Rs 238,000.

Maruti, which rode to the market leader position primarily on account of the popularity of the M800 model, has of late suffered reversal in sales of the model.

Sales of the entry-level car fell as much as 30 per cent in the financial year ended March 31, 2005, to 1,16,262 units from 1,67,561 units in the previous year. Also, in the first two months of this fiscal, the sales of the model dropped to 13,026 units, going down 38 per cent.

"At Rs 199,000, Maruti 800 (Standard) becomes even more affordable for people upgrading from a two-wheeler," the company said.

The company said the car penetration in India still remained abysmally low at about 6-7 cars per 1,000 people.

"The company has now announced an even more attractive price for Maruti 800 to cater to entry-level customers and to expand the market," it added.

The company earlier came out with schemes like '2 ka 4' (to attract two-wheeler owners) as well as special offers for teachers to boost the sales of M800 model.