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Home > Business > Business Headline > Report

Maruti won't cut price to take on Tata

January 10, 2008 02:45 IST

Maruti [Get Quote] Suzuki India will not cut the price of its hugely popular 800cc model or launch a smaller model to take on Tata Motor's Rs 1 lakh people's car, according to Managing Director Shinzo Nakanishi.

Tata Motors [Get Quote] will unveil its small car on Thursday, the opening day of the 9th Auto Expo in the capital. The Maruti Suzuki chief said he would visit the Tata Motors pavilion, and added in jest that he would take his engineers along with him.

Only recently, Suzuki Motor Corporation's Chairman Osamu Suzuki said it would be difficult to make and sell cars at the Rs 1 lakh price point.

Asked about the impact Tata's ultra low cost vehicle may have on Maruti's dominant position in the market, Nakanishi said a lot would depend on the growth of the market in the coming years.

Assuming the market grew to 2 million units by 2010, he said Maruti Suzuki hoped to sell a million units and maintain market leadership.

"That (one million units) is the capacity we have committed to have by 2010. So, if the market (hypothetically) grows to 3 million units, we will have a third of the market share," he said.

The company, Nakanishi said, would beef up the engine development programme and a new one-litre engine would go into the yet-to-be-launched A-Star, expected in India by the year-end. The concept form of the A-Star was displayed at the Auto Expo on Wednesday.

Capacity at the new plant at Manesar, Haryana, would be scaled up to make three lakh engines, for the export market too.

Nakanishi said the company would make fresh investments in R&D in India that would mirror its the facilities in Japan.

The company had said last year that it would invest Rs 1,750-3,500 crore over three to five years to beef up R&D here.

This investment would be utilised initially to effect changes on new variant launches, and ultimately focus on new product development. Design and styling, he said, would come last.

The location for a new R&D centre is yet to be finalised.

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