1. Maruti Suzuki Alto: From coasting to turbo

Maruti Suzuki Alto: From coasting to turbo

When it was launched, the Alto wasn’t a runaway success—critics even termed it a failure. How it became India’s largest selling car, and will it remain relevant in an ever-changing market?

By: | Updated: March 5, 2016 8:27 AM

“I know the Nano has more cabin space, but the Alto looks, feels and drives more like a car,” says Praveen Beniwal, a 40-year-old entrepreneur from Sri Ganganagar in Rajasthan.

“Because it easily navigates narrow hilly roads,” reasons Rajesh Mahajan from Shimla.

“I think the Kwid looks really good, but for a little more money I can buy the more powerful Alto K10,” says Ankit Chaudhary, a young consultant from Gurgaon.

These are three of the 30 lakh reasons Indians have apparently given to buy the Alto, ever since Maruti Suzuki first launched it in September 2000 with two variants—LX (796cc) and VX (1061cc).

Those were the days of Maruti 800—once everybody’s first car. The Alto was for the adventurous, for the ‘new’ generation.

Then there was the Zen. Launched in 1993, the Zen was still going strong, especially after Maruti went on a massive ‘World Car’ campaign for the product.

In the urban markets, Hyundai Santro was getting popular.

The Alto was considerably expensive. The introductory price for the LX was R2.99 lakh (Maruti 800 was priced R2.12 lakh), while the VX was priced R3.65 lakh (the Zen started from R3.41 lakh).

Slow start

The Alto took a long 37 months to reach 1 lakh sales (October 2003). In 2004, increased localisation, value engineering and rationalising of features resulted in price correction, and it overtook Maruti 800 in monthly sales. The next 4 lakh was reached in 34 months (August 2006).

In March 2006, the Zen was discontinued, and the Zen Estilo arrived in December. The car failed.

From there on it gathered speed. By October 2010, it reached 15 lakh sales; in April 2012, it touched 20 lakh; in March 2014, it hit 25 lakh; and this week it crossed the 30-lakh cumulative sales milestone.

RS Kalsi, Executive Director, Marketing & Sales, Maruti Suzuki, says that the Alto has evolved to reflect the changing India. “While its true essence lies in its remarkable fuel efficiency, performance, attractive price and low maintenance, it has a design that appeals to customers.”

Cosmetic changes

All along, Maruti ensured the Alto got timely botox shots, so that it doesn’t show its age.

In July 2001, it got rear seats with headrests, gear-lever boot and floor console, then considered luxury features. In August, the VXi came with electronic power steering.

In February 2002, it got automatic transmission. In April, the Alto Spin LXi was introduced.

Over 2005-06, it got new headlamps, tail-lamps, front bumper and grille, it also got two-tone interiors and new seat fabric.

“The features reflected evolving market demand,” says CV Raman, Executive Director (Engineering), Maruti Suzuki, and the Chief Engineer of the upcoming compact SUV Vitara Brezza.

Engine change

August 2010 saw the arrival of the Alto K10, with more power, performance and, well, ‘attitude’. Equipped with the K-series, 998cc engine, it got an improved suspension, new cable-type transmission, better braking and more knee-room for rear passengers. People who test-drove it were in for a revelation—how could a one-litre engine be so quick!

Meanwhile, India’s emission standards were getting stringent. The first casualty was the 30-year-old Maruti 800 (1983-2013). So as to retain leadership in 800cc space, Maruti introduced all-new Alto 800 in October 2012, which delivered a mileage of 22.74kpl (up by 15%). The car got a new ‘wave front’ design, fresh interiors, an airbag option and CNG variants. Finally, the two models—bigger and smaller engined—sported different looks.

New generation

November 2014 saw the arrival of the next generation Alto K10. It too boasted of 15% higher fuel efficiency. Importantly, it got Auto Gear Shift—Maruti’s version of automated manual transmission—becoming India’s most affordable automatic. (The GenX Nano with Easy Shift later took the cheapest automatic title.)

New challenges

Last month’s Deloitte India report, Driving Through the Urban Used-Car Market, found that an increasing number of customers are buying used cars for personal use. “With formal networks growing, it is becoming cool to buy used cars,” says Kumar Kandaswami, partner, Deloitte India. “But I don’t think entry-level cars will face major challenges. The share of inter-city driving using a personal vehicle is increasing, and a lot of people from small towns who currently own two-wheelers will graduate to entry-level cars.”

Another challenge is slowing rural sales, and 40% of Maruti’s entry-level products—Alto and WagonR—are sold in rural areas. But analysts believe that a single good monsoon can change that.

Then, the disposable incomes of Indians are rising. A lot of buyers are directly going to compact SUVs or premium hatchbacks. Abdul Majeed, partner, PW, and an auto expert, says that the success of Mahindra KUV100 shows that people are willing to experiment. “To a certain extent, the KUV100 has taken sales away from the entry-level hatchback segment.”

With Renault’s Kwid entering the segment, the competition has only gotten tougher for the Alto, at least in urban markets.

As safety and emission standards become more stringent, that adds a certain cost to the car. Will the Alto remain a value proposition?

“Our job is to keep the cost of ownership low, keeping the price point affordable while improving fuel efficiency,” says Raman. “Moreover, car penetration levels in India are still less than 20 per thousand, which means there is a huge market waiting to get its hands on an entry-level car.”

In the years to come, one thing is certain that the Alto will keep getting better, offering more mileage and features, and all that at a competitive price.

(Prices are ex-showroom, Delhi)

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