Demand in the rest of the nation would be serviced with the existing fleet, company sources said hereon Monday.

This is as part of MUL's two-pronged strategy under which it will meet the Supreme Court order on emission norms and minimise the squeeze on its bottomlines.

The modifications being brought about on the cars to make them Euro-I compliant would result in a Rs 5,000-10,000 hike in production costs.

"Keeping in view the interests of our customers and the large number of pending bookings, we have decided to absorb the entire cost ourselves. Doing it for the NCR alone would mean a substantial hike in production cost. So we are restricting sales of our vehicles to the NCR," the sources added.

Meanwhile, the company would prepare for full transition to Euro-II norms by April 1, 2000.

As per the Supreme Courtdirective on Friday, car manufacturers have been allowed to sell and register Euro-I compliant vehicles in the NCR without any restriction from June 1, 1999.

All Maruti vehicles would be fully equipped to comply with the Euro-I emission norms with slight modifications. While the Esteem and Zen diesel are already Euro-I compliant, the Maruti 800 and the Zen petrol will be compliant from June one, 1999, "And we are simultaneously working on Omni and Gypsy."

Prior to Maruti, Hyundai Motor India Ltd (HMIL) had announced that its Euro-II compliant Santro would be initially sold only in the NCR, which would effectively mean that the 999cc car would cost more in the region.

"We have decided to launch the Euro-II compliant cars by May-end in the NCR. However, we will not be restricting its sales to within the region. If any customer outside the NCR wishes to own a Euro-II compliant car, he can pay the extra price and have it," HMIL director (sales and marketing), BVR Subbu said. However, the company is yet todecide on the exact quantum of price difference between the Euro-I and Euro-II cars. Hyundai has already stated that its production costs would increase in the range of Rs 25,000 per vehicle.

The Santro is available in three versions with the base model priced at Rs 2.99 lakh (ex-showroom Delhi), Santro DX with power windows and central door locking at Rs 3.49 lakh and Santro DX with power steering at Rs 3.69 lakh.