India's largest car maker has also begun to offer discounts of Rs 15,000 in Mumbai on the Zen diesel, launched last year to take on the Uno diesel. Dealers said the Zen-D has failed to impress potential buyers and falling back on rebates was the last resort to push even small numbers into the market.

Several promotion schemes are also being doled out with some dealers in the capital even offering sops like free holiday trips. The company dealers said that Esteem sales have been slowing down over the past few months and with stocks piling up with the dealers, discounts and sops are being offered.

Auto analysts said that with several new models slated for launch during the next 18 months in Esteem's category, prices will continue to be under pressure.

"Entry of models like theFiat Siena with a similar price tag and a more contemporary look have had an adverse effect on Maruti's sales. Saddled with large inventory pile-ups, the dealers have no choice but to offer these large discounts," dealers said.

For the Esteem, offered in three versions - LX, VX AND AX - discounts are highest for the AX version at Rs 25,000. The AX carries a price tag of Rs 6,01,841 (ex-showroom) in Delhi and Rs 6,63,394 in Mumbai.

The LX version carries a price tag of Rs 4,75,607 and Rs 5,26,300 in Delhi and Mumbai, respectively, while the VX version is priced at Rs 5,42,116 and Rs 5,98,530 in the two major metros.

Some of the other Maruti models like the popular M800 is currently enjoying a premium of around Rs 7,000-8,000 in the capital, they are being offered at a paltry discount of Rs 1,500 in Mumbai.

The company was initially offering discounts up to Rs 60,000 in Delhi for the Zen-D which was subsequently withdrawn. Maruti had also slashed the price of the model in December when it had announcedsimilar cuts for the M800 and Omni, and had introduced a cheaper Zen model in the LX version, primarily to take on Hyundai's Santro and Daewoo's Matiz.

Industry watchers said this latest move by Maruti is in keeping with the trend in the market. "Buyers for the car are vanishing by the day and inventories are piling up. The dealers had no other option but to trim the price tag to remain in the market," they added.

Maruti had also been severely hit with the recent Supreme Court ruling on emmission norms. The national capital region (NCR) accounts for nearly 30 per cent of the company's total sales.