Maruti hikes diesel car prices by up to 10,000 rupees

[.sushilkumar]

I think this is a clear case of " make Hay while Sun shines " .

To quote from news article

Rising costs of many raw materials have dented carmakers' margins in India, forcing them to raise prices, further hurting demand already hit by high interest rates and fuel prices that are deterring potential customers.

the Increase in RAW material cost has pushed them to increase the prices . I guess they are using same RAW material in petrol cars as well than what prompted them to go after diesel cars Only or is it so that they have developed a technology where no RAW Material is used to make Petrol CAR , they simply come like that from abodes above our heads .

[muni]

Originally Posted by shashank.nk

Back to topic, my dealer told me that the ZDI in blore is up from 7.8l to 7.9l, so effectively meaning the 10k hike is an on-road hike.

But few people who booked the Swift were saying its a ex-showroom hike. Can anyone confirm ?

It was 7.77L before if am not mistaken. Exact price before and after would clear the air. It is usually the ex showroom price that manufacturers increase.

I guess you have done your swift booking and how long is the waiting period

[A350XWB]

Dear all (supremeBaleno , ethanhunt123 & CrAzY dRiVeR)
Before pouncing upon me, please read the post
http://www.team-bhp.com/forum/indian...ml#post2578678 (Maruti hikes diesel car prices by up to 10,000 rupees) and the specific sentence "So is there really an option to Swift Diesel ?". My post was specific to this question. Like you told, people should understand that everybody's requirement is not the same. Never in my post, I have written that the Swift is a bad car. I only replied that "Yes, there are alternatives to the Swift".

Originally Posted by CrAzY dRiVeR

It would be mature if you understand others have requirements too, that may not match with yours. People (even layman or those 'who cannot open the bonnet') have requirements when they upgrade their cars.

I agree and don't you think that the above quoted sentence also does not reflect this sentiments? Statements like "no option to the Swift" is also far-fetched, correct?

Originally Posted by supremeBaleno

OT : I see you listed a series of reasons for buying Figo-D, top of which was better driveability. Compared to what ? I drove a Figo-D couple weeks ago which belonged to Ford DSFL programme and the drive was uninspiring. Maybe not as bad as the Polo-D, but almost there. So to each his own.

Compared to most diesel hatches apart from the Micra. The driveability is better due to the linear power delivery. I never used the word performance here.

[sunnyworld]

Originally Posted by CrAzY dRiVeR

And this applies to the members of this forum?

Swift is as much a popular car here, as it is with outside the forum - with people 'who cannot open the bonnet'. And thats because - as GTO stated in his review - Its one of the rare mass market cars that is actually fun to drive!

Good to know the car suits your requirements!

It would be mature if you understand others have requirements too, that may not match with yours. People (even layman or those 'who cannot open the bonnet') have requirements when they upgrade their cars.

To some, it may be better driveability - to others better fun.
To some better safety equipment - to others a tension free ownership experience.
To some better rear seat - to others better front seats.
To some it may even be a free umbrella. (No offence Sir Yeti. )

Its another general trend in this forum to think of ourselves as 'technical' people and to think of the masses as 'herd mentality'.

I really dont understand this logic!

At Bangalore OTR prices - Figo is a 7L car. Swift is an 8L car, i20 is a 9L car. Difference is still the same as in other states! How does it make Figo/ any other car more VFM than the other?

I am sorry I should have been more clear. I was looking at this from purely price point of view. I am not willing to spend more than 7L for a hatch (and that too only because I live in Bangalore).
For that price, I can get Swift VDI and Figo Top end.

Swift VDI has poor brakes, no ABS, no Airbags, no Music system plus a lot of other goodies like bluetooth.
Figo has all of the above plus a decent sized boot.

The reason I mentioned Bangalore is 8L is a heck of a lot of money to spend on a hatch. Maybe in Delhi, where the tax isn't too steep and Swift top end might come in 7 to 7.5 Lac range, I could have considered it (more so because I have other cars to fall back on in Delhi)

[supremeBaleno]

Originally Posted by anachronix

Well, do we really have to call them doing bad!? They are doing bad comparing them to the other products from MSIL portfolio. Otherwise, they are not market duds by anyway

Oh, the A-Star & Estilo are market duds for sure. Compare them to their peers and it would be clear. Ritz cannot be called a dud, but IIRC it's peer, the i10 is doing atleast twice its numbers. SX4 - well with the new (& capable) entrants into the C segment & Honda slashing prices for City, is someone actually buying it ?

Originally Posted by anachronix

Missed the smiling rear!? I liked the front and side profiling a lot! ....... the next price hike on the Swift in the name of input costs

I walked around the new Swift and don't like any bit of it - front, back or side. But I guess I am in a minority. Or maybe because I have the older version and there is a subconscious partiality to the car I own.

Yeah, for all we know, the input-cost thing is a load of bull. Like .sushilkumar mentioned, why no input cost increase for petrol models ? They just seem to be making hay while the sun is shining.

Originally Posted by A350XWB

Compared to most diesel hatches apart from the Micra. The driveability is better due to the linear power delivery. I never used the word performance here.

I am not a diesel guy & have not driven many of the hatches, but I found the Figo to be sluggish - there were 4 tbhp-ians on board returning after the DSFL practical sessions and the car seemed to be making a huge effort to move. Anyway, if you find it good for your needs, that is what matters. Peace and lets move on to the topic of MSIL making a killing.

[A350XWB]

Originally Posted by supremeBaleno

I am not a diesel guy & have not driven many of the hatches, but I found the Figo to be sluggish - there were 4 tbhp-ians on board returning after the DSFL practical sessions and the car seemed to be making a huge effort to move. Anyway, if you find it good for your needs, that is what matters. Peace and lets move on to the topic of MSIL making a killing.

No hard feelings buddy (Performance is not the forte of the 1.4 TDCi anyway)
Coming back to the topic, I saw an adv today in the newspaper here in Bangalore regarding offers on Maruti models (obviously only on petrol models), ranging from 20k on the Omni to a whopping 50k on the Estilo. no such offer for the Swift petrol though. So, I think Maruti is giving discounts on the petrol and recovering the money through the sales of diesel models.

[supremeBaleno]

^^^And today's newspaper in Kerala has an advt for WagonR at 3.15lakhs - obviously on the lowest LX model and the price is after factoring in all discounts & special offers. Turned a page and see (yet) another lowest offer on the Spark @ 3.19L. The Spark seems to be a special 'Advantage' edition and looks like a good deal since they are throwing in a lot of freebies like MP3player+speaker etc. Looks like times are good if you want to buy petrol cars (new or used), though it will hurt when you fuel the car.

[ethanhunt123]

Originally Posted by .sushilkumar

I think this is a clear case of " make Hay while Sun shines " .

To quote from news article

the Increase in RAW material cost has pushed them to increase the prices . I guess they are using same RAW material in petrol cars as well than what prompted them to go after diesel cars Only or is it so that they have developed a technology where no RAW Material is used to make Petrol CAR , they simply come like that from abodes above our heads .

One question for you - What if you were incharge of pricing at Maruti and you got a cost report that the raw material prices are going up for Swift by say 6 thousand. What would you do ? Would you increase 6k each on Petrol and Diesel knowing that Petrol anyway hardly sells and you would probably have to increase discounting on Petrol version by the price increase to move units ? Increasing discounting means you are not recouping the cost increase on Petrol Swifts. So what do you do ? You dont touch pricing on Petrol, but increase Diesel Swift by 10k to compensate for customer's lower willingness to pay a higher price for Petrol Swift.

Effect - Your overall cost increase for Swift production in recovered by overall price increase in Swift without any increased discounting. This is plain business logic. You might argue that it's unfair to diesel customer to pay for higher production cost for Petrol car, but looking at the market situation right now - its the only possible step for any company to recover higher cost.

PS: I am assuming that input costs went up as reported. Even if they didnt, whats wrong in charging a higher price if the customer is willing to pay. Simple economics. Maruti is in business to make money and not to Jan Seva. It's competitors are free to come up with lower priced cars which customers would buy over Swift.

[.sushilkumar]

Originally Posted by ethanhunt123

One question for you - What if you were incharge of pricing at Maruti and you got a cost report that the raw material prices are going up for Swift by say 6 thousand. What would you do ? Would you increase 6k each on Petrol and Diesel knowing that Petrol anyway hardly sells and you would probably have to increase discounting on Petrol version by the price increase to move units ? Increasing discounting means you are not recouping the cost increase on Petrol Swifts. So what do you do ? You dont touch pricing on Petrol, but increase Diesel Swift by 10k to compensate for customer's lower willingness to pay a higher price for Petrol Swift.

Well If the RAW material cost has really increased , i will try to absorb it with in. if i am selling a car for 7 + lakhs, i am sure that my margin is enough to absorb that small rise in cost . I might also pass on this increase a bit to business associates and distribute it across the board and even if than also i am forced to increase cost, i will make sure that cost is spread across all the affected models rather than trying to pass the cost to one particular type of model which is moving fast . here also petrol cars still constitute some 20-30 % of total sales, so saying that petrol's are hard to move will be a bit of over statement IMO .

Originally Posted by ethanhunt123

Effect - Your overall cost increase for Swift production in recovered by overall price increase in Swift without any increased discounting. This is plain business logic. You might argue that it's unfair to diesel customer to pay for higher production cost for Petrol car, but looking at the market situation right now - its the only possible step for any company to recover higher cost. .

About what cost you are talking about here. what ever cost they are incurring on diesel is recovered by selling that along with some profit . what about those extra 4K which were never spend by MSIL in first place as they are assuming that it will used to make a petrol car which per se you is not selling. so in the end MSIL is earning a handsome 4 K pure profit if we assume your cost model above.

Originally Posted by ethanhunt123

PS: I am assuming that input costs went up as reported. Even if they didnt, whats wrong in charging a higher price if the customer is willing to pay. Simple economics. Maruti is in business to make money and not to Jan Seva. It's competitors are free to come up with lower priced cars which customers would buy over Swift.

that;s what i have said , Above " Make Hay while Sun shines " And as for as above in bold goes than those are not fair business practice my friend .Market does n;t work that way. For long term gains , you need to loose some time in short term and legally also anybody can drag MSIL to CCI . it;s just that people are not well informed . try doing this in a Mature market and you will be sued in court legally.

[San Phrangmung]

Most sellers are offering year end discounts and free goodies on petrol mods but none in diesel ones.

With most of the brigade out with their small car offering now and recent launch of Eeon, maybe its going to be a much better year for the consumer bargaining power wise.

And, Somebody give a Swift Micra comparision as well pls.

[supremeBaleno]

@.sushilkumar, sued for increasing prices of a product that someone manufactures and sells in a free market economy ? Not true. If it were, we should be suing manufacturers left, right and centre, since everyone raises prices.

Also the long-term thing does not apply here. If MSIL was a new entrant to the market with a new product, yes it would benefit them to sell cheap initially, gain market acceptance and reap benefits later. But not the case here, where they are the market-leaders with close to half the market share and the best in small cars. More so, the Swift has been selling like hot cakes and the bookings indicate the same to continue in near future.

But, yeah, I agree with you that in all probability this input-cost thing is mostly a load of bull and they are using it as an excuse like other manufacturers.

[.sushilkumar]

Originally Posted by supremeBaleno

@.sushilkumar, sued for increasing prices of a product that someone manufactures and sells in a free market economy ? Not true. If it were, we should be suing manufacturers left, right and centre, since everyone raises prices.

well nobody will sue you for increasing prices if they are reasonable and well documented, but the reason here is completely fishy. you are giving excuse of raw materials here and In same model , you increase on one but leave other .Why ?

In above scenario's you can be sued as to a end customer Both the Swifts are same. why one is getting discriminated while other is enjoying out in the sun.

between completely OT IMO

I am in tokyo and in 20 days of my stay i have seen only 2 swifts so far, few no;s of yellow plate Suzuki Every ( mainly cargo vehicles for courier deliveries )and a single A-star disguised as a Alto and i thought suzuki was a japanese manufacturer. they don;t sell decently in Japan IMO . TOYOTA and NISSAN rule here and a distant third spot to honda / BMW;s / Mercs

[rameshnanda]

Well, if the increase in prices for a Diesel car is justified, Why did they just increase the Ritz diesel by 2K and Swift by 10k? Its very clear that Maruti wants to capitalize the demand they have for the Swift. As .sushilkumar said, "Make hay while sun shines" is very much true in this case

[ethanhunt123]

Originally Posted by .sushilkumar

Well If the RAW material cost has really increased , i will try to absorb it with in. if i am selling a car for 7 + lakhs, i am sure that my margin is enough to absorb that small rise in cost . I might also pass on this increase a bit to business associates and distribute it across the board and even if than also i am forced to increase cost, i will make sure that cost is spread across all the affected models rather than trying to pass the cost to one particular type of model which is moving fast . here also petrol cars still constitute some 20-30 % of total sales, so saying that petrol's are hard to move will be a bit of over statement IMO .

If i am a shareholder of Maruti, why should i be OK with Maruti absorbing the cost increase and not passing it on to the consumer IF he is willing to pay for it ? Anyway Maruti has lost a lot of money this year due to strike, they wont be willing to absorb any cost. As far as other models are concerned, Swift is the model where consumers would be most willing to pay more.

Alto - Under pressure from Eon, cant raise price
Estilo/Wagon R - No diesel model, cant increase price beyond an extent
Ritz - Limited market appeal, even when its available off-shelf and Swift has a 12 month waiting, people prefer Swift. Cant increase price beyond an extent
SX4 - Already laggard and value is its playing card

Originally Posted by .sushilkumar

About what cost you are talking about here. what ever cost they are incurring on diesel is recovered by selling that along with some profit . what about those extra 4K which were never spend by MSIL in first place as they are assuming that it will used to make a petrol car which per se you is not selling. so in the end MSIL is earning a handsome 4 K pure profit if we assume your cost model above.

I assumed 6k each. Lets assume cost increases by x each on Diesel & Petrol with a split of 20-80 for Petroliesel. Considering the fact that petrol price rise is not feasible, Maruti would have to increase the price of diesel by 1.25x And keep in mind this is assuming people dont withdraw booking of diesel cars due to 10k increase. (I think this will be the case). So net net Maruti doesnt lose any money.

Originally Posted by .sushilkumar

that;s what i have said , Above " Make Hay while Sun shines " And as for as above in bold goes than those are not fair business practice my friend .Market does n;t work that way. For long term gains , you need to loose some time in short term and legally also anybody can drag MSIL to CCI . it;s just that people are not well informed . try doing this in a Mature market and you will be sued in court legally.

Drag Maruti why ? Maruti does not dominate market with >80% market share anymore. So its not a monopoly. And everyone has freedom to price their products with margin they think is fine, the customers will give their verdict by buying it if they think its still worth it. Simple rule of demand and supply. BTW give me an example where a price increase of ~1.4% (10k/6L) in a mature market or otherwise led to company being sued ? If this was the case, no company would have ever been able to raise prices. BTW your logic of both Swift's being same hence legally price rise on one not possible - FALSE. Swift Petrol and Swift Diesel are two different products. Company is willing to price them as they wish seperately.

[shashank.nk]

Originally Posted by sunnyworld

[/b]

I am sorry I should have been more clear. I was looking at this from purely price point of view. I am not willing to spend more than 7L for a hatch (and that too only because I live in Bangalore).
For that price, I can get Swift VDI and Figo Top end.

Swift VDI has poor brakes, no ABS, no Airbags, no Music system plus a lot of other goodies like bluetooth.
Figo has all of the above plus a decent sized boot.

Well if you compare the mid-variant of a car in a higher segment (higher segment based on price) with that of a high-end variant of a car in a lower segment, you're bound to find the latter more VFM. IMHO, you should compare the Ritz with the Figo, as they are priced similar. The base variant of the Swift is about 30k more than the base Figo.