Maruti preparing for Tata's 1 Lakh car by planning to slash 800 prices by 60,000

[rajdoll]

http://economictimes.indiatimes.com/...ow/2000555.cms
Though it was obvious, but Marutiy has made it official that they are going to pitch their best seller, 800, aginst tata's 1 Lakh car. So far we were only trying to imagine how tata's car would be, but now it has become very clear that atleast half of roads will be taken up by 800s. In my personal opinion 800 at around 1 Lakh is not that bad a deal, let's wait and watch what tatas will provide for the same amount.

[GTO]

And the Goliath slays!!

Neither of the two cars will cost 1 lac on the road. They will surely touch 1.4 lakhs and potentially more. As old as the 800 would be (20+ years), I have a feeling it will still offer a lot more than the 1 lac car from Tata. Till date, the reports suggest that it is going to be assembled by a multitude of players, and will be extremely basic.

My only concern is.....the road traffic situation will become only worse.

[msdivy]

Definitely, traffic is going to get worse. But, a car is anyday safer than a 2 wheeler. Its good news for India !

[iraghava]

Originally Posted by GTO

And the Goliath slays!!
My only concern is.....the road traffic situation will become only worse.

Yup with the situation worsening as it is these cheap cars will only make life difficult for us. It might fulfill Ratan Tata's dream of an affordable car for us Indians but with the Road Infrastructure already inadequate the problems are also going to multiply many fold.

These cheap cars will only add more danger to the roads too as I would have serious doubts about any company being able to manufacture a car with adequate SAFETY at this price. And driver training remaning like it is these cars are only going to become Mobile Death traps not only for the occupants but also for other road users.

[Mpower]

Its going to be a tough fight for the TATA car. But if they come up with something cute like a Smart and the public will fall for it.

Lot of youngsters dont want to be seen in a Maruti 800 these days because its screams cheap.

[supremeBaleno]

All I can say is "Awesome strategy by MUL".

I was thinking that MUL would bring in a new platform (Suzuki Twin ?) to compete with the Tata's 1lac car. But this makes so much more sense economically for MUL. The M800 dies/tools etc have over the years (actually decades) delivered much more than they were expected to and MUL can afford to slash the M800 prices heavily and still have a good margin. Bringing in a new platform would be much more costlier not just in terms of investment in machinery, but also in advertising etc.

[mithun]

And if the prices are slashed, will Maruti take away the already available features of M800 ?

And also it seems to be like that it's going to affect the resale value of all the existing M800 owners...

[Ironmarine]

Well as GTO said the only serious concern is the trafic situation.

To get to office by 9:30 I got to leave by 8 from my home now. Guess what this 1lakh cars are going to do.

[Steeroid]

Originally Posted by supremeBaleno

All I can say is "Awesome strategy by MUL".

They can reduce 800 prices but customers will still have to pay for Petrol. Therein lies the Tata trump - its a DIESEL! Remember we're talking about a VERY price-sensitive market.

All this is very interesting - lets see what Tata have to offer, first. Joz's post makes it look like a mix-and-match of various cars...but it cannot be a smart because it has to be 4 door.

[mtnrajdeep]

Originally Posted by Steeroid

They can reduce 800 prices but customers will still have to pay for Petrol. Therein lies the Tata trump - its a DIESEL! Remember we're talking about a VERY price-sensitive market.

A very good observation, Steeroid! Added to this, the fact that diesels are more fuel efficient that petrol engines and the 1 lac car having a CVT would definitely drive more people towards it as the ease of use is very high in the city traffic!

[supremeBaleno]

Originally Posted by Steeroid

They can reduce 800 prices but customers will still have to pay for Petrol. Therein lies the Tata trump - its a DIESEL!

You have a point, Steer.
But then, there are other variables in the equation - general perception about diesel cars, difference in the quality available at that price point, MUL's long standing reputation with small cars, the M800s trouble free reputation, etc.
All said & done, I am not betting on any of the two, unless a better view emerges of what the product offering is going to be and the price.

Originally Posted by Steeroid

Remember we're talking about a VERY price-sensitive market.

After joining tbhp, all my impressions about only certain segments of the market (lower end) being price sensitive, have been turned on its head. I mean, after seeing posts in "What car" section, that have a person trying to select from between premium C+ or even D segment cars like Civic, Embera, etc and finally saying that they intend to do a LPG/CNG conversion, I have come to the conclusion that the Indian market is price sensitive across the full spectrum.
Pre-tbhp, I would never have thought that a guy willing to spend between 12-15lacs on a car would worry about what he pays for petrol.

[LandCruiser]

I already mentioned in another thread that the traffic is going to be like a nightmare on indian roads once everybody buys a 1 lakh car. Our cities are not at all designed. They are like plants and they grew by themselves in a very complex way. Now with that and this 1 lakh car no one can find parking space. Worst will be there will not be any space to drive on the roads. Already to give an example take the hosur road towards electronic city in bangalore. There are 2 lanes on one side. But people make it like a 5 / 6 lane and drive like hell.

We are all doomed. Be it BWM/Audi/Honda/Toyota/Merc luxury cars simply the 1 lakh car will brush your side and smile at you (heheheeeeee). Sa**a (pardon me) I too have a car!

Coming back to topic from what i read somewhere tata's 1 lakh car will be a 5 people carrier! That is again a good reason for people to go for it. And will people just drive them in the city. No way. They will want to go on a tour to Ooty, Goa and where not. Accidents in highway will increase at an alarming rate. Golden quadilateral kind of roads will become like city roads with too much traffic.

I dont see many Maruti 800's in chennai but if the price comes down to 1.5 lakh or less people will buy them again.

I am going to design a magic sphere that can fly/roll on top of road, cars without breaking and take me to office safely without any injury.

[Steeroid]

Originally Posted by LandCruiser

I already mentioned in another thread that the traffic is going to be like a nightmare on indian roads once everybody buys a 1 lakh car.

Originally Posted by LandCruiser

Worst will be there will not be any space to drive on the roads. Already to give an example take the hosur road towards electronic city in bangalore. There are 2 lanes on one side. But people make it like a 5 / 6 lane and drive like hell.

Originally Posted by LandCruiser

We are all doomed. Be it BWM/Audi/Honda/Toyota/Merc luxury cars simply the 1 lakh car will brush your side and smile at you (heheheeeeee). Sa**a (pardon me) I too have a car!

Originally Posted by LandCruiser

They will want to go on a tour to Ooty, Goa and where not. Accidents in highway will increase at an alarming rate. Golden quadilateral kind of roads will become like city roads with too much traffic.

If our policy makers had thought along the same lines about 25 years back, Maruti would never have happened, we wouldnt have so many opinions about automobiles, and therefore TBHP wouldnt exist for us to argue.

Suppressing aspirations is a very communist way of doing things, and doing so for lack of infrastructure is a socialist viewpoint. Remember that only a small percentage of India's population drives around in cars even today - why should we deny that pleasure to a lot more?

The answer is not in making fewer cars. The answer is in creating quality infrastructure, or at least better infrastructure than we have today.

And finally, I'd like to buy the 1-lakh car for my in-city trips and for small shopping trips and errands when it rains (when I cant take my bike out).

[himanshugoswami]

any idea when this is going to happen? We are planning to replace the Indica petrol back in Delhi and I was thinking of buying the 800 AC if it came for about 1.5L.

[deepakhon]

Originally Posted by Steeroid

Suppressing aspirations is a very communist way of doing things, and doing so for lack of infrastructure is a socialist viewpoint. Remember that only a small percentage of India's population drives around in cars even today - why should we deny that pleasure to a lot more?

Agreed. Govt certainly should find a way for infrastructure development. Just because the Govt can't, it does not mean that Tata or Maruti should not manufacture affordable cars.

On topic, Maruti seems to have taken the easier route. Slashing a few ten thousands on 800 looks like a good decision from the economic point of view for Maruti. They have the product already. Apparently, manufacturing an 800 takes all of around 90 grands. This means that they are selling it at a premium right now. All they need to do now is to give up the premium in search of volumes.

But nothing much can be said as of now because there is no idea about Tata's car yet. I am sure they will design it well and fresh so that people can opt for their car instead of the staid looking 800 which has been there around for decades. Apart from that, Tata has a diesel engine and people know about Tata dsl engines.

In my opinion, it will be an interesting fight.