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Old 5th February 2010, 21:18   #331
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Maruti's decision not to reduce prices makes complete sense financially in a short term but what about long term losses that may be caused due to questions being raised about their ethics and morals, and also the fact, such an act makes a complete mockery of government benefits. These are meant to be shared between customer and manufacturer and not hogged completely by manufacturer.

Maruti may be a market leader at this point and has a good waiting period for the vehicle and may get away with this but the market is going to increasingly become open with european and american heavyweights beginning to flex their muscles and such decisions could come back to haunt them at later stage.
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Old 5th February 2010, 23:54   #332
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I know it sounds OT , but is there any govt. agency to keep a tab on pricing adopted by a company , any regulatory body or something on the same lines?
By the way Maruti being the biggest & a matured indian manufacturer should have passed on the excise benefit to the customer & set a good example for others to follow. The swift is already 5 years old & although still looks very contemporary is into some tough times ahead because of the competing brands set to fight it out in the near future.Good luck Maruti.
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Old 6th February 2010, 00:52   #333
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Originally Posted by piyush78 View Post
I know it sounds OT , but is there any govt. agency to keep a tab on pricing adopted by a company , any regulatory body or something on the same lines?
No. But there is one one agency called the Government of India which takes tens of thousands of rupees on every car sold in the form of excise and other duties.

I don't think what Maruti is doing is ethically or morally wrong. There are in it to make money and they can do whatever the hell they want. All I can do is buy the car I like the most within my budget.

I also don't see how this defeats the purpose of the lower excise duty, as some of you have put it. My guess would be that the GoI's rationale behind the lower excise rate was to encourage manufacturers to build smaller and fuel efficient vehicles - and in the case of the Swift, they succeeded. They don't and should not care about who the money ends up with, the manufacturer or the customer.
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Old 6th February 2010, 01:23   #334
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A rough, behind the envelope calculation, suggests that with a 12% reduction in the Excise Duty Maruti should save roughly between 35k and 40k per car in Excise Duty alone. Now the question that may come up is that is the cost of the new engine (what is new by the way? Is it a grounds-up new engine or an incremental development?) so high as to make this whole saving vanish completely. IMO, even if Maruti had passed on at least 20k in the price savings they could have taken the moral high ground. Retaining the whole of 40k does not sound very logical/ethical to me.
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Old 6th February 2010, 08:58   #335
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Originally Posted by tacho View Post
My guess would be that the GoI's rationale behind the lower excise rate was to encourage manufacturers to build smaller and fuel efficient vehicles - and in the case of the Swift, they succeeded. They don't and should not care about who the money ends up with, the manufacturer or the customer.
That logic is skewed. What is the point in encouraging manufacturers to build small cars if they are not bought? The whole point of having the excide duty cut is to entice customers to buy these smaller cars which would be easier on the environment and the roads.

This is not a scheme for the govenment to give away money, else they would have done so through ration shops.

I feel, they should have passed it on to the customer. But, it is a free market, nobody can force Maruti.

Quote:
Originally Posted by erohit View Post
There margin on old swift was not high (not in league of margin on i10 and i20). And now since they invested heavily on new K12 engine they should atleast increase the margin on their portfolio to cover up the R&D cost.
This is not the first car, where they are putting the K12 engine. They priced the Ritz petrol decently.
Quote:
I still don't think it is overpriced vehicle. If Hyundai can sell their overpriced products (i20, i10) in good numbers then why not Maruti can sell their VFM products with better profit margins.
For the quality of the their cars, the Hyundais are not overpriced. The Swift is a badly built car, cost cutting being the ONLY reason. A 4.5 year old Swift belonging to my friend is already falling apart. The i10s and i20s will surely last a lot more years.

Last edited by civic-sense : 6th February 2010 at 09:09.
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Old 6th February 2010, 09:55   #336
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Why should the margin on the old Swift be low ? It sells in large volumes, used a completely 'cost-recovered' G-series engine block modified from the Esteem. I would say it has similar if not higher margins on Swift than Hyundai has on i10!
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Old 6th February 2010, 10:23   #337
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If Swift and Ritz with 1.2 k series engine have marginal difference of 4k to 5k there would be lot of potential customer who will opt for Swift over Ritz. Currently the price of Ritz & Swift with same models does vary, thus keeping the price of Ritz lower than Swift, MUL's strategy will be to push up the sales of Ritz although the sales of Ritz Petrol is good if not better, they would not want Swift petrol to outwit the sales of Ritz petrol.
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Old 6th February 2010, 10:28   #338
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Business Ethics ; Morals ; Bottom-Lines ; and all such words are good

but

in the end, if people still rush in droves and keep the delivery periods at 3 months for a Swift (at the moment it is lesser), why should not Suzuki keep the price to whatever level they feel it can sell at!

Suzuki could have easily cut the price of their biggest seller, 800, to 1.5 lakhs when Nano was announced (note that they must have recovered their investment on that platform and plant multi times over) and spoilt the party for Nano but they did not do that.

You will observe from recent past, if you have been following their business policies, that Suzuki has a policy not to undercut to sustain the sales.
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Old 6th February 2010, 10:37   #339
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The diesel LDi and VDi of both Ritz and swift are very closely priced with the swift being 8K higher.

The Petrol LXi and VXi of Swift and Ritz with 1.2L K series engine has a difference of 15K, swift being higher.

The biggest difference is the ZXi of Swift and Ritz, the difference being 36K. The only addition I see in the Swift is the climate control.

So incase of ZXi they are saying swift is premium but for the other variants it's similar.
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Old 6th February 2010, 12:53   #340
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Quote:
Originally Posted by civic-sense View Post
...The Swift is a badly built car, cost cutting being the ONLY reason. A 4.5 year old Swift belonging to my friend is already falling apart....
I beg to differ. Although my swift is just over 2 yrs old, I have put it through 56k km and some pretty rough terrain. There is nothing about the car which suggests a shoddy build. Apart from slight plastic rattles, it still feels pretty much the way it did when it was new.
Can you post a detailed report about your friend's swift? What exactly is 'falling apart' in his car?
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Old 6th February 2010, 12:55   #341
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Default Dont be Naive

It amazes me still, how easily/ readily we Indians give credit to a market leader and how easily we take it away from a market follower.

Had FIAT done something like this, I'm sure this thread would've gone in a different direction.

Truth is, Maruti is more than likely saving money by standardizing the K series across its platforms. Lesser engine models mean lesser variations in the manufacturing process.

Im still quite amazed because this is the first myopic business decision that company has made in recent memory. I guess they don't expect much competition from Nissan and VW's products. Even if they do, I'm sure it won't take alot for them to lower their price by 20 grand which will redirect an entire new flock of sheep to their showrooms, in this hyper price sensitive market.
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Old 6th February 2010, 14:21   #342
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Guys, any updates on the test drives of swift K series Engine?. eagerly waiting for the reviews... if not us, Mods! have you managed to try one drive?
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Old 6th February 2010, 14:36   #343
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Dont want to pull FIAT into this but had FIAT bothered to give a 1.2 litre engine with 80+ HP and 100+ torque, they would have succeeded. FIAT have raised the price of Punto and Linea and no way they are angels.

The market is buying the Swift at the existing price and are ready to wait, so why bother. Think about people who bought the 1.3 litre engine a month earlier and ended up paying higher. They would be unhappy. So better to sell it at the same price.

They are here to make money and they are doing it by giving reliable and V
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Old 6th February 2010, 15:00   #344
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Oops. Not able to edit that post. I meant to say

They are here to make money and they are doing it by giving reliable and VFM products.

P.S. Dont come with an argument questioning VFM, I am not here for a discussion on that. Just my opinion.
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Old 6th February 2010, 15:04   #345
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Quote:
Originally Posted by kashishd View Post
Hi Fellow members,

I too have booked my Swift ZXI K series 2 weeks ago, the Car has arrived in the yard today and I have been promised delivery on or before Wednesday the 10th of February. I have already told the sales person that I am interested in visiting the Yard with my checklist .

If I make it to the yard tomorrow, I will try my best to take pics and answer some of the questions everyone has viz. - Interiors (dashboard), Transmission etc.

Is there anything in particular you guys would like me to check out? And yes, how to determine whether the engine is a K Series one for sure?

Thanks
Congrats
Eagerly waiting for the pics
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