[PrideRed]

Most of the cars have upped the game- Newer powerful engine, Autobox, added features, safety, increased dimensions and what not. In case of Alto, Engine and gearbox is still the same 800cc(May be tweaking has been done), no new features barring few like music systems/power windows in top spec, and safety wise its just airbag, ABS and rear parking sensors. Even size wise, its comparable erstwhile 800 and there is not much changes.

[Emvi]

Originally Posted by veyron_head

They are super clever. There would be hardly anything you pay for a brand new Maruti car in the first two or three services. Your word of mouth about how cheap they are would have spread widely by then. It is now that they start making money on you. Your service costs would go incrementally higher with every service that after few years it would become so expensive.
So they are milking us at the service center rather than the sales center!

You definitely have a point here. I agree certain wear and tear parts like brake pads, wiper blades and even clutch plates might need early replacement comparatively. And as you have mentioned, this is where they make money. Still, a person with low usage wouldn't mind this. Initial buying cost is a big factor especially in the entry level segment. Moreover, service labour cost is still reasonable (read cheap) especially in smaller towns in comparison with the bigger cities.

Originally Posted by PrideRed

Most of the cars have upped the game- Newer powerful engine, Autobox, added features, safety, increased dimensions and what not. In case of Alto, Engine and gearbox is still the same 800cc(May be tweaking has been done), no new features barring few like music systems/power windows in top spec, and safety wise its just airbag, ABS and rear parking sensors. Even size wise, its comparable erstwhile 800 and there is not much changes.

True.
But let's consider this. Alto along with Bolero are probably the oldest nameplates in India right now. Whatever you have mentioned holds true for Bolero as well. But, today Bolero costs twice as much it was when initially launched. Alto's VFM quotient is hard to beat IMO.

[Apex1815]

Maruti Alto:
Alto has actually become cheaper with time (only 11% hike in 21 years ).
The USP of Alto is its Low(est)Price (nor the looks/performance/features etc) and Maruti has managed it very well by keeping the input costs under strict control.

During the initial years (Year 2000 ~ 2002), Alto's monthly sales was around 4~5000 units per month whereas now it is 17~19000 units per month.
With this much increasing sales volume (3 to 4 times) the OEMs can control the variable cost upto a great extent. Additional contributing factors for cost control are the Optimization of the Production operations, Automation, New manufacturing technologies etc. implemented at the OEMs and the supplier level.

Moreover, the margin per unit on such low cost car is very minimal. These cars fetch profits for the OEMs by high sales volume (& off course after sales service).

"Here the key is the Ex-showroom price of Alto which Maruti will not play with"
The cars like Alto are more focussed towards fulfiling only the minimum safety (regulatory) requirements (i.e as per CMVR). Therefore, over a period of 21 years there have not been prominent updates on any other aspect apart from complying CMVR safety requirements and updates in very minimal features.

Toyota Innova:

The Price of this car has increased around 2.5 years in the past 15 years (since its launch). Following are the factors which I think have contributed to the prominent increase:

- It is a niche product in its segment. This has given leverage to Toyota to
command the price.

- If you see the year 2006 model Innova & Today's Innova Crysta you will notice a lot of additional features related to Safety, Comfort, Entertainment and all the bells & whistles which leads to considerable price hike. Toyota will add features and will charge the premium (whereas the car like Alto will not get those type of extravagant features as its price needs to be under strict control to achieve high sales volume).

[KPR]

Why MS isn't increasing Alto price? Answer is the number of cars sold per month! Let's take the example of AC cabin filter which isn't available in Alto 800. The part number and costs are as per image below:



Now the math says:
₹370 x 17000 (average no. of Alto-s sold/month) x 12 (months) = ₹ 7,54,80,000 This figure can be termed as profit or cost cutting per year. Also I feel they're keeping a check on price of car as it is affordable to masses who aspire to buy a car.

P.S: There's no cost cutting in rear reverse lights. Both side lights glow in Alto 800 BS6

[madrasilemon]

They are super clever. There would be hardly anything you pay for a brand new Maruti car in the first two or three services. Your word of mouth about how cheap they are would have spread widely by then. It is now that they start making money on you. Your service costs would go incrementally higher with every service that after few years it would become so expensive.

So they are milking us at the service center rather than the sales center![/quote]

Your observation is very correct. I still remember my Alto days when one had to fight with the SA to remove unwanted works to be removed from the initial estimate. Once I had an opportunity to bring down the estimate from 13k to 7k. I often feel my current vehicle, Bolero, is cheaper to maintain and easier to deal the SA.

[JagMan]

It's not just r&d costs and things. The cost of plant and machinery have been depreciated fully. Even the m800 was a cash cow when alto was launched. Fully depreciated cost base and selling for lakhs.

While others have mentioned service costs adding to the bottom line and the higher volumes. Over such a long duration value enginnering also must have reduced costs.THe ribbed roof of the alto 800 for example allowed them to use thinner sheet metal to get the same rigidity as a thicker straight sheet metal.

A penny saved is a penny earned indeed.

[Chai]

Not just Alto, bought Wagon R VXi for about 4 lakhs in 2005 and costs the same even today variant to variant. Maruti is master in cost and operations management and hence has managed to maintain its market share for so long by knowing what its market needs are and at what price. Rarely got the pricing horribly wrong.

[stallmaster]

Originally Posted by KPR

Let's take the example of AC cabin filter which isn't available in Alto 800.

Dealers remove cabin filters to charge for the same later on. If your car is equipped with AC and does NOT come with a cabin filter, ask for one. If the dealer refuses, ask them to give it in writing and escalate. Always check during PDI. Dealers can be BIG-TIME crooks with such little things.

They also do this for another reason: You are oblivious of this scam and use your AC minus cabin filter. Your blower fan and evaporator will get choked in a while in our dusty climate. They can then charge you to service/repair/replace the same.

[KPR]

Originally Posted by stallmaster

Dealers remove cabin filters to charge for the same later on. If your car is equipped with AC and does NOT come with a cabin filter, ask for one. If the dealer refuses, ask them to give it in writing and escalate. Always check during PDI. Dealers can be BIG-TIME crooks with such little things.

Nope. The car from factory itself doesn't come with cabin filter. Details are in the below mentioned thread where many tbhp Alto owners have put the filter as DIY. I'm not sure if dealers are installing it during service.

https://www.team-bhp.com/forum/offic...ml#post4907232 (Maruti Alto 800 : Official Review)

[stallmaster]

Originally Posted by KPR

Nope. The car from factory itself doesn't come with cabin filter.

Even if that's the case, it's probably the dealer's duty to get it fitted before delivery and they conveniently 'forget' that.

All the filters in your car are included in the price that you pay because the AC system is designed to work with them. It's not something aftermarket like a fancy horn or auxiliary lights and without it, your AC WILL malfunction in the long run. Definitely not something that engineers designed to be optional.

[kjayant]

Very interesting conversations.

Most FMCD companies and extensively line extended automobile companies plan their line up with 3 basic segments from the product axis:

1. Popular or Opening Price Point Products (OPPs)- They contribute to units mostly. This segment has thin or no margins at all. They keep unit share up.

2. Premium/Mass premium - They have some margins but ASP per unit is much higher than OPP. Hence this segment contributes to toplines or revenues. They keep revenue share up.

3. Exclusive or Luxury Segment - They have very high margins and only contribute to the bottom line. Despite selling much lower units, this segment has much higher ASAP - 2X to 3X of Premium and extremely high gross margins.

Alto is OPP to Maurti.

Even from the classic product lifecycle management curve i.e. Introduction, growth, maturity, and decline; Alto definitely has no novelty left and somewhere straddling between maturity and decline phases. In such cases, aggressive pricing and promotions are the most often used strategies.

[landcruiser123]

The price of anything is what people will pay for it. Sometimes, companies have to even sell at a small loss. The Reynolds pens (most basic) were INR 10/- for over 10 years whereas ADD (a competitor) steadily increased prices over the years.

The Maruti Alto has not seen any great technological evolution (minimum R & D), the factories have become automated, and the part localization has greatly improved. So, no surprise that the car is cheap even today.

[Simhi]

In my opinion, Maruti is selling Alto at no profit. They are also benefiting from fully depreciated assets. But why are they doing this?


1. To keep competitors at bay - Nano was a threat but is nowhere in picture now. How long will Renault be able to sell Kwid at the current prices?

2. To retain market share and keep shareholders happy - This is purely number games here. A dip in market share can send negative signals. Alto contributes approximately 11% in monthly sales. Maruti will think of hike in prices or stop production only if monthly sales goes below 5%.

[ScorpioYadav]

Originally Posted by Emvi

Let's not forget, today even the base model is equipped with driver side airbag, ABS and reverse parking sensors. And yes, for once let's not get into the discussion/arguement regarding how safe/unsafe the car is. Over the period, Alto has undergone minor and major facelifts, changes to the platforms/body panels, feature additions and a lot more.

You forgot to mention the multiple engine improvements to meet the emission norms, from Euro1 to BS6.

[AZT]

As a country we need cars like the Alto. Owning a car is still a matter of pride and it's great that the common man can experience that.