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Source: Vendors: Maruti Planning Cheaper Alto - WSJ.com

"Executives at two auto-parts companies said Maruti Suzuki India Ltd. has asked them to cut the price of parts for its Alto small car by at least 15% as the auto maker wants to launch an under-200,000 rupees ($4,288) version of the model.A cheaper version of the largest-selling car in India will help the Suzuki Motor Corp. unit expand its presence in the entry-level market and counter competition from Tata Motors Ltd.'s Nano, the cheapest car in the world that costs 123,361 rupees for the base model at dealerships in New Delhi.
Maruti's entry-level car, the M800, costs 192,936 rupees for the non-air conditioned version, but the company can't anymore sell it in 13 major cities, which adopted strict emission rules that the model doesn't meet. The base model of Alto currently sells for 229,055 rupees.
One of the two executives who spoke to Dow Jones Newswires said Maruti has informed his company that it may introduce the new version within two months. "We have been working on reducing the cost of auto parts for Alto for some time now," he added.
Both executives spoke on condition of anonymity.
A Maruti spokesman, who also declined to be named, said "as a policy, we don't comment on future models and variants."
Local sales of entry-level cars in India more than doubled to 32,365 units during April-July. The M800 trails the Nano by a fair margin, with sales of 8,586 units during the period compared with 23,779 Nanos.
Maruti on Aug. 4 introduced a version of Alto with a 998-cubic-centimeter gasoline engine, in addition to the original model with a 796cc engine.
The executives said Maruti plans to sell 325,000 units of the three Alto variants, including the proposed version, in the current financial year through March. It currently sells an average 20,000 Altos a month.
The company that makes nearly one in every two cars in India sold 384,181 vehicles during April-July, up 26% from a year earlier. Sales in the last financial year rose 29% to a record 1.02 million.
Meanwhile, the executives said Maruti has asked them to supply parts for up to 1.3 million cars in the current financial year.
Auto makers in India are launching new models and expanding capacities to meet rising demand for cars and utility vehicles in the fastest-growing-major economy after China.
"The company plans to increase its production in September and October to nearly 5,000 vehicles a day to stock up for the upcoming festival season," one of the executives said.
Demand for new vehicles usually rises during October-November due to several Hindu festivals, considered auspicious to purchase assets.
Maruti currently produces 4,000 cars and sport-utility vehicles each day at its two factories at Manesar and Gurgaon in the northern state of Haryana. The factories operate about 25 days a month.
The two factories have an installed annual capacity of 1.0 million vehicles, which is being raised to 1.25 million by early 2012 by increasing capacity at the Manesar facility.
Maruti had previously said it was also working toward operational efficiencies to produce more cars than its installed capacity."

BTW which SUV maruti produce at Manesar and Gurgaon plant.
As per my knowledge the only SUV Vitara ....Its the import one.

or really maruti produce vitara at those above mentioned plant??

Can any one confirm???

Did you forget India's first true SUV?!.. Maruti Gypsy.

Is there really any way left for Maruti to further reduce the cost of Alto. What if any automobile firm plans to position a car in 5 digits (under Rs.100000). Will Maruti go ahead and position their existing line up after some cost cutting there too. I think they should do such experiments with the 800 or else they will screw up the image of the Alto.

I would suspect Maruti is reworking the Alto and cutting costs to meet Rs 2 lacs target price. The Nano covers Rs 1 lac to 2 lac bracket. Consumers of the high end Nano could have a compelling option in a lower priced Alto Lx (i?)

To cut costs they can simply throw away the Roof, replace it with a soft top. that will save them quiet a lot. lol:

Well, I think they can/might do the following:

1. Can use all four drum brakes.
2. Remove the booster(if possible)
3. Fix the front passenger seat
4. Make the already thin door panels 'Wafer Thin'
5. Remove front door pockets
6. Remove both outside rear view mirrors
7. Remove the headlamp levelling device
8. Remove the high mount stop lamp
9. Remove i-CATS security system

I have compared this with features of Std. Alto, as given on official website.
Thats all I can think of right now.

Headlamp leveling device and right ORVM is mandatory by law.
Cannot take them away my friend :)

@blackasta, Well, I didn't exactly know about the Head Light Leveling Device.
Thanks for correcting me. stupid:

But still, I think they can still cut corners and get the price down.

OT: Today, I went to MASS to replace Swift Dzire's Front LHS Strut and the service advisor told me that a diesel variant is going to come in about three- four months time. But he did not specify in which car it will be coming. I think Maruti is gearing up for the Chevy Beat diesel.