Maruti Suzuki India, which has launched its all-new Alto 800, is to kick off exports of the car from January 2013. The countries targeted are Chile as well as other South American geographies besides Africa and neighbouring Asian countries. So far, Alto exports constitute 10 percent, or 200,000 units, of Maruti’s total sales of over two million units in the past eight years. The Alto was first launched on September 27, 2000. According to Maruti officials, the new Alto is likely to notch similar export numbers.
Maruti has rolled out the petrol and CNG variants of the new Alto 800 in three trim levels – Std, LX and LXi – with an introductory pricing of Rs 2.44-Rs 2.99 lakh for the petrol edition and between Rs 3.19-Rs 3.56 lakh (ex-showroom Delhi) for the CNG model.
Given the very good response to the new Alto 800, which has notched over 30,000 bookings within a fortnight of its launch, Maruti is off to a good start. Even the pre-launch numbers were good. Shinzo Nakanishi, managing director and CEO, said that from end-September, when Maruti had opened bookings, the car had received over 10,000 bookings even before the pricing was announced. “About 200 engineers have worked on the development of the new Alto 800, over four years, which has involved an investment of Rs 470 crore,” he revealed.
At a claimed 22.74 kilometres per litre, the new car’s fuel efficiency is up by 15 percent due to focused engineering. Maruti says an increased compression ratio and improved volumetric efficiency have helped increase fuel economy, which was further augmented through significant improvements in the engine intake system. According to the carmaker, the use of a new-generation engine and transmission lubricants will help reduce frictional losses and enhance performance.
In the CNG version (branded Green), Maruti’s patented intelligent Gas Port Injection (i-GPI) technology, which comes as a factory fitment, helps deliver fuel efficiency of 30.46km/kg, an improvement of over 13 percent compared to the outgoing Alto Green. Last year the Alto Green accounted for sales of 2,000 units a month but this year the number has doubled to 4,000 units every month in the three CNG markets of Mumbai, Delhi-NCR and Gujarat.
The new Alto 800, which will be available in six colours, is based on the existing Alto platform and is powered by the same 796cc three-cylinder engine (F8D) from the Alto. However, the motor has been modified to meet the latest emission norms. Inside the car, headroom and legroom have been enhanced, legroom increasing by over 15mm.
High localisation level
The Alto 800 has a localisation content of 95 percent with 200 suppliers, including Krishna Maruti, Denso, Rico Auto, Asahi Glass and SKH Metals, providing components for it. Some of the parts suppliers for the Alto CNG kits are Kehin, Emer and Jay Fe. Maruti has designed the CNG kits and assembles them at its facility. The Gurgaon plant, from where the Alto 800 rolls out, has a manufacturing capacity of 25,000-30,000 units a month. This plant, which also produces the Wagon R, Estilo, Omni, Versa, Gypsy, Ritz, Eeco, Ertiga, Alto K10 and the Maruti 800, has a total production capacity of 900,000 units annually, in two shifts in three assembly facilities.
According to Mayank Pareek, managing executive officer (sales and marketing), the Alto sold 300,000 units last year, averaging sales of 25,000 units per month. Maruti statistics reveal that in its three CNG markets, about 25 to 28 percent of the Altos sold are CNG cars over the last four years since the CNG model launch. The Alto is being marketed across 1,100 outlets with deliveries having commenced immediately after its launch.
“The Alto 800 will significantly impact the entry level segment where there was only a single product. The CNG option will be very attractive for buyers. I would expect this product to draw first-time buyers from the used car market into new car buying. The new model also has the potential to draw two-wheeler customers. As consumers expect the price of diesel to further increase in the future, one will not want to overlook the possibility that the petrol version itself may be quite attractive for this segment,” says Kumar Kandaswami, senior director, Deloitte India.
Abdul Majeed, Head – Automotive Practice, Pricewaterhouse Coopers India, is optimistic that the new Alto 800 will help Maruti regain its market share that fell to about 37 percent due to the loss in production of the Dzire and Swift consequent to the labour unrest at Manesar where these two models are made.
R C Bhargava, chairman of Maruti Suzuki, has already spoken of Maruti targeting a 40 percent share in this fiscal. Majeed says there is strong demand in the entry segment, where the Alto is placed, for both two- and four-wheelers. At present, the Hyundai Eon is the main competitor to the Alto 800 but later other OEMs like Nissan and Ford are expected to also position new products here, adding to the fierce competition. Once Maruti is able to raise numbers of the new Alto 800 to around 40,000 units per month, it will gain a lot of traction and help increase the scope for reinventing itself to reach a larger number of buyers. Market share, feels Majeed, keeps vacillating up and down and to sustain shares, companies have to launch multiple products to stay in business.
Meanwhile, the backlog for Maruti’s popular models like the Dzire is 56,000 units and 52,000 for the Swift, according to Pareek. The pending orders for the Ertiga MUV are 26,000 units with the waiting period spilling over between two and six months. At present, the Ertiga is averaging sales of 6,500 units every month since its launch in April.
With the current fiscal a tough year for OEMs with growing inventories, the festive season is expected to bring in some cheer though a dampener has been the raising of vehicle prices by auto majors. An analyst attributes it to existing inventories due to demand uncertainties and a poor monsoon that led to a sluggish market. This has prompted OEMS to stave off losses by hiking car prices. Next year however, the market is expected to stabilise with forecasts for the medium and long term, indicating heightened automotive demand.
A similar opinion was held by Subrata Ray, senior vice-president of rating agency ICRA, who feels that the micro, mini and compact segment sales were down in the last six months where Maruti is a key player. Moreover, production issues at the carmaker’s end had also been an irritant in amassing volumes but the launch of the new Alto 800 will help lift some of the sales despondency in the carmaker’s camp. This would boost sales as new product launches tend to generate interest among buyers. Also, with the labour issues resolved at Maruti’s Manesar facility and production on stream, volume growth is expected to kick off.
Further, ICRA, which had placed 14 auto component suppliers of Maruti Suzuki on a rating watch when the carmaker was experiencing a lockout, has removed the watch on seven companies: Subros, Lumax Industries, Kalyani Thermals, Machino Polymers, Somic ZF, SKH Metals and Global Autotech. These companies have undergone rating revision in some long-term or in short-term cases, or in both. This means that it will be relatively riskier from the credit perspective to lend to some of these companies compared to their position prior to being placed on rating watch. For the remaining companies, a final decision will be taken within a week.
Manesar update
Meanwhile, at its Manesar facility, Maruti has started producing 1,350 cars every day and expects to cross production of 1,950 units daily by mid-November, over and above the earlier production schedule of 1,700-1,800 units per day.
The current manpower strength at the plant has also been ramped up to 3,820 employees of which 750 are temporary workers deployed on non-production activities.
About 200 regular employees are expected to join the rolls by end-October, said S Y Siddiqui, chief operating officer – administration and HR.
On the other hand, the SIT report on the Manesar labour riots is believed to have been completed and has charge-sheeted around 150 workers out of the 500 that Maruti had suspended, attributing the unrest to internal reasons. However, Nakanishi said that the carmaker is yet to receive the report and will study the same before reacting on it.
So in the long term, Maruti Suzuki seems well set on the road to recovery and the next year should see it rolling out more products in the compact hatchback segment to pep up sales.
INTERVIEW WITH I V RAO, EXECUTIVE ADVISOR (ENGINEERING), MARUTI SUZUKI
Why did it take four years to develop the new Alto 800?
This is the time which is taken right from the concept stage to actual production. This is normal development time for the kind of development which was done on this model. The main areas of development were body, engines and electrical architecture keeping the base platform the same. Even in chassis systems, design improvements were done to improve ride and handling.
What are the key engineering improvements in the car?
The Alto 800 is a new model. While it shares the basic platform with the outgoing model, the commonality ends there.
The engine is a next generation of the earlier engine and has been modified in key areas to improve the drive feeling and also improve the fuel efficiency by a phenomenal 15 percent and engine torque by 11 percent. It uses a next-generation engine control system specially designed and optimised for this application. The body shape, headlamps and interiors have been re-engineered for lighter construction, more interior space and better aesthetics.
Where was the design done and who all were involved?
The complete designing was done in India. The target was to offer a new model with improved exterior and interior aesthetics and improvement in all performance parameters which are important for this segment of customers .
Maruti and Suzuki Japan engineers work together as a team on development of all new models. Most of the designing for the new Alto 800 was done in India by our engineers. About 200 engineers were involved in this project at different stages of development.
We used Suzuki facilities in Japan wherever required. There are Japanese experts in most of the areas, who have helped us in the development of the model.
Was customer feedback taken before developing the new Alto model?
Before the development of a new model as well as for getting the VOC, merits and concerns on the existing model, customers are contacted. This is part of MSIL process during any development process.
What were the engine upgrades undertaken to ensure higher fuel economy?
The main changes in the engine can be classified into lightweighting and performance upgrades.For lightweighting, a plastic intake manifold and weight reduction of crankshaft was done. The plastic intake manifold also reduces suction losses and improves volumetric efficiency, enhancing the performance.
For performance upgradation, redesign has been carried out in various areas for friction reduction and stepping up of thermal efficiencies. High compression ratios with knock sensor addition, engine friction reduction by oil upgrade and bearing changes, new intake manifold geometry for better low-end torque and complete calibration change and logic changes for fuel efficiency and performance improvements have been undertaken.
How will the Alto 800 be better than existing models in the entry segment in terms of engineering capability and mileage?
The Alto 800 will be better than its competitors with respect to overall drive feel with better acceleration. It also gives best-in-class fuel efficiency.
Does the Alto CNG have any additional modifications?
With the changes in the engine hardware, the base engine for the Alto 800 CNG has also been modified. With these changes and a new set of calibration, the Alto CNG also delivers higher torque of 7 percent and better fuel efficiency (13 percent) than the outgoing Alto. The CO2 emissions from the Alto 800 CNG will be among the lowest for passenger cars, at around 89g/km.
Are there any other engineering improvements undertaken for the export market Alto 800?
The Alto 800 has been designed with both RHD and LHD versions. The export LHD version will meet the US Tier II BIN5 emission norms applicable in South American countries like Chile.
What happens to the existing Alto?
MSIL has two variants in the Alto. The Alto with the 800cc engine is now replaced with the new Alto 800 and Alto K10. The 1.0-litre engine will continue for more performance-oriented entry level customers.
SHOBHA MATHUR