When the Tata Nano was unveiled at the Delhi Auto Expo four years ago, reports began doing the rounds that Maruti Suzuki was planning to throw down the gauntlet with a stripped-down Alto.
Nothing of the kind happened. The Nano promised plenty but has not delivered on its potential for a host of reasons. The Alto continues to be the largest-selling car with over 15,000 units a month but has been losing ground steadily to premium hatchbacks like the Swift (also from the Maruti stable), Toyota Etios and Ford Figo. It is against this background that Maruti will launch the new Alto 800 on Tuesday. Expected to be priced around Rs 2.5 lakh, the car will strive to prove its potential as the best alternative in the entry-level segment.
Diesel preference
Rivals are not unduly bothered though. “Customers are rapidly gravitating towards B plus models such as the Etios, Swift and (Volkswagen) Polo which have more features to offer,” the marketing executive of a Delhi-based carmaker said.
These ‘B plus’ cars are priced nearly twice as much as the Alto but offer diesel versions. Petrol still costs at least Rs 20/litre more and that differential is sizable enough for customers to opt for diesel.
Will the new Alto still succeed in this rapidly changing landscape? Clearly, the first-time car buyer is getting more fastidious in his choice of a model and is also willing to pay more. Mileage, of course, continues to be priority but features precede price in the wish list. The latest, though unexpected, twist in the tale has been the rush for diesel.
This perhaps explains why Hyundai’s Eon, which starts off under Rs 3-lakh, has not made the kind of impact that it was expected to. Observers believe its entry coincided with the tilt towards diesel. As a result, premium hatchback options have become the flavour of the market, even though they are more expensive.
‘Strategy spin’
The new Alto 800 promises plenty in the mileage department but it will be interesting to see if the absence of a diesel version proves to be a setback. The brand is still a big draw but today’s young buyer is keen on getting his hands on the huge array of other choices available. The response to the Alto will also tell rival manufacturers which way the market is heading.
For instance, the Nano convinced Carlos Ghosn, the CEO of Renault-Nissan, to work on something similar, like the ultra-low cost car with Bajaj Auto. He has, since, changed his script with the Datsun, which will be Nissan’s affordable alternative in emerging markets like India. The Alto 800 could spawn yet another ‘strategy spin’ in the entry-level segment.