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India's Maruti halts mini car production

New Delhi, February 9, 2014

India's Maruti Suzuki said it had halted production of its iconic first small car, the Maruti 800, which revolutionised road transport for millions of Indians.

The boxy, four-seater hatchback - the first car ever owned by many Indian middle class families - first rolled off the production line in 1983 and 2.9 million have been sold since, the company said.

"We have stopped the M-800 (Maruti 800) production," Maruti Suzuki executive director C V Raman said at India's premier car show in the New Delhi suburb of Greater Noida.

The decision to phase out the Maruti 800, hailed as a triumph of small-car engineering when launched, was taken in 2010.

The company said it would be too costly to make the hatchback meet stricter emission standards aimed at cutting pollution on congested roads. The no-frills car also had been eclipsed by fancier models.

"It was the car which drove the motorisation of India," Maruti deputy general manager Puneet Dhawan said.

"But people wanted a more modern car and sales were slowing," he added.

Although the car is driving into history, spare parts for the Maruti 800 will be available for eight to 10 years, Dhawan said.

The vehicle, costing 50,000 rupees ($803) when launched by then prime minister Indira Gandhi who called it a "car for ordinary people", is now 235,000 rupees, a company website says.

In 1981, when Maruti Udyog was formed as a state-run company, Indian drivers had just two options if they wanted to buy locally made cars - and often a five-year wait to get the keys.

Premier Automobiles produced cars with help from Italy's Fiat, while Hindustan Motors made the hulking Ambassador. Both were private companies.

Then, Gandhi gave Japan's Suzuki the green light to take a stake in Maruti Udyog - an unprecedented move at a time when India's economy was largely closed.

She said Suzuki's innovative technology would help "redefine" rudimentary manufacturing processes. Suzuki's stake in Maruti, which now produces a range of vehicles from hatchbacks to sedans, has since grown from 26 per cent to 56 per cent.

Since the Maruti 800's launch, India's car revolution has gained pace, with total sales of nearly 2 million units annually.

India will become the world's third-largest car market by 2020, selling 5 million units every year, according to industry forecasts.

Liberalisation policies since the early 1990s spawned an increasingly affluent middle class who have become targets of foreign car firms which have driven into India to propel global sales.

But Maruti maintains its market dominance, accounting for nearly one out of two new cars sold.

Last week, Maruti unveiled at the car fair a low-cost automatic gear shift hatchback, Celerio, in a "market first" it hopes will open a new segment in India where less than 5 per cent of cars are automatics.-Reuters




Tags: India | production | Maruti Suzuki |

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