Best Economical Car - Goodbye Maruti 800

Maruti Suzuki says goodbye to Maruti 800 after Nano's launch. What would be the possible reasons for that and what do you think will be the effect of that? Do you agree that it is production life cycle and every production definitely comes to its end stage?

I have heard in the news that Maruti is saying goodbye to 800, the first most economical Indian car and I agree to this as it makes sense for Maruti to phase out a product as old as 800 and replace it with another product from its own stables (such as Alto and A-Star) before it loses ground with consumers. Every Brand needs to offer something new to its consumers over the years, especially in a segment as competitive as small cars, as the replacement of the 800 with Alto is a well thought out decision by Maruti.

But what about the market share? Maruti gets maximum sales from 800 only. Also Maruti has been redefined 3 times and when the high time came for re-modification, it is going to get a farewell.

I know Tata Nano is a tough competition and Maruti does not have any answer to that but how about an idea that Maruti being introduced with 600 cc engine and similar features with associated trust and belief added to it. May be that can be a better solution to compete with Nano and also Maruti 800 is the highest in demand car still in spite of the stagnant growth.

Also, Maruti Alto with 800 cc is pretty much Maruti 800, but with a newer design and a vastly different image. Maruti 800 has an "image problem" that does not make it appeal to the young car buyer; it is synonymous with the first car bought by the conservative family man who does not have much money to spend. Buying a first car today is all about enhancing one's social image and is a status symbol. Alto has replaced the 800 because it does not carry the burden of its image and is pretty much in the same price bracket.

I know that Maruti 800 is a not only a car, but it is a brand which holds considerable market share. Tata Nano is a new segment, which definitely caters attraction from low﷓end consumers.

Tata Nano and Maruti 800

Tata Nano and maruti 800 both are for different segments. Maruti will never be able to produce a car of 1 lakh cost because Tata's have cost advantage, which is their core competency because they have their own steel plant and it has joined customers and vendors together.

Tata Nano is basically a product to make people shift from two-wheelers or three-wheelers towards cars or in fact for those people who only own two-wheelers and want to purchase cars, which they can easily afford just like Tata Nano. Tata Nano has come up to cater middle class and even lower middle class.

A few days back, I visited Maruti Suzuki Plants at Gurgaon and Manesar and I had a chat with the HR manager of Maruti. He said that Maruti is concerned about the issue of Nano and is recently planning to launch improved version of 800, but they are not planning to cut the price and instead they are planning to add some additional features.

If we talk about Nano, the mere idea of developing Nano or a low cost car crept in Mr. Ratan Tata's mind was when he saw a family (four members) sitting on a two-wheeler. The first model of Nano is the basic model, i.e., rupees 1 lakh, which we can say, is a move to upgrade people using two-wheelers, but the other models of Nano, i.e., the Deluxe Version which is still awaited in the market would be catering to a totally different segment in terms of price (Rupees 1.75 lakhs approximately) and comfort. This particular version, which will most probably be launched next year or so and could eat up the market share of Maruti 800.

Now if the news are true that Maruti will phase out 800 now and will take time to launch a new car of same segment. In that case, they will lose out big market share and they need to see the opportunity cost as well.