Companies

Maruti's new Swift sedan variant likely to debut in Feb

Roudra Bhattacharya New Delhi | Updated on November 13, 2017

Maruti Swift models at the Manesar plant. — Shanker Chakravarty   -  Business Line

Auto major seeks to work around Govt's excise duty structure with sub-4 metre offering

Maruti Suzuki's popular brand, Swift, may soon be expanded to three body styles from two, as the company looks to maximise returns from an existing platform by working around the Government's excise duty structure.

With a February launch expected, the sub-four metre sedan version of the car — tentatively called the ‘Swift 3.99', will be the cheapest sedan from the Maruti stable. Swift 3.99 may be sold alongside the existing variant (longer Dzire Sedan). To be offered at a price lower by at least Rs 50,000 than Dzire's, it will plug the gap with the new Swift hatch positioned below.

The thinking is that all three body types will exist together, a person close to the development told Business Line. The launch of the sub-four metre Swift sedan is expected around February. “Trial production has already been done,” he said.

“The Dzire sales are still strong enough to not pull it out of the market. Adding a third body style in the Swift range will mean incremental volumes without much higher investments, especially when auto sales are slowing and companies are looking to delay capacity expansion,” an industry expert added.

Output expansion

Swift 3.99 launch is timed with the production expansion at Maruti's second manufacturing facility at Manesar, which until months back was in the midst of labour trouble. By January, daily production at the second new assembly line at Manesar is being increased to 900 units, from the current 200, taking the total capacity to around 2,100 units a day.

Many carmakers have developed new body variants to take advantage of the dual excise duty slabs for passenger vehicles announced in the 2008-09 Budget. To promote small cars, this structure imposes a lower 10 per cent excise duty on cars less than four metres in length and with engines of below 1.2 litre (petrol) and 1.5 litre (diesel) capacities. Cars above this specification attract 22 per cent excise duty.

Tata Motors has followed a similar strategy with its Indica/Indigo range in which it has several body styles borne out of a single platform, such as the Indica hatch, Indigo sedan, Indigo CS (sub four metre sedan) and Indigo XL longer sedan. Mahindra & Mahindra is also reportedly working on a three model plan with the Verito sedan (earlier Logan).

“You have different customers in every segment, so more products would mean more customers. Companies are optimising their portfolio by trying to take advantage of the excise rules – sub four metre versions result in 4-5 per cent cost savings,” Mr Abdul Majeed, partner and leader of the automotive practice for PwC India, said.

The Swift hatchback and Dzire are among the most popular models for Maruti — with the diesel option accounting for over 80 per cent of the demand. In November, Dzire accounted for about 13 per cent (10,403 units) of Maruti's sales, while around a lakh customers are still waiting for delivery of the new Swift hatch.

>roudra.b@thehindu.co.in

Published on December 11, 2011

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