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Maruti to drop deisel Gypsy, launch diesel Esteem; new engines for all models from April 2000

Maruti Udyog Limited has buried plans to introduce a diesel version of its multi-utility vehicle -- the Gypsy -- terming it ''unviable''.

However, the country's largest car-maker is still toying with the idea of sporting a diesel heart on its mid-size offering the Esteem, company sources said here.

The decision to this effect was primarily influenced by the cold response received by Maruti's only diesel offering on the Indian roads -- the Zen-D.

''Besides, the cost add-ons for rolling out a diesel vehicle are too high and the whole process is not economical and viable,'' the sources added.

The company is presently importing the diesel engines from Peugeot Citreon Motors of France. ''The landed cost of these engines is in the range of Rs 100,000 a unit. This has to be passed on to the customers. The final price tag of the vehicle, particularly Gypsy, in such an event is too high to give us volumes. So, we have decided to drop the whole idea of introducing a diesel Gypsy,'' the sources added.

''Absorbing the cost of the engine, even partially, does not make good business sense as it would then eat into the petrol version's market.''

The Gypsy is presently priced in the range of Rs 291,000 to Rs 372,000 (ex-showroom) while the Esteem is priced between Rs 466,000 to Rs 590,00.

Regarding the Esteem, the sources said, ''Despite being a luxury segment product, the car is priced much below other players in the market. So putting a diesel heart and adding Rs 100,000 to the tag would still make the product look attractive. So, we are still considering this option.''

However, a firm date for the launch of the product is yet to be fixed. ''We are still watching the market and a final decision on the matter would be taken later.''

The company had earlier decided to go slow on the dieselisation front in the wake of embarrasingly low sales figures for the Zen-D. Meanwhile, faced with poor sales volume, Maruti dealers are offering a Rs 60,000 rebate on the Zen-D as a desperate attempt to clear stocks.

The company is, in fact, now concentrating on its existing line-up and working towards strengthening them to meet the onslaught from new entrants in the small car business.

MUL is also all set to have a heart transplant done on all its models post April 2000 and fit them with direct fuel injection systems.

The sources pointed out that the automobile giant is spending close to Rs 3 billion for the purpose. Denso India would be supplying the fuel injection systems. It has already set up a wholly owned subsidiary -- Denso Haryana Private Limited -- for producing the engine management systems.

Besides, Maruti is working towards fitting compressed natural gas kits on all its petrol-driven vehicles, including the Maruti 800. The company has already drawn up plans to promote CNG vehicles in Delhi in the current fiscal.

''The kits, provided by Transenergy India Limited, can be fitted on any of our petrol-driven vehicles. We are open to fitting it on any car as per demand,'' the sources said.

Fitting of the CNG kit involves an additional outlay of about Rs 33,500. ''The kits are available with our dealers and will be fitted on demand.''

The fitting of the approved CNG kit will not affect the one-year warranty offered by MUL. The CNG is a viable alternative fuel since it offers lower emissions and has an extremely low running cost with an average fuel consumption of 19.6 km/kg and cost of Rs 11.30 per kg.

With a running cost of Rs. 0.65 per km compared with Rs 1.78 for petrol, the saving of Rs 1.13 per km means that the CNG kit will pay for itself after only about 29,000 kilometres of running.

UNI

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