Facelift And New 1.2-litre Petrol Engine For The Maruti Swift

Suzuki has announced a facelifted Swift hatchback range in Japan. The OEM sells only the five-door model in the home market but revised three-door versions are also expected later this year in Europe, debuting most likely at the Frankfurt IAA on 11 September.

The changes for the Japanese market Swift include a new grille, foglamps, bumpers front and rear and, with the exception of the base version, indicators in the exterior mirrors.

Suzuki has also announced a new 1,242cc I4 gasoline engine for the revised line-up. The existing 1.3- and 1.6-litre gasoline engines are unchanged and the car continues to be built at the OEM's Kosai plant.

The revisions are the first seen on the Swift range since it went on sale in Japan in November 2004. The car itself was a spin-off from the S-2 concept which premiered at the Frankfurt show in September 2003, with the production model following at the Paris show a year later.

In Europe, three- and five-door hatchbacks went on sale with 1.3- and 1.5-litre gasoline engines and a 1,248cc turbodiesel (marketed as a 1.3-litre) in March 2005. All versions are built at the OEM's Esztergom plant in Hungary.

Build in China (a JV with Chang'an) and assembly in Indonesia also started in March 2005. In India, meanwhile, production of the five-door Swift started at Maruti's Gurgaon plant near Delhi the same month. The 1,248cc (marketed as a 1.2-litre) turbodiesel engine joined the 1.3-litre gasoline unit in January 2007.

Maruti Can Continue On The Right Lane?

Although rising interest rates threaten to push passenger cars to the middle lane, Maruti Udyog is geared to continue on the fast track with its new car models.

After Maruti Udyog did magic with the Swift, expectations are running high on its newly launched sedan SX4. Launched two years ago, the bold and beautiful premium hatch-back changed the perception of Maruti from being a manufacturer of staid looking last generation cars to one that is capable of producing contemporary cars with x-appeal. Coming eight years after it launched its last sedan offering Baleno, Maruti is hoping to take on competition in the A3 (sedan) segment with its SX4.

Even though Maruti has traditionally dominated the small car market, the company has been unable to conquer the sedan segment so far. Last fiscal, Maruti sold nearly 29,700 three-box cars, less than Honda, Ford and Tata Motors, with just two models Esteem and Baleno, both of which are showing declining sales.

While the company has a stranglehold over nearly 55 per cent of the passenger car market, it has a market share of less that 15 per cent in the A3 segment at a time when car-makers such as Hyundai, Ford, GM, Honda and new entrants like Mahindra-Renault combine are launching new models or expanding their presence in the segment. Fiat and Tata Motors too will launch their new models in 2008.

Certainly, the SX4 has the potential to do well. Built on the Swift platform with an all new engine, the car is priced competitively against the Honda City which is the leader in the segment at present. In spite of a powerful engine, a fully-loaded SX4 with safety features such as ABS and airbags is priced on a par with the base model of the City. If at all, growth may be constrained by Maruti’s capacity to produce enough cars.

Maruti has plans to expand capacity by another 2,00,000 but this will not come on stream this year. Currently, its Gurgaon plant which has an installed capacity of 3,50,000 units per annum is running at nearly double its capacity.

Its Manesar plant, which produces the Swift and SX4, has an installed capacity of 1,00,000 units. Since the company is already selling around 7000 units of Swift per month (84,000 per year) in the Manesar plant, there is little scope for SX4. The capacity at Manesar plant is expected to be scaled up to 3,00,000 units only by 2010.

“We have to live with it till the new capacity comes. But if Dr Reddy has his way the demand may get softened and match supply, and my marketing people would be very happy,” said Jagdish Khattar, managing director, Maruti Udyog in an analysts’ conference call organised after the company announced its annual results for 2006-07.

World's Automakers Jostle For A Place On India's Crowded Roads

Acacophony of horns, revving engines and squealing brakes fills Jagdish Khattar's 11th-floor office in Connaught Place, New Delhi's central business district.

The company Khattar runs, Maruti Udyog, makes half of the cars jostling on Indian roads and every automaker on the planet is fighting to add its vehicles to his traffic jam.

This year, India's 1.1 billion people will snap up vans, small trucks and cars - especially pint-sized models - more quickly than anyone except the Chinese, according to Global Insight. From 2006 through 2011, India will be the fastest-growing auto manufacturer among the world's top 20 carmaking countries, the accounting firm PricewaterhouseCoopers says.

Global Insight predicts that Chinese sales of light vehicles - cars, trucks and vans that weigh less than six tons - will soar by 50.6 percent to 12 million by 2012.

India's 216 million-member middle class is rushing to make up for decades of automotive deprivation. In 1991, P.V. Narasimha Rao began dismantling state controls that had shut out foreign companies and left India with only Maruti and two other homegrown automakers, Hindustan Motors and Premier Automobiles.

Rao, who was prime minister from 1991 to 1996, kept duties on auto imports as high as 100 percent and encouraged foreign carmakers to set up local assembly and manufacturing plants. Auto companies began to trickle in, led by Daewoo Motor of South Korea in 1995. Customers followed, buoyed by bank loans and rising salaries.

In the year that ended on March 31, Indian passenger car sales climbed 21 percent to 1.38 million. By 2015, they are expected to almost triple to three million, according to the Society of Indian Automobile Manufacturers.

Khattar, a former civil servant who ran a government-owned cement company and sold Indian teas in London from 1979 to 1983, says that Maruti has advantages in luring new car buyers.

GM, Honda and others assemble cars in India, importing most of the parts. Maruti, which is 54 percent owned by Japan's Suzuki Motor, builds cars from scratch. Maruti's new subcompact called the SX4 shows another of the company's selling points. The model has two airbags, anti-lock brakes, an anti-theft system and automatic climate control. It sells for 689,000 rupees, or $16,980, in New Delhi. The equivalent Honda model, called the City ZX, costs 727,000 rupees without the frills.

"Our competitors can sell at our price, but can they produce at our cost?" Khattar said.

So far, investors are backing Khattar. "Everyone will have to beat Khattar because he knows the Indian market well," said Amit Kasat, an auto analyst at Motilal Oswal Securities. Maruti's stock price soared to 829.9 rupees on May 22; the government sold a 25 percent stake to the public in June 2003 at an issue price of 125 rupees. On May 10 of this year, the government sold its remaining stake for 23.6 billion rupees. Shareholders, including banks and insurance companies, now own 46 percent of Maruti; Suzuki owns the rest.

"He has done a great job to get Maruti among the most profitable car companies today," Govindarajan Chellappa, an analyst at Credit Suisse Group, said of Khattar. "What else could shareholders ask for?"

One thing is better roads. Outside Khattar's window, Maruti 800s, the smallest car the company makes, jostle with Toyota Corollas, Chevrolet Aveos and swarms of other models - some so tiny that they could fit on the bed of a U.S. pickup truck.

During Mumbai's rush hour, traffic crawls at 10 kilometers, or about 6 miles, an hour.

India's $14 billion highway development program is not keeping up - for drivers or carmakers. "We are not able to grow the way we should," said Rajeev Chaba, the president of General Motors India. He says India's inadequate roads and ports are part of the reason the country trails China as a car market.

MUL Divestment: A Profitable Exit

The Government's exit from Maruti Udyog is significant. Pragmatism displayed in the past has helped in higher returns from the share sale.

THE GOVERNMENT's exit from Maruti has passed off without any controversy. On May 10, it sold its residual stake of 10.27 per cent in the company to a group of financial institutions, banks and mutual funds for a total consideration of Rs. 2,368 crore, which works out to Rs. 797 a share. Those institutions had bid for the shares. The purchase consideration varies among bidders. For instance, LIC, which has successfully bid for 130 lakh shares, by far the largest number, is paying Rs. 800 for a share .On the other side, Corporation Bank is shelling out Rs. 850 a share for its acquisition of 5.88 lakh shares. Two mutual funds, Reliance MF and HDFC MF, have also acquired chunks of Maruti shares.

While these institutional investors are likely to unwind their positions at an opportune moment, the question arises as to why a direct sale to retail investors was not considered. After all, a large number of them participated in Maruti's initial public offer in 2003 and made it a resounding success. Many investors have seen their initial investments appreciate considerably.

The success of the Maruti IPO had catalysed the primary market. By not going through with a public issue the Government may have denied retail investors a chance to own a blue chip at an attractive price.

In January 2006, the Government had adopted a similar strategy to sell an eight per cent stake. State owned banks, insurance and financial companies were the beneficiaries that time. The justification on both occasions, never made public, might have something to do with keeping down issue expenses to the minimum. An IPO entails a huge expenditure.

Sensitive issue

A more plausible reason is that the Government did not want to draw attention to the divestment. An IPO generates plenty of publicity. Divestment, disinvestment or by whatever other name it is called, has become politically unacceptable even if, as in the Maruti case, it is only disposing of a residual stake.

Under the UPA government, no distinction is made between privatisation (where control of a public sector enterprise is transferred to a private party) and dilution of government equity in stages. Privatisation is completely out. Even the latter, where it does not bring down the government stake substantially, has been opposed politically.

For the Government, perhaps the most embarrassing aspect is its inability to win political consensus to sell off its minority stake in companies whose control had already passed on to private parties.

Strategic sale of profitable PSEs was becoming popular under the NDA government. The buyer paid a control premium and was also given the first option to buy the remainder of shares. In the case of listed PSEs, the buyer has to make an open offer to buy a substantial number of shares from minority shareholders on the same terms.

By questioning the actions of the previous government on ideological grounds, the present government has landed itself in a legal logjam. The right of the strategic buyer to acquire the balance shares offered has been opposed.

Thus, Sterlite, which had bought a majority stake in Balco some time ago, is unable to buy the balance shares, even after it had exercised its contractual right. The matter is now before the courts. The Government also stands to lose from the delay caused by legal battles while the fortunes of the company concerned suffer because of the uncertainty.

Under these circumstances, the Government has done well in Maruti's case. P. Chidambaram said, "The Government earned a handsome return. Maruti is an example, which showed that Government could enter an industry at an appropriate time and exit at an appropriate time.''

Why Maruti is unique?

Unfortunately Maruti has been the only one of its kind. Whether one looks at from a disinvestment perspective or from a much broader angle of collaboration between two unlikely partners, Maruti is probably unique. The joint venture with Suzuki Motor Company of Japan gave India its first modern car in the mid-1980s.

The car, the 800, has consistently defined affordability in personal transportation. Maruti continues to sell large numbers of the 800 even though it has other, more recently launched small cars in its stable. Despite intense competition it has the largest market share.

It is not as though relations between the two partners were always smooth. There have been at least two well-publicised spats between the two. In 1997, it was over the choice of the company's top personnel, with Suzuki backing Jagdish Khattar over the Government's nominee, R. S. S. S. L. N. Bhaskarudu. (Mr. Khattar continues to be the Managing Director). At that time there were apprehensions that Suzuki would not transfer its gear box technology to the Indian company thus blocking the latter's drive for complete indigenisation. Both these issues were solved albeit over time.

The second time a dispute between the two was publicly aired was in September 2004. The issue then was whether Suzuki was being fair to Maruti and its shareholders by announcing substantial investments in a new company (in which Maruti would be a minor partner). Fortunately this too was resolved with Suzuki.

In both cases, the pragmatism shown by the Government helped resolve what could have become highly contentious issues.

Again, it is its farsightedness that brought superior returns for the government beginning with the spectacularly successful IPO in July 2003.

Maruti Eyes Commercial Vehicle Segment

Maruti Udyog is eyeing an entry into the commercial vehicle market in India which it finds very attractive. However, the company officials said it would first study the study the commercial vehicle markets before deciding to enter it.

Suzuki has 1-1.6 litre engine commercial vehicles in its portfolio that would suit India and the company also has the advantage of a send this article to a friend network across the country. Suzuki has around 20 per cent market share in China in the commercial vehicle segment.

Maruti Residual Sale Floor Set At Rs 760, To Get Rs 22.50 Billion

The government expects to raise close to Rs 22.50 Billion (2,250 crore) by selling its 10.27% stake in Maruti Udyog to banks and financial institutions. A floor price of Rs 760 per share has been fixed for sale of government’s residual stake in the automobile giant, marking its final exit from the company after more than two decades.

Once the sale goes through, the government would have netted just short of Rs 50 Billion (5,000 crore) from its stake in Maruti between 2002-2007. Slap on the Rs 10 Billion (1,000 crore) control premium Suzuki paid up and the tally goes up to nearly Rs 6,000 crore.

As many as 36 banks, financial institutions and mutual funds have expressed interest in buying the government’s stake. These include LIC, SBI, Corporation Bank and Union Bank of India, a government official told reporters here on Wednesday.

“We hope to complete the sale by tomorrow,” the official said.The government plans to sell all the 2.96 crore shares (of Rs 5 each) held by it, representing 10.27% stake in Maruti.

Only bids of at least Rs 10 crore will be considered for the oversubscribed sale. Already bids have come in for 3.59 crore shares as against the 29.6 Million (2.96 crore) shares on sale. On Wednesday, Maruti’s shares were trading at Rs 802.05, up by 0.02% from the previous day’s close. According to sources, the bids were to be opened on Wednesday, but the process was postponed since heavy industry minister Santosh Mohan Deb was away. The government had invited expression of interest for the stake sale in February, but deferred the selling due to the volatility in the stock markets.

The government was also awaiting Suzuki’s green signal for allowing LIC to increase its holding beyond 10%. Suzuki has no objection to LIC hiking its stake in the company and the public sector institution would be allowed to participate in the bid, the official said.

LIC holds over 8% stake in Maruti after buying more than half of the shares sold by the government last year. When the government sold 8% stake in Maruti last year, it was stipulated that no financial institution would be allowed to increase its stake beyond 10% through the disinvestment process.This is the third stake sale by the government in the car market leader.

In mid 2003, the government sold 27.5% stake to the public at Rs 125 per share mopping up around Rs 993 crore in the process.This was after the government diluted its stake in the company in May 2002, to hand over control to Suzuki for a premium of Rs 10 Billion (1,000 crore).

Last January, it sold another 8% at an average price of Rs 678.24 a share netting Rs 15.67 Billion (1,567 crore) in the process. Currently Suzuki holds 54.2% stake in the company.

Maruti Floor Price Set At Rs 760/Share

The government fixed a floor price of Rs 760 a share for selling its remaining 10.27 per cent stake in the country's largest car maker, Maruti Udyog Ltd, a government official said on Wednesday. "We hope to complete the sale tomorrow," a government official, who wished not to be identified, told reporters.

Bidders will have to pledge Rs 100 million to take part in the sale.

Maruti, which is 54.2 per cent owned by Japan's largest minicar maker Suzuki Motor Corp, competes mainly with South Korea's Hyundai Motor Co and Tata Motors Ltd.

Shares of the company were down 0.56 per cent at Rs 796 at 0603 GMT in a Mumbai market that had fallen 0.62 per cent.

Honda To Challenge Suzuki In India With Small Car

Honda Motor Co., Japan's second-biggest carmaker, will start making its first small car model in India in 2009 to enter a segment that comprises three-quarters of all cars sold in the South Asian country.

The new car will be produced at a new factory in the western state of Rajasthan, Masahiro Takedagawa, chief executive officer of the local unit Honda Siel Cars India Ltd., said in an interview in the state's capital Jaipur today. The company will invest about 30 billion rupees ($728 million) on the project, he said.

The introduction of a small car will help boost Honda's presence in Asia's fourth-biggest auto market, where annual sales are forecast to triple to 3 million units by 2016. Honda will compete with Suzuki Motor Co. and Hyundai Motor Co. who control about 70 percent of India's one-million-unit a year car market because they mainly sell hatchbacks.

"With GDP growth and an increase in individual incomes, car sales will continue to grow in India despite some issues like the rise in interest rates and oil prices," said R.K. Gupta, who manages the equivalent of $70 million in stocks at Credit Capital Asset Management in New Delhi.

Honda, which signed an accord with the Rajasthan state government on the plant today, didn't offer any details about the model it will manufacture.

"We have several options and a couple of them we are developing from scratch," Takedagawa said. "We are now in the premium segment, which is 20 percent of entire market; hatchbacks are 80 percent of entire market."

Premium Pricing

Honda's cars in India are typically priced higher than equivalent models from other companies. The top-end Accord is about 17 percent costlier than the Hyundai Sonata Embera. Honda may follow a similar strategy when it starts selling small cars in India.

"We have no intention to compete with Maruti or Hyundai," Takedagawa said, without elaborating.

The Maruti 800 is India's cheapest car now at about 218,000 rupees. Tata Motors Ltd., India's biggest maker of trucks and buses, is developing an even cheaper car to be sold at 100,000 rupees, as it seeks to convert the nation's 45 million users of motorcycles and scooters into automobile owners.

Honda's Rajasthan plant will have the capacity to produce 60,000 cars a year when it goes on stream, Takedagawa said. Honda expects to raise that capacity to 200,000 by 2014, he said. The Rajasthan factory, which will employ as many as 4,000 workers, is expected to see the first car rolling off its assembly line in the October-December quarter of 2009.

Maruti Suzuki To Launch 'Grand Vitara'

Maruti Suzuki will unveil a new version of its SUV, the Grand Vitara in India soon, a top official of Maruti Udyog said.

"We have launched five new models in two-and-a-half years. We plan to launch the 'Grand Vitara' in the next few months," Mayank Pareek, Chief General Manager (CGM), Maruti Udyog Ltd., told reporters during the launch of the company's new A3 segment car, the SX4 sedan here today.

The SX-4 is priced between Rs 6.31 lakh and Rs 7.37 lakh (ex-showroom) in Chennai. Pareek said the sedan had 79 per cent localisation and was powered by the M-Series engine.

To a query, he said the company did not have any plans to launch the diesel version of the car. The SX-4 will be launched in the USA later this year, the CGM said.

Honda To Challenge Maruti In India With Small Car

Honda Motor Co., Japan's second-biggest largest carmaker, will start making its first small car model in India in 2009 to enter a segment that comprises three-quarters of all cars sold in the South Asian country.

The introduction of a small car will help boost Honda's presence in Asia's fourth-biggest auto market, where annual sales are forecast to triple to 3 million units by 2016. Honda will compete with Suzuki Motor Co. and Hyundai Motor Co. who control about 70 percent of India's one-million-unit a year car market because they mainly sell hatchbacks.

"With GDP growth and an increase in individual incomes, car sales will continue to grow in India despite some issues like the rise in interest rates and oil prices," said R.K. Gupta, who manages the equivalent of $70 million in stocks at Credit Capital Asset Management in New Delhi.

Honda, which signed an accord with the Rajasthan state government on the plant today, didn't offer any details about the model it will manufacture.

"We have several options and a couple of them we are developing from scratch," Takedagawa said. "We are now in the premium segment, which is 20 percent of entire market; hatchbacks are 80 percent of entire market.''

Premium Pricing

Honda's cars in India are typically priced higher than equivalent models from other companies. The top-end Accord is about 17 percent costlier than the Hyundai Sonata Embera. Honda may follow a similar strategy when it starts selling small cars in India.

" have no intention to compete with Maruti or Hyundai," Takedagawa said, without elaborating.

The Maruti 800 is India's cheapest car now at about 218,000 rupees. Tata Motors Ltd., India's biggest maker of trucks and buses, is developing an even cheaper car to be sold at 100,000 rupees, as it seeks to convert the nation's 45 million users of motorcycles and scooters into automobile owners.

Honda's Rajasthan plant will have the capacity to produce 60,000 cars a year when it goes on stream, Takedagawa said. Honda expects to raise that capacity to 200,000 by 2014, he said. The Rajasthan factory, which will employ as many as 4,000 workers, is expected to see the first car rolling off its assembly line in the October-December quarter of 2009.

General Motors, Volkswagen

General Motors Corp., the world's biggest automaker, started sales of its first minicar model in India in April and Volkswagen AG plans to introduce a hatchback based on the Polo model by 2009.

Honda currently assembles the City, Civic and Accord sedans at a plant near the capital, New Delhi. The factory, which began production in 1997, has a capacity of 70,000 vehicles a year, the number of cars the unit expects to sell in India in the current fiscal year that began April 1, Takedagawa said.

Honda is constructing the new factory to meet growing demand for cars in the South Asian nation where only seven in 1,000 own an automobile compared with 500 in Western Europe.

The carmaker sold a record 61,327 vehicles in the fiscal year ended March 31, a 44 percent increase from a year earlier. India's car sales in the last fiscal year rose 22 percent to a record 1.076 million, according to data provided by the Society of Indian Automobile Manufacturers.

Honda's Indian unit made a profit of about 3.4 billion rupees in the last fiscal year on sales of about 48 billion rupees, Takedagawa said.

Rates, Rupee

The company's car sales are unlikely to be hit by rising interest rates because 70 percent to 75 percent are businessmen, Takedagawa said. The appreciation of the Indian rupee is favorable for some models such as the CR-V sport-utility vehicle as a large proportion of its parts are imported, he said.

Honda joins Nissan Motor Co., General Motors, Volkswagen and other automakers who are expanding factories or building new factories in India where demand for vehicles is growing with an expanding economy and rising incomes. Automakers last year announced a combined investment of more than $5 billion by 2012.

General Motors is investing more than $300 million to build a factory in the western state of Maharashtra, while Bayerische Motoren Werke AG started its first factory at Chennai in the south in March to assemble its 3-Series and 5-Series cars.

Tokyo-based Nissan is joining France's Renault SA and India's Mahindra & Mahindra Ltd. in building a 40 billion rupee factory in the South Asian nation.

Indian Government To Exit Maruti By This Month

The Indian government has revealed that they now plan to exit the Maruti Udyog Ltd venture by disinvesting their stake in the company by May this year.

Maruti is the largest automaker in the country and is partially owned by the Japanese automaker Suzuki. A senior government official said in a statement on this decision: “The expression of interests have come. We have to complete it (the share sale) by mid-May. Financial bids will be called soon.”

Heavy Industry Minister Santosh Mohan Dev added: “The floor price has not yet been finalized. Experts will determine the price and time.”

The government at this moment owns around 10.27 per cent residual stake in the Maruti Udyog Ltd (MUL).

Market sources claim that the government expects to get a premium price over the current prevailing market price for their stake in the company. They are expected to sell this stake to Indian public sector financial institutions, public sector banks and Indian mutual funds.

Maruti To Re-enter SUV Market In Grand Vitara

The country’s largest car maker Maruti is expected to re-enter the SUV market, with a new model of Grand Vitara. The company had phased out the earlier Grand Vitara model in December last year, but now plans to get the new model to India.

The new Suzuki Grand Vitara model is expected to touch Indian shores in the next 3-4 months. "We do plan to get the SUV to India very soon. The new model has new features specially suited for the Indian market," said a Maruti spokesperson. But the company has no plans to manufacture the vehicle from India.

The Grand Vitara will be imported in completely built form from Japan. According to sources, the SUV is expected to cost between Rs 18-20 lakh.

With the Grand Vitara's re-launch and the likely launch of SX4 in the next month, the company will have presence across nearly all major segments. "We always had a presence in the SUV market and it is an area of focus. The launch of this new fresh look of Grand Vitara, shows our interest in this segment," the spokesperson said. The new Grand Vitara was launched globally in the last few weeks and is a five-seater SUV.

However, experts feel that Maruti should rather focus on their new SX4 model, than the SUV segment. "It is a good car, but definitely not better than competition and SUVs like Honda CR-V. I do not think that the SUV model is a focus for Maruti," said Hormazd Sorabjee, an automobile analyst.

The SUV segment in the country is expected to see major action with other players like Mahindra & Mahindra and Nissan. M&M is expected to launch its new SUV, Ingenio, later this year and recently launched the new-look of its entry-level SUV Bolero. Nissan has also announced its plans to launch an SUV for the Indian markets. With these new launches and new looks, consumers are sure to be spoilt for choice.

Maruti Launches SX4 at Rs 6.18 lakh

Maruti's three-box car Suzuki SX4 has hit the Indian roads. Targeted at the A-3 segment, the all new SX4 sedan, from the country’s biggest car manufacturer, has been launched in two variants sporting 1.6 litre engine. The lower version of SX4, VXi, is priced at Rs 6.18 lakh while the higher variant, ZXi, comes at a price tag of Rs 6.89 lakh. The upper version of Zxi has been priced at Rs 7.24 lakh.

Maruti SX4 belches out a total of 102 horse power with the help of Suzuki's advanced, next generation M-series global engine. The car sports a 16-valve, DOHC, 1.6 litre engine which is capable enough to meet the stringent Bharat stage-IV emission norms. Plus, the car can be made compatible with the forthcoming Euro-V emissions norms too, if needed.

SX4 car has been especially groomed with Swift-like modern looks to take on the current segment leader, Honda City. The extended version of the same platform is being used for the SX4 that will currently be sold in China and India.

The company claims the new SX4 to be the tallest, longest and the widest car in the 'C' segment. With enough of legroom and headroom in the offering, it will be a complete driver's car. Cherry on the cake is its high ground clearance of 190mm. The short overhangs and the large glass area also adds to its beauty and makes it more featurish.

The interior of the sedan has been a given dual-tone theme of grey and skin colour. Unlike other Maruti cars, the quality of upholstery used seems to be pleasing. Leather seats are optional in the top-end ZXi variant and the music system comes as a standard feature.

BusinessWeek profiles world's cheapest cars

What a difference a day makes, or a few years at least. While many automakers were rushing to add premium models to their lineups just a few years ago, today the buzzword is affordability. Perhaps a ripple effect of high gas prices, or the green movement, or even the emerging third-world automotive markets, everybody seems to be thinking cheap. In response, BusinessWeek has compiled a list of super affordable vehicles that will be available over the next couple of years. The common factor here is that all will have an MSRP of less than $10,000. Some as low as $3,000!

BusinessWeek credits Renault with launching this new wave of cheap cars with its Logan sedan back in 2004. That initial sedan has proven popular and spawned a range of six different models. The cheap-car list includes names like GM, Hyundai, Chery, Dacia, Suzuki, Geely, Fiat and Tata. But new entries from Nissan, Fiat, VW, and Toyota are in the works, showing the increasing importance of this segment. Renault-Nissan has even announced it is planning to build a car for under $3,000, perhaps as low as $2,500 according to Chief Executive, Carlos Ghosn. He made the announcement at a plant-opening ceremony on April 4.

Don't expect supercars or luxury rides at these bargain basement prices, but you might actually get more than you realize for your money. These are reasonable alternatives to eight-year-old Civics and Corollas, rather than the equivalent of modern-day Yugos. And the list isn't filled with just microcars, either. Sure, there are small cars aplenty, but the list includes sedans, SUVs and even a minivan.

Maruti reduces price by up to Rs5,000

India's biggest car maker Maruti Suzuki has reduced the price of its products by up to Rs 5,000 following increased tax sops offered by Haryana, where its facilities are located.

"We have passed on the benefit of the reduction in sales tax by Haryana from 3 per cent to 2 per cent effective April 1 to dealers, who in turn have passed it on to customers," a company official said.

The reduced sales tax would translate to a price cut in the range of Rs3,000 - Rs5,000 across various models, the official added. Haryana had in the beginning of the month reduced sales tax from 3 per cent to 2 per cent coinciding with the reduction in central sales tax from 4 per cent to 3 per cent.

Maruti Udyog All Set To Launch SX4 Sedan

Maruti Udyog Ltd., is set to launch the SX4 Sedan in the first half of this month, ahead of its commercial launch in Europe.

Suzuki Motors holds majority stake in Maruti Udyog Ltd. Sources said the Sedan was most likely to be launched in India in the second week of this month. Its commercial launch in Europe would be in autumn this year.

In Japan, the launch would happen later this year, these sources added. SX4 Sedan would be Suzuki's second world car to be launched in India after Swift.

Made on a global new platform, SX4 Sedan is fitted with technologically advanced and next generation M series engine. The SX4 Sedan to be launched in the European market would also have the same engine as in India, sources said.

The 1.6 litre engine SX4 Sedan with the 4 valves would produce a high power of 102 bhp @5500 rpm. The Sedon would offer features like integrated music system, auto climate control, audio control on the wheels, glass antenna and adjustable steering.

"Suzuki has designed this engine by picking up the best features of the engine series used so far in Suzuki vehicles and incorporating them in this latest series of future ready engine," sources said.

In India, the car would be manufactured at Maruti's world class manufacturing facility in Manesar, which had gone on stream in February.

Maruti Q4 Net Profit Up 24%, Beats Forecast

Top Indian car maker Maruti Udyog Ltd. (MRTI.BO: Quote, Profile, Research reported a 24 percent rise in quarterly net profit on Tuesday, as cost cutting and strong sales of its fuel-efficient small cars offset volatile raw material costs. Maruti, 54.2 percent owned by Japan's Suzuki Motor Corp. (7269.T: Quote, Profile, Research, said it earned a net profit of 4.49 billion rupees

($109 million) in the January-March quarter, up from 3.61 billion in the same period a year earlier.

That beat a forecast of 4.23 billion rupees in a Reuters poll of 11 analysts.

Sales of Maruti vehicles, including the best-selling Alto and Swift hatchback, rose 30 percent to 200,112 units in the quarter.

Shares of Maruti, which has a market value of around $5.3 billion, fell nearly 12 percent in January-March, mirroring the decline on the sector index (.BSEAUTO: Quote, Profile, Research and trailing a 5.2 percent fall for the benchmark (.BSESN: Quote, Profile, Research.

($1=41.2 rupees)