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Maruti Launches Ertiga In An All New Category

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To fill the gap in the Sports and Multi utility segments, market leader Maruti Suzuki India on Friday aunched its compact multi-purpose vehicle Ertiga, in an all new category -- Life Utility category.

So, is this a deliberate shift from the mini segment where Maruti Suzuki India has seen a decline in sales lately?

Consider this: According to the latest Society of Indian Automobile Manufacturers (SIAM) data, in the mini segment consisting of Maruti 800, Alto, A-Star and WagonR models, the company sold 491,389 units in 2011-12 as compared to 573,238 in 2010-11, a 14 per cent decline. For the month of March, the segment saw a 10 per cent drop in sales. 

This clearly indicates that there is a sudden shift in the passenger car market from the entry level mini segment to hatchbacks and sedans, particularly diesel variants.

"We want to sustain the business and therefore we are launching products in categories where we are absent. This does not mean that we are shifting our focus," says Mayank Pareek, managing executive officer - Marketing & Sales, Maruti Suzuki India.

"Utility vehicles has demonstrated a compounded annual growth rate (CAGR) of 20 per cent over the past three years and is a promising segment," he added. MPV's at present account for 10 per cent of the Indian automobile industry. Maruti Suzuki India has invested Rs 410 crore in overall development and production of the car.

The Ertiga will be in direct competition with the soon-to-be launched Mahindra Mini Xylo in the compact MPV space, which is expected to be priced in the Rs 5-6 range. Besides, it might also compete against some of the cheapest SUV and MUV models such as the Premier Rio which is priced up to Rs 6.46 lakh. In the compact SUV category, Ertiga will also face competition from Ford Ecosport, Renault Duster, Ssangyong's XiV 2 and Skoda Fabia Scout.

With the all new K-Series engine, Ertiga will be available in both 1.4 litre petrol and 1.3 litre DDiS diesel variants. The petrol variant is priced between Rs 5.89 lakh and Rs 7.30 lakh, while the diesel variant will cost between Rs 7.30 lakh and Rs 8.45 lakh (ex-showroom Delhi). The company claims a fuel efficiency of 16.02kmpl for the petrol and 20.77kmpl for the diesel powered Ertiga.

Maruti Suzuki India will also start exporting the Ertiga to markets in the South East Asia. It also has plans to start a completely knocked down (CKD) operation in Indonesia soon. At present, the uitility vehicle segment in India witness a sales of about 40,000 units per month.