The Hindu Business Line : Maruti hikes prices of Euro-III models

CAR major Maruti Udyog Ltd on Thursday raised the prices of three of its models by Rs 10,000 to Rs 15,000, with the introduction of models with Euro-III compliant engines.

The price hike has been effected on the Euro-III compliant version of the Zen, WagonR and Baleno.

Euro-III compliant versions of other car models in the company's portfolio, including the Alto, Esteem and Omni, would also be made available soon with higher price tags.

The Euro-III emission norms are being made mandatory across 11 major cities (including Delhi and Mumbai) in the country from April 1.

When asked whether the price hikes would impact customer demand, Mr Jagdish Khattar, Managing Director of Maruti Udyog, said, "There is no option but to increase prices.

The price rise is also on account of increase in steel prices and other component prices, our costs and our vendor's costs."

He, however, added that the current price increase was not sufficient to make up for the technology costs for Euro-III vehicles.

Following the price hike, an entry-level WagonR model with a Euro-III engine will cost Rs 3,35,123, compared with Rs 3,22,123 for one with a Euro-II engine.

Other carmakers are expected to follow suit with price hikes as they introduce Euro-III compliant vehicles before April 1.

According to industry sources, most of these models are still in the process of receiving certification from the Automotive Research Association of India (ARAI).

Car manufacturers have invested significant amounts in upgrading their vehicles to meet new emission norms.

Interestingly, Maruti had announced a price hike of Rs 2,000-Rs 3,000 on all of its Euro-II compliant models (excepting the Maruti 800) on Wednesday citing higher raw material prices.

The 11 cities where Euro-III norms will be introduced from April 1 include the National Capital Region, Chennai, Mumbai, Kolkata, Ahmedabad, Bangalore, Hyderabad and Secunderabad, Kanpur, Pune, Agra and Surat.

Till such time, both Euro-II and Euro-III vehicles will be available in these cities.

Plans to source steel locally

NEW DELHI: In a bid to reduce costs, Maruti Udyog plans to source more steel from local companies such as Tata Steel, among others, starting next fiscal.

"Domestically procured steel offers us a competitive edge as prices are lower compared to the price of steel produced by overseas companies. Next fiscal, a number of contracts for steel procurement will be renewed, and there will be preference for Indian players," Mr Jagdish Khattar, the Managing Director, said.

Maruti currently sources about 65 per cent of its steel from overseas, including companies such as Posco, South Korea's largest steelmaker.

The automaker is aiming to reduce the import of steel to 50 per cent of its total need.

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