The Maruti 800 may be based on 1980s technology, but it remains very popular as an entry-level model in India. Its obituary has been written before, but the 800 has defied predictions of its demise. But changes to the regulatory environment in India could finally mean the end of the road for the 800. But perhaps not just yet. Deepesh Rathore and Tilak Swarup report.
It was the fag-end of 1983, in the cold winter of North India, when one Harpal Singh of New Delhi was handed the keys to a small, never-seen-before-in-India, hatchback by the then Prime Minister, the late Indira Gandhi. What in any other circumstances would have been just an ordinary car launch turned out to be the start of the automobile revolution in India.
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The past: limited choices better left alone
India’s protected market meant that until the early eighties Indians had essentially three model choices in terms of automobiles: the Morris Oxford derived Hindustan Ambassador, the Fiat 1100 derived Premier Padmini and the Standard Herald derived Gazel. With all three products obsolete, quality construction more of an afterthought and attributes like power, safety and comfort being last on a manufacturer’s to-do-list, the Indian automobile industry was going through what might be termed its anthracite period in history.
The company Maruti Udyog was conceived by the Indian government in 1981 as a means of providing affordable personal transportation to Indians. Named after Hanuman, the name of the God of Wind in Hindu mythology, Maruti was the brainchild of the late Sanjay Gandhi, son of the then Prime Minister Indira Gandhi. After toying with the idea of a joint venture with Volkswagen, Renault, Daihatsu and some other majors, Suzuki was short-listed because of the Japanese major’s expertise in small cars.
The Maruti 800 based on the European Alto IV (SS80 in export markets) was launched in December 1983 in a four-door, two-box saloon (the tailgate opened only from the externally hinged rear window that was the access to the boot area) with a total length of 329.5cm. The car was powered by a 796cc, three-cylinder, SOHC, 6-valve, carburetted engine and had front-wheel drive. Power was 39 bhp, which though not much, still made for a respectable power-to-weight ratio because the car weighed slightly above 600kgs. The launch price was INR 47,500 making it the cheapest car at that time in India. The rivals tried to play it down on the power front, citing three cylinders to be insufficient for taking on a five-passenger load.
However, the Maruti 800 proved everyone wrong by a long margin. It was a time of licenses in India and manufacturers needed to get a license from the government on what to make and what numbers to make. This used to create a huge gap between demand and supply resulting in long waiting lists. Often waiting lists for cars would take up to three years to clear. A Maruti 800 booked in 1984-85 would be cleared only by 1987-88. The 800 soon notched up a huge waiting lists as sales boomed.
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By GlobalData |
Maruti 800 Present |
The Maruti 800, in 1983, marked the introduction of the modern automobile into the Indian passenger car market. People were awed by Japanese reliability, ease of operation, refinement and fuel efficiency – attributes that the small Indian passenger car industry, in 1983, was unable to provide.
Reasons for the success of the Maruti 800
Within a few months of its launch, the Maruti 800 became the largest selling car in India, a title it has held for every month since then, till the month of May 2004, when its stable-mate Alto led it by a few hundred units.
Like all success stories, it is difficult to point out one single factor that has been responsible for the car’s success, but several factors stand out, including:
- The Maruti 800 is the cheapest car in the Indian market. With India being a largely price-driven market, the 800 has become an entry point for first time car buyers. Price difference between Maruti 800 and its nearest rival used to be about INR 50,000-100,000, which is 25-50% of the 800’s price.
- The Maruti 800 makes an excellent entry-level car. It is good value for money and yet comes with basic amenities like air conditioning, coil-sprung rear suspension and bucket seats in the front. Indian legislation has also ensured that there are three-point seat belts all around.
- Over the last twenty years the 800 has established a reputation for being trustworthy and reliable.
- The Maruti 800 is simple and basic and yet sophisticated enough to meet the requirements of safety and comfort.
- Maruti has the largest network of dealers in India, which means that the 800 has the widest reach.
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Maruti 800 1997 |
Apart from these, the 800, being a Maruti model, enjoyed a number of benefits from the government. There were other sops too specifically for Maruti, which helped the company keep prices down for the 800. The Indian government is alleged to have curbed competition in order to promote state-owned Maruti. Consequently, several new car projects like Premier Automobiles planned tie-up with Nissan to manufacture the Sunny in the mid-80s did not receive government approval. Thus the Maruti 800 (actually up to the late 90s) did not have any real competition in the Indian market. A long period of more than 15 years without any real competition ensured that the 800’s volumes stayed high, enough to amortise costs of the plants and dies used for manufacturing. This has ensured that the Maruti 800 has managed to retain its low pricing in a market where the nearest competitor, till a few months back, was priced about 50% higher.
Maruti 800: the timeline
Maruti launched the first 800 (Alto IV generation), the SS80, in the Indian market in December 1983. The car was known just as the Maruti 800 and was essentially a four-door saloon with a rear window that opened for access to the boot area. The model received a heavy facelift in 1986 with the introduction of the SB 308 body style. This new shape made the 800 into a five-door hatchback though the mechanicals remained the same including the 796cc, three-cylinder engine and the leaf-spring rear suspension. This body style continued unaltered, barring a few changes to the grille, for the next 11 years till 1997. The present Maruti 800 shape was launched in 1997. Maruti replaced the carburetion system in the 796cc engine in early 2000 with an MPFI unit to meet the Euro II emission norms. Power went up from 39bhp to 46bhp though there were no other major changes. Platform remained the same though the rear leaf spring suspension was changed to coil springs for the deluxe model. The company also offered a five-speed gearbox in the deluxe model. The 800 in this form has continued till date though the company has now withdrawn the five-speed gearbox from the range in order to push the new Alto.
The 800’s effect on India
It would be wrong to credit the 800 with merely the physical growth of the Indian market in its early days. The car has been for the Indian market what the 2CV and the Beetle have been for their respective markets. The 800 has been the car that has put India on wheels. Thanks to the model being launched in 1983, the Indian automotive benchmark was raised a few notches in terms of performance and quality. From an object of purely aspirational value, the 800 has transformed the passenger car in India to a perception more along the lines of a basic necessity. In doing so the 800 has provided a platform for all the models higher than it in the market. It has helped the market to mature to a level in which there is a place for many product segments and, at the top-end, models like the Porsche Cayenne or the latest S-Class.
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Maruti 800 1986 SB308 |
The 800 has encouraged low pricing in the Indian marketplace. Thanks to the low price benchmark set by the 800, competitors are inclined to price their products lower to come close to the 800. This has resulted in a market where the B-segment hatchbacks start retailing at little above INR 250,000 and a sub-compact like the Tata Indigo and the Ford Ikon (three-box Fiesta saloon based on last generation European model) at little above INR 400,0000. This has made a number of cars more accessible to the Indian customer.
The employment generated (both primary and secondary) was huge as Maruti resulted in the growth of a number of ancillary units. Thanks to the large volumes produced of the 800, the ancillary industry that started with Maruti in the Delhi-National Capital Region has benefited the most. Companies like Sona Steering (now Sona Koyo), Subros and Jai Bharat Maruti are amongst the most successful suppliers in India.
On the other hand the contribution of the 800 in the socio-economic development of the satellite townships of Delhi cannot be denied. The initial phases of the growth of Gurgaon (a significant satellite township of Delhi) was fuelled by the local Maruti manufacturing unit. The infrastructure development kicked-off by Maruti (and its mainstay, the 800) in the early 80s laid the foundation for Gurgaon to develop into the modern IT-BPO hub that it is today.
The 800: Future Imperfect?
The Indian passenger car market is witnessing a sea change with the B- and C-segments being the fastest growing. The A-segment, where the Maruti 800 is the only player is not growing and 800 sales have been stagnating in recent months. In fact, May sales went down on a year-on-year basis, which Maruti attributed to uncharacteristically higher sales in May 2003. But more than the stagnation (or decrease) in sales, it is the rise in sales of the Alto that has affected the 800.
Some time back, Maruti had reduced the prices of the Alto with the base version now selling at around INR 230,000 (non AC), only slightly higher than the AC version of the 800 (INR 226,000). Even the AC version of the Alto at INR 260,000 is not very far off the 800. The Alto is powered by the same 796cc engine, has more modern mechanicals and is bigger. It is also regarded as a more expensive car in the typical Indian social strata. Thus the pricing of the Alto has made it a substitute for the 800, the worst affected being the 800’s wedding gift market. People who used to gift Maruti 800s are now gifting the Alto as for only a few thousand more they command more respect. Alto sales started creeping up once Maruti launched the non-AC version and the gap between the 800 and Alto narrowed and the bigger car finally overtook the traditional best seller in May 2004. In May, the score read: Maruti 800 – 10,016; Alto – 10,373 units.
It seems likely that the Alto will continue to lead in the Indian market. Maruti executives point out that April-July is not a good period for the 800 sales as the 800’s main customer – the salaried middle-class in India – are under financial pressure (because of income tax in Feb-March and expenses during the start of the financial year like school/college admission fees) during these months and also because of a tendency to defer purchase decisions till after monsoon.
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Maruti 800 1983 SS80 |
In reaction to falling sales, the Indian media has been quick to speculate the eventual demise of the Maruti 800, a speculation that Maruti executives are quick to dismiss and they have a point too as a 10,000 unit per month model (and currently India’s second largest selling car) cannot be retired so easily. They point out that the company’s strategy is to bring down the Alto to A-segment prices so that Maruti can offer two models in the same price band. “Two models will only help grow the A-segment like our three models have grown the B-segment,” points out an executive.
Jagdish Khattar, the Managing Director of Maruti Udyog adds, “The point that Maruti 800 would make way for a lower priced Alto, assumes that price is the only factor for entry-level buyers. That is not true. For many thousand aspirants, Maruti 800 is the only brand they will settle for, because it is the one they trust.”
And trust is something that the 800 has in abundance as a brand that has crossed 20 years of existence and sold in excess of two million units to date. To support the 800, Maruti is now targeting the 40-million two-wheeler owners in India. With financial institutions ready to offer loans up to eight years, the Maruti 800 base model is now available at a down payment of INR 21,000 and an EMI of INR 2,500, something that brings it closer to two-wheeler prices, a fact that Maruti is strongly publicising with millions spent on a new ad campaign to highlight the affordability of the 800. A fresh facelift cannot be ruled out.
Yet, the bias towards the Alto cannot be missed as the company realises that they have an eventual replacement of the 800 now. The intention is to depreciate the Alto faster so that prices can be further brought down. Maruti is also working hard to further reduce component costs of the Alto so that prices can be further rationalised. Other steps like stopping the 800 five-speed version and delaying a long overdue facelift for the 800 have pushed customers towards the Alto.
What may eventually bring the end to the 800 story – point out some analysts – is future legislation. New safety legislation and the impending upgrade to Euro III may make Maruti think very hard about whether or not to invest in the 800. But that is still three years away and this is a long time period in India’s automotive industry.
Time Line:
- December 1983: Launch. SS80, four door saloon with a rear window that opened like a hatch.
- 1986: Major facelift: SB 308, the tailgate opens completely and the car is now a five-door hatchback
- 1997: First major facelift in eleven years. New headlight, taillight, dashboard, indicators etc
- 2000: Upgraded engine MPFI. 46bhp. Also five-speed gearbox, coil-spring rear suspension and radial tyres.
- 2003: Five speed version withdrawn.
Prices over the past five years haven’t moved much | ||
February | 2000 | 2,32,444 |
June | 2000 | 2,15,401 |
January | 2001 | 2,21,144 |
March | 2001 | 2,08,903 (excise cut) |
May | 2002 | 2,24,201 |
July | 2002 | 2,06,419 (price cut) |
March | 2003 | 2,00,969 (excise cut) |
April | 2004 | 2,04,827 |
| Maruti 800 (Domestic Sales Volume) Fiscal Years | |
| 1983-84 | 852 |
| 1984-85 | 20269 |
| 1987-88 | 63763 |
| 1994-95 | 106114 |
| 1995-96 | 139403 |
| 1996-97 | 183593 |
| 1997-98 | 184584 |
| 1998-99 | 161975 |
| 1999-00 | 189061 |
| 2000-01 | 151976 |
| 2001-02 | 144387 |
| 2002-03 | 143322 |
| 2003-04 | 167561 |
