Maruti plans to keep Esteem rolling with cheap finance schemes
M Anand
Maruti Udyog Ltd is planning new cheap finance schemes for its luxury car - the Esteem. The company is currently working with Maruti Countrywide and Citibank and is likely to announce the schemes within a month.``We are considering a zero interest offer for loans with a one year tenure. Another option being considered is to charge zero interest for the first year of a loan with a three year tenure. An interest of about 12 per cent for the second year and a higher rate for the third year is being considered,''sources told The Financial Express .However, the development and implementation of such schemes will be localised. ``Though cheap finance is a national strategy each state will have its own variations,'' they said. Maruti Udyog had tried out similar schemes in the past and had recieved a good response. ``Esteem sales have been strong during the last couple of months and we hope to keep the tempo going,'' they said. However, this will be the first such scheme after the company launched its
1998 Esteem.Company sources however ruled out the possibility of offering cheap finance on its popular 800 cc model. ``The waiting period is as high as three months in some cases. When the demand is so high, why should we cut rates?'' a company official quipped. Passenger car manufacturers have found low interest rates an attractive tool to stimulate demand. Daewoo's cheap loans for the Cielo and more recently Mahindra Ford's cheap loans on the Escort have both had the desired effect. Maruti's Esteem has performed much better than competition during November and December, when it sold about 2000 and 1500 cars respectively. December was a virtual washout for competition. The Opel Astra, Ford Escort and Cielo sold an average of only 300 cars each. Meanwhile, Suzuki's new 657 cc Cervo C, showcased at the Expo has recieved an enthusiastic response. The model, introduced in Japan in 1997 is sold there for the equivalent of about Rs 3.5 lakh. The tourbo charged engine delivers a power of 55 bhp, which is evenhigher than the Zen, which has a power of 50 bhp. The Maruti 800 cc delivers 39 bhp.
Copyright © 1998 Indian Express Newspapers (Bombay) Ltd.
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