A decision to launch exchange-offer schemes was taken at the All India Maruti dealers' conference in January this year, keeping in mind the company's on-going expansion programme which will increase its capacity to 3.5 lakh units.

Maruti decided to play a "catalytic role" in exchange-offer schemes in the face of emerging competition in the small-car segment, he said.

The scheme will help Maruti, the current market leader in the passenger-car market, further its market share from the current 85.1 per cent, Bhaskarudu said."We have asked our joint venture financial institutions, Citycorp and Countrywide, to providefinance at the dealers' outlets for exchanging old Maruti 800s with new ones," he said, adding the car giant would not be directly involved in the scheme. As of now over 20-lakh Marutis are on the roads, and dealers are selling exchanged vehicles with a guarantee of six months after a good repair job, he said.Maruti, which is at the centrestage of a bitter battle between the government and Suzuki, is also under pressure as it has not introduced any new model in recent times.

Asked about the reported move of Fiat to exchange old Maruti with a new Uno, Bhaskarudu said "It is a free market and every player is free to evolve his own marketing strategies."Citycorp and Countrywide, in which Maruti holds 26 per cent equity, will assess the financial capabilities of dealers before providing assistance for setting up workshop facilities."The dealers will have to find prospective customers willing to exchange their old Maruti 800, fix up a price for it and also find a customer for the same," Bhaskarudu said.