"Sales of 800-cc model have not only recovered but are also marginally higher than the daily sale levels for the same period last year," a leading dealer in the capital said.

This particular dealer's sales had slumped to 3-4 cars per day in the first three weeks of June from about 20 cars a day in May. They have since soared 300 per cent from the lowest level, to 13-15 cars per day currently. On Friday, the dealer sold a total of 45 units of which 20 cars were Maruti 800s.

With sales recovering handsomely, the company has directed all its dealers to immediately stop all discount and gift schemes as it sends a negative signal to the customers. Though the recovery is more prominent in the case of Maruti 800, dealers say sales and enquiries for Wagon R have also picked up following a price reduction of Rs 25,000.

"In the days following the announcement of the price cut, the Maruti 800 standard and EX models have being doing really well though there is also a good response to Wagon R after the price reduction," a dealer said, adding that his Wagon R sales had risen from one car per day to about three cars per day now.

Sources, however, pointed out that it is not clear whether the growth will continue over the next few months. The upward movement in sales has also eased the company's huge inventory pile up which had at one time reached 27,000 units. A Maruti official said sales are picking up and despatches are moving, but a clear picture would emerge from the retail side only next week. Sources said that with the price gap between Matiz and Santro and the 800cc increasing once again post price cuts, fringe customers were shifting back to Maruti 800.

Sources in some finance companies said that some customers had shifted their loans from Santro and Matiz to the Wagon R. The price differential between the Wagon R and Santro has been reduced to between Rs 15,000 and Rs 20,000. The new prices announced by Maruti will be effective for a limited period of three months, after which the company would review its marketing strategy.Prices for Maruti 800 have been reduced between Rs 10,000 to Rs 23,000, while Wagon R has been cut by Rs 25,000. The Maruti 800 standard will now be available at Rs 2.12 lakh, while the Maruti 800 EX at Rs 2.59 lakh.

The Maruti standard (Euro 1) will be available at Rs 1.99 lakh. The Wagon R LX will now be available at Rs 3.44 lakh.