Through a series of price cuts as well as launching of stripped-down versions of their existing models, Maruti plans to bring the 800cc models prices down by an average of around Rs 20,000 to 25,000 per car. In the case of the Zen, the stripped-down version is expected to cost Rs 50,000 less.With this, Maruti hopes to not only take on the yet-to-be-launched Indica, it also hopes to take the wind out of the sails of the newly-launched Santro and Matiz. The stripped-down Zen will be priced at par with the basic Santro model (both cars have air-conditioners, but no other frills), while the existing Zen deluxe model will be marginally cheaper than Santro's competing car. If the Tatas finally price the basic Indica model at around Rs 2.7 lakh, the Zen will also be in a goodposition to take this on.

The company also plans to add a new model of Maruti 800 which will have an improved suspension -- independent -- and radial tyres. Right now, the suspension is leaf-spring suspension. The price of the standard 800 model will also be reduced with its seat belts and some features being changed. MUL is also planning to introduce a stripped-down version of Zen which will not have features such as a music system, coloured bumpers, luggage tray. Basically it would be the same model which was discontinued when Zen VX was introduced, sources said.

Company officials including the managing director RSSLN Bhaskarudu and J. Khattar, joint managing director, were not available for comments. They have been engaged in intense discussions for several months with vendors to cut component costs drastically. A special committee of directors was also set up to negotiate price cuts with vendors. Sources in the company confirmed that the company had started manufacturing the new models in December andthese would be dispatched from the first week of January.

The company had earlier cut down production by nearly 20 per cent in the first week of November in view of the recession in the market. The production cut was made in the first week of November to avoid build up of inventory, according to the company. It had attributed the move to a combination of factors, including recessionary trends and requirement of permanent account number for purchase of cars. MUL with a turnover of Rs 8473.7 crore for the year 1997-98, currently enjoys a market share of 80 per cent in the passenger car market. Nearly 60 per cent of its sales are of the 800 and Zen models, which was under attack from the new entrants and the Tata Indica.