Close on the heels of reducing prices of premium mid-size sedan Baleno, India's largest carmaker Maruti Udyog Ltd on Friday announced a price cut of Rs 38,000 on the diesel versions of its mid-size car Esteem.

The Esteem diesel would cost Rs 483,000 (ex-showroom, Delhi) while the car with power steering would sport a price tag of Rs 509,000, company sources told PTI in New Delhi.

The company, which also had introduced a new variant of Baleno on Thursday, has cut prices of the Esteem and Baleno models as part of a move to garner a higher market share in the mid-size and premium mid-size categories, they said.

MUL imports diesel engines and the price reduction was aimed at passing the benefits of drop in customs duty to customers, they said.   

The Baleno also has relatively high import content.

A new variant with aggressive pricing was seen as a move by the market leader to take on the competition, industry observers pointed out.

The cumulative (April-December 2003) sales of the company grew by 30 per cent.

In the entry-level segment, MUL posted a 28 per cent rise, while in the compact car category it saw a sales growth of 45 per cent with a market share of 31 per cent.

Though sales jumped by 23 per cent in the mid-size category, MUL's market share remained the same.

MUL, which is 54.2 per cent owned by Suzuki Motor Corporation of Japan, is also bullish on the overseas market and has said its exports during 2003-04 would touch an all-time high of 50,000 units.