* Citigroup maintains its 'buy' rating on Maruti Suzuki
and raises its target price to 1,681 rupees from 1,654 rupees. * Maruti Suzuki is seeing signs of improving demand in the festival season, with "healthy" volume pick-ups according to a Citigroup research note attributing the information to its recent conversations with the auto maker's management. * Citigroup says Maruti Suzuki and competitors have raised prices by around 1-2 percent "because companies sense that customers are returning to showrooms," according to the report dated on Monday. * The bank warns FX and labour remains areas of concern for Maruti Suzuki, which suffered violent clashes between workers and management at its plant in Manesar in July. * "Manesar labor issues have been resolved for now, but we think labor is a contentious aspect not just for MSIL but the manufacturing sector in aggregate," Citi writes. * Maruti shares up 0.8 percent at 1,397.05 rupees.