Maruti Suzuki's Journey to Becoming India's Largest Automaker

2012 Maruti Suzuki India Ltd.
Ankit Singh 10BSPHH010104

2
Maruti Suzuki India Ltd.
Table of Contents
Origin and genesis of Maruti Brand .............................................
....................................................................... 3 Maruti
Udyog Ltd. ....................................................................
.......................................................................... 3 Mil
estones ........................................................................
............................................................................. 4
Journey Of Maruti Suzuki .......................................................
........................................................................ 5 Compa
ny Vision ......................................................................
....................................................................... 6 Compan
y Values .......................................................................
..................................................................... 6 Board of
Directors .....................................................................
..................................................................... 7 Current
Scenario .......................................................................
..................................................................... 8 Company
Name and Promoters .............................................................
............................................................10 Promoters........
................................................................................
.............................................................10 Background of th
e Promoter Suzuki Motor Corporation ...............................................
............................11 Brand Portfolio and Product Strategies...........
................................................................................
...................13 Competitive Landscape for Passenger Vehicles in India ....
.............................................................................13
Market Share by Segment for Passenger Vehicle Segment in India..................
...............................................14 Maruti Brands ................
................................................................................
...............................................17 Generic Strategies @ Maruti ..
................................................................................
.......................................24 Marketing Environment ................
................................................................................
....................................26 Market Share of Automaker in India ......
................................................................................
.......................28 Domestic Car Sales Model Wise from 2004 to 2010 ......
................................................................................
.30 Competitive Landscape ......................................................
...............................................................................4
0 BCG Matrix ...................................................................
................................................................................
40 Porter Five Forces ..........................................................
...............................................................................4
3 Macro Environment Analysis ...................................................
......................................................................45 Strateg
ic Pricing Analysis ............................................................
.......................................................................51 Brand
Ambassadors ....................................................................
......................................................................55 Tag Lin
es for various Maruti brands: ..................................................
...........................................................55 Brand Ambassadors
................................................................................
......................................................55 Future strategy of Maru
ti .............................................................................
.....................................................57 Profit and Loss Account
(Forecasted) ...................................................................
..........................................59 Risk Factors.......................
................................................................................
............................................60 Outlook .........................
................................................................................
...............................................61
3
Origin and genesis of Maruti Brand
Maruti Udyog Ltd. Maruti was incorporated in 1981 as a public sector company and
started its business operations in1983 in technical collaboration with Suzuki M
otor Corporation Japan with the objective of making small cars with latest techn
ology and economic price offerings aiming at the affordability by the masses. If
one may observe, the first phase of Maruti lasted from 1983 to 1995.This phase
saw the revolutionary launch of the initial models and unprecedented commercial
success of Maruti. It also saw the consolidation as well as unopposed growth of
Maruti. The company enjoyed a virtual monopoly with a market-share in excess of
80%. The first few models launched by the Company viz. 800 and Omni still remain
one of the bestsellers. The period from 1996 to 2007 can be considered as the s
econd phase of the Company which also experienced the Globalization of Automobil
e Industry in India. The entry of global players in the Auto industry in India m
eant that there was a very specific need for Maruti to change and prepare to han
dle the global competition pro actively. Jagdish Khattar, Managing Director Maru
ti Suzuki often says that "We thank our competitors for creating excitement and
getting the best out of us to offer better products and services to our customer
s". This necessitated the Company to introspect, reassess and redefine its Busin
ess and Organizational Strategy. It was important for the company to come out of
its comfort zone and fight to retain its leadership position. Both the media as
well as the experts had at that time written-off Maruti as another Government e
nterprise which will succumb to the pressures of globalization. Inspite of the a
dverse business scenario and negative Industrial Relations environment in the co
mpany, the entire Maruti team regrouped and emerged as a strong and committed te
am and under the excellent leadership of Jagdish Khattar, who took over the rein
s as the Managing Director in August1999" the company has undergone a big change
both on the business as well as on the Industrial Relations perspective and eme
rged as a winner retaining 55% of the market share with a healthy and growing bo
ttom line. In 2003 Govt. of India decided to disinvest its stakes in Maruti. The
launch of Maruti's IPO which was one of the most successful in India's history,
restructured the company's Equity with 54% by Suzuki thus making Maruti a Priva
te Sector Corporate & a part of Suzuki Motor Corporation, Japan thus emerging to
be Maruti Suzuki India Ltd. That was the time that the company decided to drive
another major change initiative aimed at Organization and People Strategy.
4
Milestones
1981- Maruti Udyog Ltd. was incorporated. 1982 - Steped into a JV with SMC of Ja
pan. 1983 - Maruti 800, a 796 cc hatchback, India's first affordable car was pro
duced. 1984- Installed capacity reached 40,000 units. Omni, a 796 cc MUV was in
production. 1985 - Launch of Maruti Gypsy (970cc, 4WD off-road vehicle). 1986 -
Produced 100,000 vehicles (cumulative production). 1987 - Exported first lot of
500 cars to Hungary. 1988 - Installed capacity increased to 100,000 units. 1992
- SMC increases its stake to 50 per cent. 1994- Produced the 1 millionth vehicle
since the commencement of production. 1995 - Second plant launched, the install
ed capacity reached 200,000 units. 1996 - Launch of 24-hour emergency on-road ve
hicle service. 1997- Produced the 2 millionth vehicle since the commencement of
production. 1998 - Launch of website as part of CRM initiatives. 1999 - Launch o
f Maruti - Suzuki innovative traffic beat in Delhi and Chennai as social initiat
ives. 2000 - IDTR (Institute of Driving Training and Research) launched jointly
with Delhi government to promote safe driving habits. 2001 - Launch of customer
information centers in Hyderabad, Bangalore, and Chennai. 2002 - SMC increases i
ts stake to 54.2 per cent. Launch of Maruti Finance with 10 finance companies in
Mumbai. Start of Maruti True value in Mumbai. 2003 - Production of 4 millionth ve
hicle. Listed on BSE and NSE after a public issue oversubscribed 10 times. 2004 -
Maruti closed the financial year 2003-04 with an annual sale of 472122 units, t
he highest ever since the company began operations 20 years ago. 2005 - The fift
ieth lakh car rolls out in April, 2005. 2007 - Swift diesel launched. Manesar ma
nufacturing Plant was inaugurated in Feb 2007. 2008 - World premier of concept A
-star at 9th expo and launched in India. 2009 - Ritz has launched. 2010 - Alto K
10 launched. 2011 - Maruti Ertiga a seven seater MPV R3 designed and developed i
n India. 2014 - Maruti XA Alpha will be launched in 2014.
5
Journey Of Maruti Suzuki
Feb 1981 - The result, Maruti Suzuki India Limited (MSIL) was born in February 1
981. Maruti Suzuki started as a government company, with Suzuki as a minor partn
er, to make a people's car for middle class India. Over the years, the company's
product range has widened and ownership has changed hands. A subsidiary of Suzu
ki Motor Corporation (SMC) of Japan, the Maruti Suzuki India Limited headquarter
ed in Delhi, running with 3 vehicle assembly plants at Gurgaon and 1 vehicle ass
embly. 1983 Dec 14, 1983 - Maruti completes 25 years Maruti Suzuki recently comp
leted 25 years. On December 14, 1983, the first Maruti 800, India's iconic car,
rolled off the assembly line at the company's Gurgaon plant. Since then, Maruti
Suzuki has produced and sold around 2000 Nov 21, 2000 - Also, Suzuki is register
ed under trademark laws in various countries. They hybrid trademark 'Maruti Suzu
ki' has been used on products of the joint venture company in India. The Indore-
based World Information Pages had claimed that the word Maruti is name of an Ind
ian god. 2002 Jan 25, 2002 - The rights issue will thus witness Suzuki becoming
the largest shareholder in Maruti. In return for this, the Government will get a
renunciation premium for forgoing its portion of the rights in favor of Suzuki
as well as control premium for giving up majority control in Maruti to the Suzuk
i. 2003 May 31, 2003 - Osamu Suzuki, chairman & CEO, Suzuki Motor Corporation, s
aid: "Maruti is controlled by Suzuki and will continue to be managed by Suzuki i
n India." Responding to queries on the future control of Maruti, Suzuki said: "G
eneral Motors has a 20 per cent stake in Suzuki, Japan. 2004 May 2004 - Maruti S
uzuki's all-conquering hatchback Swift has just added another feather to its cro
wn by becoming the fastest car model to reach the 3- lakh milestone. Launched in
May 2005, the sporty car achieved this feat in only three years and eight month
s. On the occasion. 2005 June 26, 2005 - Maruti Suzuki's all-conquering hatchbac
k Swift has just added another feather to its crown by becoming the fastest car
model to reach the 3- lakh milestone. Launched in May 2005, the sporty car achie
ved this feat in only three years and eight months. 2006 Nov 13, 2006 - The form
er India bureaucrat is managing director of Maruti Suzuki, the Indian subsidiary
of Suzuki Motor, the Japanese automaker's biggest operation outside of Such are
the current competitive dynamics facing Maruti Suzuki in one of the fastestgrow
ing auto markets in the world. 2007 Dec 11, 2007 - India's rapidly expanding aut
omobile market is key for Suzuki, its chairman has often said. Maruti Suzuki, in
which Suzuki owns a 54.2% stake, is expanding its
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lineup and dealer network here. Suzuki also faces competition from global automa
kers like Toyota. 2008 Apr 25, 2008 - `The best year': Mr S. Nakanishi, Managing
Director and CEO, Maruti Suzuki India Ltd, addressing a press conference in the
Capital Announcing the results, Mr Shinzo Nakanishi, the company's Managing Dir
ector, said, "The year 2007-08 was the best year in the history of Maruti." 2009
Jul 1, 2009 - MUMBAI, July 1 (Reuters) - Maruti Suzuki, India's top car maker,
said its car sales rose 22.6 percent in June, up for the six month in a row, 'Th
is month's export numbers are the highest ever monthly export volume in the comp
any's history,' Maruti said in a statement on Wednesday. 2010 - Alto K10 launche
d. 2011 Oct, 2011 Manesar Maruti Suzuki, Indias top maker was gripped in serious
Labour unrest. During the first two days of the stand-off, MSIL dismissed five p
ermanent workers. It also
suspended 26 permanent workers and discontinued the services of another 18 train
ees. The plant has about 2,500 workers, of which 950 are regular employees. Prod
uction has been severely affected at MSILs first plant in Manesar since August 29
when the management prevented workers from entering the unit without signing a
good conduct bond after alleged sabotage and deliberate quality compromise o
n cars.
Company Vision
The leader in the Indian Automobile Industry, creating customer delight and share
holders wealth A pride of India.
Company Values
Customer Obsession Fast, Flexible and Fast Mover Innovation and Creativity Netwo
rking and Partnership Openness and Learning
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Board of Directors
Mr. R. C. Bhargava Mr.Shinz Nakanishi Mr. Manvinder Singh Banga
Chairman
Managing and CEO
Director
Director
Mr. Amal Ganguli
Mr. D. S. Brar
Mr. Keiichi Asai
Director
Director
Director & MEO(Engineering)
Mr. Osamu Suzuki
Mr. Shuji Oishi
Ms. Pallavi Shroff
Director
Director & MEO (Marketing & Sales)
Director
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Mr. Ayukawa
Kenichi
Mr. Tsuneo Ohashi
Director
Director and Managing Executive Officer (Production)
Current Scenario
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10
Company Name and Promoters
Maruti Suzuki is a private Limited company majorly holding being by Suzuki Motor
Corporation. Some contemporary believe that the company name Maruti is a Sanskrit
word referring to Hindu God Hanuman, son of Maruti, the Hindu Wind God Vayu.
Promoters
Name Suzuki Motor Corporation Life Insurance Corporation of India % of holding 5
4.21 8.79
HSBC Global Investment Funds A/C HSBC Global Investment Funds Mauritius Limited
5.9 ICICI Prudential Life Insurance Company Ltd. Bajaj Allianz Life Insurance Co
mpany Ltd. LIC of India Market Plus LIC of India Money Plus 1.72 1.45 1.37 1.19
The Master Trust Bank of Japan Ltd. A/C HSBC India A/c Equity Mother Fund 1.02 H
SBC Global Investment Funds A/C HSBC Global Investment Funds Bric Equity 0.85 Li
fe Insurance Corporation of India -Wealth Plus Total 0.8 77.3
The Maruti Suzuki India Ltd. core promoter is Suzuki Motor which has a holding o
f 54.21% in the company.
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Background of the Promoter Suzuki Motor Corporation
In 1909, Michio Suzuki (18871982) founded the Suzuki Loom Works in the small seac
oast village of Hamamatsu, Japan. Business boomed as Suzuki built weaving looms
for Japan s giant silk industry. In 1929, Michio Suzuki invented a new type of w
eaving machine, which was exported overseas. Suzuki filed as many as 120 patents
and utility model rights. The company s first 30 years focused on the developme
nt and production of these exceptionally complex machines. Despite the success o
f his looms, Suzuki realized his company had to diversify and he began to look a
t other products. Based on consumer demand, he decided that building a small car
would be the most practical new venture. The project began in 1937, and within
two years Suzuki had completed several compact prototype cars. These first Suzuk
i motor vehicles were powered by a then-innovative, liquid-cooled, four-stroke,
four-cylinder engine. It featured a cast aluminum crankcase and gearbox and gene
rated 13 horsepower (9.7 kW) from a displacement of less than 800cc. With the on
set of World War II, production plans for Suzuki s new vehicles were halted when
the government declared civilian passenger cars a "non-essential commodity." At
the conclusion of the war, Suzuki went back to producing looms. Loom production
was given a boost when the U.S. government approved the shipping of cotton to J
apan. Suzuki s fortunes brightened as orders began to increase from domestic tex
tile manufacturers. But the joy was short-lived as the cotton market collapsed i
n 1951. Faced with this colossal challenge, Suzuki s thoughts went back to motor
vehicles. After the war, the Japanese had a great need for affordable, reliable
personal transportation. A number of firms began offering "clip-on" gas-powered
engines that could be attached to the typical bicycle. Suzuki s first two-wheel
ingenuity came in the form of a motorized bicycle called, the "Power Free." Des
igned to be inexpensive and simple to build and maintain, the 1952 Power Free fe
atured a 36 cc, one horsepower, two-stroke engine. An unprecedented feature was
the double-sprocket gear system, enabling the rider to either pedal with the eng
ine assisting, pedal without engine assist, or simply disconnect the pedals and
run on engine power alone. The system was so ingenious that the patent office of
the new democratic government granted Suzuki a financial subsidy to continue re
search in motorcycle engineering, and so was born Suzuki Motor Corporation. In 1
953, Suzuki scored the first of many racing victories when the tiny 60 cc "Diamo
nd Free" won its class in the Mount Fuji Hill Climb.
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By 1954, Suzuki was producing 6,000 motorcycles per month and had officially cha
nged its name to Suzuki Motor Co., Ltd. Following the success of its first motor
cycles, Suzuki created an even more successful automobile: the 1955 Suzuki Suzul
ight. Suzuki showcased its penchant for innovation from the beginning. The Suzul
ight included front-wheel drive, four-wheel independent suspension and rack-and-
pinion steeringfeatures not common on cars until three decades later. With headqu
arters at Hamamatsu, Japan, Suzuki has steadily grown and expanded its business
across geographies. During the post WW II period, the company s Power Free mot
orized bike earned a good reputation. Post the success of its first motorized bi
ke Power Free , the company launched a 125cc motorcycle Colleda , and later la
unched its first lightweight car Suzulight that marked the start of Japan s au
tomotive revolution. Each of these products were epoch-making in their own right
as they were developed and manufactured by optimizing the most advanced technol
ogies of that period. Suzuki today offers its customers a wide range of motorcyc
les, automobiles, outboard motors and related products such as generators and mo
torized wheelchairs. Suzuki s trademark is recognized throughout the world as a
brand that offers high quality, reliable and genuine products. Suzuki stands beh
ind this global symbol with a determination to maintain this confidence in the f
uture as well, never stopping in creating such advanced valuepacked products.
Suzuki develops products for the new generation and changeable lifestyles, const
antly creating new technologies and applying them to products with affluent imag
ination. The team covers a wide range of latest advances in energy, environment,
electronics, communication, information and control applications. Financial hig
hlights for FY 2009 (1 April 2009 - 31 March 2010) Net sales 2.5 trillion (up 1.
3% y-o-y) Operating Income 80.0 billion (up 0.8% y-o-y) Net Income 30.0 billion
(up 3.8% y-o-y)
The company s consolidated profits exceeded those of the previous year with 79.4
billion of operating income (103.2% y-o-y), 93.8 billion of ordinary income (117.
8% y-o-y) and 28.9 billion of net income (105.4% y-o-y).
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Brand Portfolio and Product Strategies
Maruti Suzuki has divided its Product line into five segments as per the followi
ng table. The Cars have also been divided into its various variants depending on
the type of fuel used. Some cars have been rolled out for use with both Petrol
and Diesel. With rising prices of petrol, there is a sharp demand for Diesel-run
vehicles. Also, MSIL has two of its cars with LPG fitting too. These are vehicl
es that run on LPG. Examples are M800 and Wagon-R. Maruti Suzuki Swift comes in
both petrol and diesel variants. Given below is the product line to which variou
s automakers have their presence. The criteria for the segments are size and uti
lity.
Competitive Landscape for Passenger Vehicles in India
M A ud i B M W G Fi at Fo rd Hindu M stan. Ho nda Hyu ndai Ma ruti Suz M uki & T
at a Mot ors Preci sion Cars
Segment/ Company A1: Mini (Upto 3400 mm) A2: Compact (34014000mm) A3: Midsize (4
0014500mm) A4: Executive (45014700mm) A5: Premium (47015000mm) A6: Luxury (5001m
m & above)
MercBenz
Nis san
Sko da
Toy ota
Volks wagen
Vol vo
Passenger Cars
Utility Vehicles B1: Max Mass upto 3.5 tonnes,
14
Max <= 7
Seat
B2: Max Mass upto 3.5 tonnes, Max seats Between 7 &9 C: Max Mass upto 3.5 tonnes
, Multi Purpose Vehicles (MPVs) Van type vehicles
The above table clears that Maruti caters to huge segments of dimensions in the
passenger car segment which also gives the company to cater to the varied needs
and requirements of the customers of India. The above report has been taken from
CRISIL report.
Market Share by Segment for Passenger Vehicle Segment in India
Category Segment/Sub-Segment Manufacturer
M1 Category : Upto 8 + 1 seats (Passenger carrier) A: No. of seats including dri
ver not exceeding 6 A1: Mini- (Upto 3400 mm) Maruti Suzuki India Ltd. A2: Compac
t (3401 -4000 mm) Maruti Suzuki India Ltd. Hyundai Motor India Ltd. Tata Motors
Ltd. A3: Mid-size (4001-4500mm) Maruti Suzuki India Ltd. Honda Siel Cars India L
td Hyundai Motor India Ltd. A4: Executive (4501-4700mm) Toyota Kirloskar Motor P
vt. Ltd. Honda Siel Cars India Ltd Skoda Auto India Pvt. Ltd. 14.7% 39.6% 25.9%
24.0% 23.3% 21.9% 21.9% 18.0% 14.5% 31.4% 15.8% 13.1% 58.1% 21.3% 15.8% 57.7% 23
.9% 12.6% 100.0% 100.0%
Cumulative 2007-08 2008-09
15
A5: Premium (4701-5000mm) Honda Siel Cars India Ltd BMW India Pvt. Ltd. Mercedes
-Benz India Pvt. Ltd. Toyota Kirloskar Motor Pvt. Ltd. A6: Luxury (5001mm & abov
e) Mercedes-Benz India Pvt. Ltd. BMW India Pvt. Ltd. B: Max.Mass upto 3.5 tonnes
B1: Max Mass upto 3.5 tonnes, No. of seats including driver not exceeding 7 Mah
indra & Mahindra Ltd. Tata Motors Ltd. Toyota Kirloskar Motor Pvt. Ltd. B2: Max
Mass upto 3.5 tonnes, No. of seats including driver exceeding 7 but not exceedin
g 9 Mahindra & Mahindra Ltd. Toyota Kirloskar Motor Pvt. Ltd. Maruti Suzuki Indi
a Ltd. Tata Motors Ltd. C: Max Mass upto 3.5 tonnes, Multi Purpose Vehicles (MPV
s) - Van type vehicles Maruti Suzuki India Ltd. Tata Motors Ltd. 89.0% 11.0% 73.
1% 26.9% 44.0% 39.7% 4.4% 6.2% 42.8% 31.4% 10.4% 8.6% 49.9% 20.5% 15.5% 54.8% 18
.1% 13.9% 65.5% 34.5% 63.1% 36.9% 34.3% 13.7% 17.8% 16.0% 49.4% 16.7% 14.0% 6.2%
The above table is being taken from the data from SIAM ( Society of Indian Autom
obile Manufactures) clearly shows that Maruti brand supremacy as a portfolio in
A1 segment it is a still has a monopoly till 2009. Even Tata Motors has come up
with Nano brand with different models but still has not matched up the Maruti 80
0. In A2 segment it is the market leader with a market share of 57.7%. Maruti in
curs maximum profitability from this segment as this segment has the highest sal
es volumes. With the launch Ertiga Maruti is able to achieve the market leader w
ith market share of 31%.Omni as well as Gypsy have for long been the highest sel
ling vehicles used as multi purpose vehicles (MPV). Gypsy has always been a part
of Indian Army and Police services which has lead to huge sales figures.
16
CARS
Maruti Models A1: Mini - Maruti (Upto 3400 800 3335mm mm)
A2: Compact (34014000mm) A3: Mid-size (40014500mm) A4: Executive (45014700mm) A5
: Premium (47015000mm) A6: Luxury (5001mm & above)
UTILITY VEHICLES
Alto K10 3620mm Omni 4075mm SX4 4490mm
Estilo 3600m m Gypsy 4010 mm Kizashi 4650m m
Swift 3850m m Ertiga 4265 mm Vitara 4500m m
Wagon R 3520mm
Eeco 3675 mm
A-Star 3500m m
Alto 3495m m
Swift Desire 3995mm
B1: Max Mass upto 3.5 tonnes, Max seats <= 7 B2: Max Mass upto 3.5 tonnes, Max s
eats Between 7 & 9 C: Max Mass upto 3.5 tonnes, Multi Purpose Vehicles
Ertiga 7 Omni
8
Gypsy
Vitara
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The table above gives the various brands of Maruti Suzuki in various segments wi
th their specification. Maruti has highest number of brands catering to the A2 s
egment. It also the company catering such huge portfolio of variants with each b
rand has individual variant. Example: Maruti Alto comes Alto , Alto LX, Alto LXi
and Alto K10 variants.
Maruti Brands
Maruti 800 : Maruti Suzuki 800, the best seller till 2004. The Maruti Suzuki 800
is a very special car which is extremely close to the hearts of Indians. The ca
r had been the best seller till the year 2004. Maruti Suzuki 800 did drop some s
ales figure with the introduction of Alto. However, the car still covers a good
market share. It is a perfect family car and a very comfortable one in the class
of small cars. It is primarily a 4 seated car, including the driver. However, i
t can still accommodate 5 people. Maruti Suzuki 800 has evolved a lot with the d
ue course of time. The design was completely changed to make it more attractive
for the users. Nepal, Sri Lanka and Bangladesh are also extremely fond of the ca
r. Maruti Suzuki 800 is tagged as a car of the classic class in India. There are
several dash board messages stating that the car is one of the most wanted ones
. Users from different parts of the world have preferred the machine over other
for a very long period of time.
Estilo- Maruti launched all new Estilo. If you are wondering why I dropped Zen f
rom this car s name then let me explain. Estilo has got Wagon R s engine and cha
ssis and Suzuki MR Wagon s shape. Whatever remains is taken from Zen, well does
anything remains actually? Yes, Name! Name is taken from Zen, Zen Estilo . In e
ssence its stylish Wagon R, Japan s MR Wagon, combination of the two or anything
but Zen. It seems Maruti wants to exploit Zen brand-image hence named this car a
fter Zen.Zen Estilo has the same engine (1061cc, 64.8ps, 84Nm, 4-cylinder, 16-va
lve, MPFI F10D Petrol) under the
18
hood that is found in Maruti Wagon R. Absolutely nothing has been changed except
for the fact that this engine is much refined and is slightly better at respons
iveness and fuel economy. This simply translate into Zen Estilo is a bit faster
and more fuel economic than Wagon R . Due to highly good drivability, driving i
n city would be more fun with Zen Estilo. Electronic Power Steering (not availab
le in LX version) really helps in crowded traffic. Owning and maintaining Zen Es
tilo won t be a problem, engine is proven reliable and virtually maintenance-pro
of.
Wagon R : At first glance the Maruti Wagon R looks quite normal. Well, that is i
f you think the Wagon R s boxy looks are normal to start to start with. Frankly,
for a car that has to get around a city, I really don t care, because the Duo i
s all about LPG, and the fact that it is first factory fitted LPG car in India.
Factory-fitted means one major plus, your warranties don t get voided because of
the gas fitment. There is no denying the cars cost advantage, this is the cheap
est Maruti vehicle to run, and that in itself is a massive statement. The redesi
gn of the car hasn t just meant a fresh exterior look; it has also meant new int
erior - rotary controls on the panel and a very neat looking display with an all
new Speedo. The problem is that despite the not insignificant cost savings, you
save a rupee a kilometer on LPG over Petrol, which even makes the extra Rs 2400
0 you have to pay for the car seem worth it, the Duo just wheezes at times. And
this is despite two important facts, first LPG has more energy than CNG (that ot
her gas) and because this is a company designed car, Maruti engineers have reall
y played around with the engines tuning.
Swift : It is an assembly of style and power. The Maruti Suzuki Swift was a Japa
nese brainchild
that was meant to capture the hearts of car lovers all over the world. it is a c
ar thats aimed at many reasons - from a sporty hatchback to a comfortable family
car it has everything that is required in a modern family. There is every detail
ing for safety thats built in with dual airbags ensuring a zero impact in case of
a collision situation. An automatic climate control system provides interior co
mfort and an easy access with modern lock systems. there is a keyless system tha
t keeps you safe at all times.
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If you are looking for that perfect hatchback car that will be of space and comf
ort in addition to a sleek design of its exteriors and interiors there is one na
me to reckon Maruti Suzuki Swift. The car has a strong built body type with 5 do
ors. An engine capacity of 1197 cc with 4 cylinders and 16 valves it also is fea
tured with a multi point fuel injection. The fuel tank capacity is 43 liters. Th
e front view of the car has impressive lights and a look of strength and sustain
ability. It is also available in rich tones of color and the texture of the pain
ts somehow adds to its sturdy looks. There is a large boot space at the back wit
h luggage capacity of 368 litres. There are large size rear lights that make for
easy coverage at nights and on long drives and a wider than usual bumper too.
Alto : Maruti Suzuki Alto, a dream car for middle class families. Maruti Suzuki
Alto is said to be one of the most popular cars in India currently. It is often
known as an advanced version of the 800 model. The car is primarily a small car
which is apt for 5 people, including the driver. The fuel efficiency of the car
has managed to label a very popular tag to the car. Maruti Suzuki Alto has manag
ed to win a lot of hearts in several parts of the world. It is one of the cheape
st ones that the world has to offer. It is extremely important for all users to
give this product a try, as it is a very special one in more ways than one. The
car has a very elegant look to it, along with a very smart design. Maruti Suzuki
Alto can prove to be a dream car for most middle class families. The car is com
fortable to drive as well as to ride. It has a huge market in the Indian subcont
inent. Demand for the car is so huge, that sometimes the company fails to meet i
t. Maruti Suzuki Alto can be described as a perfect family car for mainly the mi
ddle class section of the society. The price tag attached to the car is extremel
y nominal and ensures that users from all sectors of the society can enjoy the l
uxury of a car. The external looks of the car is special in several ways. The ca
r has a moderately high back to match with a smart front. The car is capable of
giving excellent mileage results and can bring smile to the faces of the owners.
The seating arrangement of the car has been done to provide the maximum comfort
to the users. The car is small and can provide extreme smooth performance on ro
ad. Most of the drivers have stated that, the car is extremely comfortable to dr
ive. The turning radius of the car is small and thus, is perfectly suited to the
Indian roads. Parking space needed by the car is also very small as compared to
some of the other cars in the world market. Maruti Suzuki Alto is capable of ge
nerating a good top speed along with a good acceleration. Overall, the car is a
complete package and should not be missed by any user.
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Maruti Eeco: Maruti Suzuki Eeco, a new age car. When we talk of the Maruti brand
then there is sense of reputation that is attached with the people. There are l
ots to look forward to for the people and hence people can get all the major hel
p from the brand itself. It is classy, trendy and affordable and hence has a mas
s appeal among the people. The company made its first appearance in the year 198
3 and it continues to rise above and giving out some of the best featured cars t
o the public. The Maruti Suzuki Eeco is a new age car and has all necessary feat
ures to cater to and people can certainly get all the necessary features from th
is car as well. There are lots to look forward to for the people and if you are
looking for info and data then always make sure you have the best of the benefit
s. Internet can be of great help to the people and this is a feature that you ca
n embrace in order to get the best of the info.
Maruti Suzuki Grand Vitara: For those who likes to lead a grand life.Maruti Suzu
ki India limited has recently come out with a better and advanced version of the
ir grand Vitara that is more suitable to the market that exists in the Indian su
bcontinent. The Maruti Suzuki Grand Vitara is show cased all across the country.
This car is a utility vehicle that falls under the category of sports car. This
model is considered to be a strategic model amongst all the other models of the
Maruti Suzuki. Replacing the older models in the showrooms across the country t
he Maruti Suzukis new release Grand Vitara 2.4 comes packed with numerous new fea
tures adding style and elegance along with a bolder look. The amazing front look
of the sports utility car is attributed by large head lamps, that are encapsula
ted by front grille designed magnificently with horizontal slats and along with
the company logo that is located in the center region. The car comes with variou
s body colors with lower grills and a front aligned bumper. The rear view mirror
s are colored and can be easily adjusted from the inside. The car waistline cast
ing gives it a more elegant look. The glasses of the sports utility model are co
lored lightly. They can be operated without manual efforts as they have electron
ic modifications.
21
A-Star: Maruti Suzuki A-Star, certainly a class apart. When we talk of a family
car within a reasonable budget then the first thing that comes to the mind is Ma
ruti. This is a brand which over the years has dished out various types of cars
to the people and there are lots of options for the people to choose from. There
are lots of thoughts and innovations that go into the designing of the product
and many people, some of the best brains from around the world, work towards the
betterment of the brand. In India this is a brand that has seriously become pop
ular among the people because of the quality of the same. The tag line for the b
rand is indeed catchy that the ad makers have made. India comes home in a Maruti
is the latest tag line going on air for this brand of the car. It is indeed a t
rue that that Maruti Suzuki A Star along with the Suzuki has been going great gu
ns and giving out some of the best cars to the middle class Indians who are actu
ally aspiring for the effective and efficient family car.
Maruti Suzuki SX4 : The Maruti Suzuki SX4 is one of the latest offerings of seda
ns for Indian roads. It marks a coming together of powerful engineering and styl
es for the century. For the first time there has been an extremely concerted eff
ort to reach out to the millions of people who would like to experience technolo
gy with a budget restriction. This is a car that has a powerful engine with high
class interiors meant for comfort and luxury. There is a strong and stylish ext
erior design thats coupled with all the safety features needed on modern roads. T
here is a very high rate of fuel efficiency thats imperative for modern day drivi
ng. There is a design and technology that makes for easy driving and ensuring ev
ery bit of convenience for all those who are traveling even at long distances.
22
The Maruti Suzuki SX4is an embodiment of style and engineering finesse. There is
study and bold European look given to it that has a curved bonnet and flared ar
ches for the wheels. There is an elegant grill design at the front that is also
flanked by some incredible lights on both sides. The headlamps continue well int
o the sides thus providing you with the best of illumination coverage even throu
gh dark and rainy nights of driving. To make foggy winter time driving easier th
ere is also a fog lamp thats added elegantly. The rear side of the car has a stro
ng and bold look. It is equally matched with the tail lights that are affixed. Y
ou have a large boot capacity of 504 liters which makes traveling easier and giv
es you considerable space as well. You will have an unmatched driving experience
with this car as it is powered with one of the best VVT 16 valve DOHC engine. I
t has an incredible fuel efficiency and mileage apart from high powered driving.
Additionally the car is also facilitated with a 4 speed automatic transmission
that does not require a change of gear. You will have the pleasure of a hands fr
ee experience.
Maruti Suzuki Omni :Maruti Suzuki Omni, a mini van fit for rough roads. When you
talk of the affordability and style Maruti has always lived up to the expectati
on and dished out some of the sate of the art cars to the Indian public. The Mar
uti Suzuki Omni is a mini van that has been specially designed for the Indian ro
ad conditions. It was designed and made by the Maruti Suzuki, which is of course
an Indian car maker. This particular car, Maruti Suzuki Omni was released in th
e country in year, 1984, and was the second automobile released by the company a
fter Maruti 800. in the early days this particular car came with 786 cc engine a
nd had a 5 seat arrangement for the passengers. However the 8 seater car was lau
nched later and it became very apt for families or small groups to set out for a
picnic. Once the car was launched all around Indian market it took the imaginat
ion of the people straight away because of the quality and the performance and a
bove all the affordability of the same also played an important factor. If we go
by the record then we will see that Maruti Suzuki Omni is certainly one of the
highest sold cars in India. With all the necessary safety measures and well equi
pped features Maruti Suzuki Omni is certainly a multi utility vehicle for sure.
23
Maruti Suzuki Gypsy King : Own a Gypsy King; feel like a king on the road. The c
ar Maruti Gypsy is basically a four wheel drive SUV. It is based on the series v
ehicles that have a long wheelbase i.e. Suzuki Jimmy SJ40/410. The car is manufa
ctured in the country of India by the Maruti Suzuki. The model was launched in t
he market of India in the year 1985, December. That model had 970cc F10A engine
of Suzuki. The sales, however, were not that high but it was able to gain popula
rity. Maruti made an addition of an engine from the Esteem in the month of June,
1996. This new engine displaced 1.3Land made a good 65 bhp. G13BA with all alum
inum 8 valve was the new engine. This engine was combined with a new 5 speed gea
r box. This was given the codename of MG413W and was known by the name Gypsy Kin
g. So this is the story behind the Maruti Suzuki Gypsy King. The regular Gypsy t
hat had F10A engine was produced till the year of 2000. The Maruti Suzuki Gypsy
King is considered to be an Indian version of the Suzuki Jimmy. It falls among t
he best four wheelers that a person can use to travel nearly anywhere. The built
of Maruti Suzuki Gypsy King very tough and hence can take on any terrain. This
car provides not only great control but also offers the consumer good mileage. T
he vehicle is designed in a way to answer the call of wild. The 5 speed gear box
present in the vehicle allows it to have an impressive mileage on highways and
also enables the car to go at a high cruising speed. Besides providing better co
ntrol this car also has greater power and more responsiveness. This car is compa
ratively light in weight and hence it seldom does get stuck on muddy or sandy tr
acks. It is a kind of vehicle that has been designed keeping in mind the conditi
ons of the India
Maruti Suzuki Ritz : Maruti Suzuki Ritz: Stylish, clean and bold. Maruti Suzuki
India has brought in another world class rear door Splash that has been renamed
as Maruti Suzuki Ritz and this is the fifth universal model from Maruti Suzuki I
ndia having production version to some extent similar to SX4 and Swift based on
complete new platform. The car looks stylish, clean and bold having internal des
ign conspicuously deviating from the standard Maruti Suzuki feel and appearance.
The features of Maruti Suzuki Ritz include range of total new design for the ma
rket of India. Depending on the Swift type platform, the excellence of Maruti Su
zuki Ritz has its specialty in its high roofline. This enables the occupants to
seat in a comfortable manner. The mounted dash gearshift creates and on the whol
e impression and offers a comfortable position of driving for the driver enablin
g him the opportunity of gear shifting more easily. The Ritz is elegant rather t
han square type in shape, however it is resolute in respect of configurability,
roominess and functionality. Its gear lever remains in mounted position and the
drivers seat can be adjusted with height similar to the steering wheel. The suspe
nsion of Maruti Suzuki Ritz is very strong and agile in spite of the height. The
boot appears small, particularly front-to-rear, however, a large
24
compartment is there hidden beneath the false floor along with spare wheel for s
pace save concealed in another level below that. The rear seats can be folded in
a sideways movement, while for making space in connection with descending backr
est with cushion cranking forward. Surfaces in respect of the dashboard having c
olored produces a casual and youthful look in the space for the passenger airbag
and the upper portion of the tool cluster. Along with materials of top-quality
and a silver-metallic border on the main console, they create a charming fresh a
tmosphere for the occupants. A big speedometer located in the middle at the back
of the steering wheel can be viewed easily and fitted with indicator lamps arou
nd the same. A liquid crystal display of digital type is fixed in the lower part
of the speedometer and offers additional information to the driver. In comparis
on to the front seats the rear seat is little bit taller which enables all to ge
t a better view of the outside and all the seats are cozy too. Inside space is m
eant for four persons but five can be accommodated with little bit of squeezing.
Lot of storage space comprising a flip-lid box above the dashboard is there.
Generic Strategies @ Maruti
To cope up with the 5 competitive forces there are Three Generic Strategies Marut
i Suzuki has applied:
Cost Leadership
Differentiation Focus
1. To achieve cost leadership To realize economies of scale upfront capital inve
stment in state-of-the-art equipment plant is required. Maruti Suzuki has set up
two such state of art manufacturing facilities in India Gurgaon facility(300 ac
res) housing the K Engine Plant Manesar facility(600 acres)
25
2. Differentiation- creating something that is perceived industry wide as unique
. Differentiation can take many formsBrand Name- Maruti Suzuki Technology- The h
ighly fuel efficient, technologically advanced K series engines have been very w
ell appreciated by the customers for their performance Service- Best Service/hig
hest no. of service centers Dealer network- Highest Quality- Value for performan
ce 3. Focus is the moderator of the other two strategies:Cost Focus - Maruti als
o tried to offer a low price product to a small and specialized group of buyers.
This helped MUL to cut down prices just hours before TATA introduced Indica. Di
fferentiation Focus - Maruti also has a niche of premium products available at a
premium price. Maruti kizashi and Maruti Vitara provides the possibility to cha
rge a premium price for superior quality.
26
Marketing Environment
The automobile industry can be divided into the 4 categories. 1. 2. 3. 4. Passen
ger Vehicles Commercial Vehicles Three Wheelers Two Wheelers
The data gives the overview of the total domestic automobile sales in India alon
g with the sales volume of the various categories in the automobile industry fro
m the year 2004-05 to 2010-11.
Automobile Domestic Sales Trends (Number of Vehicles)
Category Passenger Vehicles Commercial Vehicles Three Wheelers Two Wheelers Gran
d Total 2004-05 1,061,572 318,430 307,862 6,209,765 7,897,629 2005-06 1,143,076
351,041 359,920 7,052,391 8,906,428 2006-07 1,379,979 467,765 403,910 7,872,334
10,123,988 2007-08 1,549,882 490,494 364,781 7,249,278 9,654,435 2008-09 1,552,7
03 384,194 349,727 7,437,619 9,724,243 2009-10 1,951,333 532,721 440,392 9,370,9
51 12,295,397 2010-11 2,520,421 676,408 526,022 11,790,305 15,513,156
Automobile Domestic Sales in Millions
16
12
8
4
0 2004-05 2005-06 2006-07 2007-08 2008-09 2009-10 2010-11
Passenger Vehicles
Two Wheelers
Three Wheelers
Commercial Vehicles
27
Domestic Market Share for 2010-11
16% 4% 4%
Passenger Vehicles Commercial Vehicles Three Wheelers
76%
Two Wheelers
Domestic Sales The cumulative growth of the Passenger Vehicles segment during Ap
ril 2007 March 2008 was 12.17 percent. Passenger Cars grew by 11.79 percent, Uti
lity Vehicles by 10.57 percent and Multi Purpose Vehicles by 21.39 percent in th
is period. The Commercial Vehicles segment grew marginally at 4.07 percent. Whil
e Medium & Heavy Commercial Vehicles declined by 1.66 percent, Light Commercial
Vehicles recorded a growth of 12.29 percent. Three Wheelers sales fell by 9.71 p
ercent with sales of Goods Carriers declining drastically by 20.49 percent and P
assenger Carriers declined by 2.13 percent during April- March 2008 compared to
the last year. Two Wheelers registered a negative growth rate of 7.92 percent du
ring this period, with motorcycles and electric two wheelers segments declining
by 11.90 percent and 44.93 percent respectively. However, Scooters and Mopeds se
gment grew by 11.64 percent and 16.63 percent respectively. Exports Automobile E
xports registered a growth of 22.30 percent during the current financial year. T
he growth was led by two wheelers segment which grew at 32.31 percent. Commercia
l vehicles and Passenger Vehicles exports grew by 19.10 percent and 9.37 percent
respectively. Exports of Three Wheeler segment has declined by 1.85 percent.
28
Market Share of Automaker in India
As per the SIAM 12/2009 report it can be inferred that Maruti is the market lead
er with a market share of 45% followed by Hyundai (16%), Tata Motors (14%) and M
ahindra and Mahindra (8%). They are majorly the foreign players in the market. T
he market share of the other small players is also given.
29
The above given the graph reflects the drop in the market share of Maruti from y
ear 2000 to 2012.This shows that the global players entering into the Indian mar
ket have eaten away the market share of Maruti. The drop has been quiet signific
ant from 55.5% in 2000 to 40.34% in 2012 year. Herfindahl index HHI Index a meas
ure of the size of firms in relation to the industry and an indicator of the amo
unt of competition among them. Named after economists Orris C. Herfindahl and Al
bert O. Hirschman, it is an economic concept widely applied in competition law,
antitrust and also technology management. It is defined as the sum of the square
s of the market shares of the largest firms within the industry, where the marke
t shares are expressed as fractions. The result is proportional to the average m
arket share, weighted by market share. As such, it can range from 0 to 1.0, movi
ng from a huge number of very small firms to a single monopolistic producer. Inc
reases in the Herfindahl index generally indicate a decrease in competition and
an increase of market power, whereas decreases indicate the opposite.
30
Manufacturer Maruti Suzuki India Hyundai Motor India Tata Motors Mahindra and Ma
hindra GM India Ford India Toyota Motor Volkswagen India BMW India Mercedes-Benz
India Audi India Total
Domestic Sales 2010-11 1,132,739 356,717 319,712 377,000 110,804 83,887 74,759 3
2,627 6,246 5,819 3,003 2,503,313
S= % Market Share 45.25% 14.25% 12.77% 15.06% 4.43% 3.35% 2.99% 1.30% 0.25% 0.23
% 0.12% 100.00%
HHI = S^2 0.2047526 0.0203057 0.0163113 0.0226805 0.0019592 0.0011229 0.0008919 0
.0001699 0.0000062 0.0000054 0.0000014 0.2682
A HHI index below 0.01 indicates a highly competitive index. A HHI index below 0
.15 indicates an un-concentrated index. A HHI index of 0.15 to 0.25 indicates mo
derate concentration. A HHI index above 0.25 indicates high concentration.
It can be clearly inferred form the HHI Index which is 0.2682 , the Passenger se
gment of automobile sector is highly concentrated with four domestic giants main
ly Maruti , Hyundai, Tata Motors, and Mahindra and Mahindra. Apart from that the
re are many foreign players who are fighting for the same pie in India.
Domestic Car Sales Model Wise from 2004 to 2010
The diagram below shows the sale figures of the various models launched in India
by different brands.
31
Domestic Car Sales Model wise 2004-10 Model Audi A4 2004/05 2006 2007 102 2008 1
,050 (All Audi models) 2009 1,658 (All Audi models) 2010 3,003 ( models) all 201
1 5,117 (JanNov, all models)
Audi A6
105 (all Audi models 05) -
300 (all Audi models)
349 (all Audi models)
111 (JanApr)
396
Audi A8
-
172
1,050 (all Audi models)
Audi Q5 Audi Q7 Audi R8 Audi TT Bentley BMW 3 Series 5 (2005) 20 na 28 946 1,075
(FY09) 1,155 2,220 Nov) (Jan8,042 (JanNov) 350 15
BMW 5 Series
-
-
822
1,352 (FY09)
1,590
2,030 Nov) series,
(Jan-
BMW 6 series, X3 and X5 BMW 7 Series
ca (X5) -
40
257 (all models) -
83
4 (6 Mar) 279 (FY09)
251
BMW X1 BMW X3, X5 and X6 16 (Jan)
32
BMW Z4 Roadster Chevrolet Aveo 5,624 1,174 (Jan)
25 746 (Feb) 364 (Jan)
Chevrolet Aveo UVA Chevrolet Beat Chevrolet Captiva
-
-
11,523
434 (Jan)
2,825 (Jan) 607 2,134 (FY09) 201 (Feb) 72 (Jan)
Chevrolet Cruze Chevrolet Forester (discontd.) 260 (20032005) 9 191 -
812 (Oct) -
686 (Jan) -
Chevrolet Magnum
Optra
na
6,058 (inc. SRV model) 22,060
1287 (JanMar)
89 (Feb)
51 (Jan)
Chevrolet Spark
-
-
7,265 (JanMar)
2,940 (Feb)
3,477 (Jan)
Chevrolet SRV Chevrolet Tavera 18 622 (2005) na 20,671 4,892 (JanMar) 945 (Feb)
1,512 (Jan)
Ferrari Fiat Grande Punto ~9,000 Nov) (Jun8,401 models Apr-Jul) (all in
Fiat Linea
-
-
-
4,512 (FY09)
~ 12,000 (JanNov)
Fiat Palio Stile
791 (0506)
1,614 (0607)
3,303
33
Fiat Petra/Adventure (discontd.) Fiat 500
454 (0506)
584 07)
(06-
-
-
-
ca 30 till Sept 2,780 (FY09) 184 (Oct)
ca 65 till Jun 10
Force Trax Ford Endeavour
1 818 (05-06)
na
7,053 2,916
51,420 (all models JanMay)
Ford Fiesta Ford Figo
ca 3 500 -
na -
22,855 58,000 Nov) (till
Ford (discontd.) Ford (discontd.)
Fusion
329
na
2,678
Ikon
24 536
na
4,797
Ford Mondeo (discontd.) Hindustan Ambassador Honda Accord
25 (0506) 12 740
0
na
8,487
3 324 (05-06)
2,728 (0607)
2,133
4,108 (FY09)
948 (Jan-Apr)
288 (Jan)
Honda Brio Honda City 37 545 (200506) 40,464 (06-07) 40,536 (incl. Marina STW) 1
6,723 18,482 Apr) (Jan4,485 (Jan)
Honda Civic
na
16,262 (06-07) 858 1,873 (06-
2,386 Apr)
(Jan-
644 (Jan)
Honda CR-V
1
3,425
501 (Jan-Mar)
76 (Jan)
34
(05-06)
07)
Honda Jazz Hyundai Accent Hyundai (discontd.) Hyundai Eon Hyundai Getz Prime 5 4
83 na 16,787 9,442 (FY09) 106,110 (FY09) 4,991 (FY09) Elantra 24 383 2 331 (2005
) na 1,683 (0607) 8,274 10 (Mar)
3,069 (Jun-Jul)
490 (Jan)
Hyundai i10
-
-
14,451 (2007) -
24,990 Mar 12) 4,940 (Oct)
(till
Hyundai i20
-
-
Hyundai Santa Fe Hyundai Santro Xing 103 301 163,838 (06-07) 506 121,163 91,466 (
FY09) 486 (FY09) 232 (Jan-Apr) 29 (Jan)
Hyundai Sonata
806 (2005) 318
577
Hyundai Terracan (discontd.) Hyundai Tucson
-
884 (MarchNov 05) na
533 (incl. Terracan)
188
50 (FY09)
13 (Jan-Apr)
Hyundai Verna
na
24,370
2,132 (Feb)
5,502 (Jan)
ICML Rhino Jaguar
-
242 (incl. Land Rover) 891 (Apr-Mar 11) incl. Land Rovers
Lamborghini
35
Land Rover
ca 30
na
~90 (2008) 51,009 55,924 (FY09) 3,000 (Apr08Feb09) 27,000 (Apr08Feb09)
242 Jaguar)
(incl.
35 (Jan)
Mahindra Bolero
-
-
Mahindra Max
-
-
-
Mahindra Scorpio
31,661 (05-06)
38,015 (06-07)
41,443
3,200 (Mar)
ca 44,000 ( 10- 11)
Mahindra Thar Mahindra XUV500 Mahindra Xylo 7,201 (FY09) 49,383 (FY09) 15,736 (F
Y09) 218,127 (FY09) ~10,500 (JanApr) 9,915 (Apr-Jul)
Maruti 800
116 262
79,245 (06-07) -
69,553
Maruti A-Star
-
-
2,784 (Jun)
2,494 (Jan)
Maruti Alto
126 223
200,000+ (Apr06Feb07) na
227,173
240,000
Maruti (discontd.) Maruti DZire
Baleno
6 521
-
-
5,658
61,952 (FY09)
8,995 incl. SX4 (Jan)
Maruti Esteem (discontd.) Maruti Grand Vitara
18 379
na
12,485
na
na
795
270 (FY09) 7,219 (FY09)
Maruti Gypsy
na
na
3,132
36
Maruti Kizashi Maruti Omni Maruti Ritz Maruti Swift 34 463 (MayNov 05) na 88,745
110,071 (FY09) 60 377 na 88,273 6,214 (Jun)
103 (Mar 11)
Maruti SX4
-
31,192
1,953 (Feb) 1,440 (FY09) 134,768 (FY09) 32,694 (FY09) 140,000 163,000 (AprMar 1
1)
Maruti Versa
4 291
na
1,456
Maruti Wagon R
79 712
na
132,727
Maruti Estilo
65 345
na
50,635 (Zen and Estilo) 1,127
Mercedes C-Class
785
883
1,765
1,607
5,109 (All models, JanNov)
6,698 (all models JanNov)
Mercedes E-Class Mercedes S-Class
825 (05) 144 (2005)
922 248
1,048 518
1,167 561
1,048 467
245 (Jan) 22 (Jan)
Mercedes CLS/SLK/SL/CLK/M
na
118
141 (incl. 80 M-class)
125 (models other than C,E and S class)
6 CBU imports(Jan)
Maybach
3 ( 04 and 05) 2 509
na
na
Mitsubishi Lancer/Cedia Mitsubishi Outlander
na
2,582
1,570 (FY09) 278 (FY09)
-
-
-
37
Mitsubishi Pajero/Montero Nissan 370Z Nissan Micra
na
na
1,676
1,814 (FY09) 4 (Jan-Aug) ~6,000 Nov) (Jul10,247 (H1) 58 (H1)
Nissan Teana
-
-
347
58 (FY09) 100 (FY09) -
207 (FY10)
179 Nov) 50 (Jul)
(Apr-
Nissan X-Trail
253 (2005) Corsa 8 369
250
173
157 (H1)
Opel (discontd) Porsche models) Premier Rio
na
-
-
-
-
(various
ca 100 (2005)
160
168
168
Mahindra Verito (Renault Logan) Mahindra Reva Renault Fluence
-
-
25,884
13,419 (FY09)
2,520 Apr)
(Feb-
555 (Jan)
290 (Jun)
Renault Koleos Rolls-Royce 5 (2005) 7 (2006) 12 (2007) 14 (2008) <10 (2009) 80 (
2010)
San Storm koda Fabia
na -
na 1,906 6,634 5,510 (JanMar) all koda models 9,257 (H1)
koda Octavia/Laura koda Rapid
9 559 (05-06)
11,433
10,944
7,459 (FY09)
3,519 (H1)
38
koda Superb
na
769
586
694 (FY09)
541 (Apr-Jun)
2,078 (H1) 1,310 (H1)
koda Yeti
Tata Aria Tata Indica 111 574 (05-06) 39 377 (05-06) 2 050 144,690 (06-07) 34,31
0 (06-07) na 21,535 (Jul-Jan 10) 4 692 (05-06) 15,816 (06-07) 19,078 25,630 (Su
mo+Safari: Apr-Jan 10) 77,000 (till12/10) 3,538 (Safari/Sumo Jan) 135,642 111,2
57 (FY09) 49,190 (FY09) 91,295 (AprJan 10) 41,724 (AprJan 10) 11,448 (Jan)
Tata Indigo/Indigo XL/Indigo CS Tata Marina Tata Nano
31,416
7,258 (Jan)
Tata Safari
Tata Sumo / Sumo Victa Tata Sumo Grande/MKII Tata Vista Tata Xenon XT
33 213 (05-06)
32,077 (06-07)
28,622
-
-
-
161 (FY09) 182 (AprJun) 44 (Apr-Jun) 120 (H1)
Toyota Camry
794 (2005)
1,001 (0607)
988
Toyota Corolla Altis
8 974 (2005)
na
6,204
9,172
4,901 (H1) 20,765 (H1)
Toyota Etios
Toyota Etios Liva
3,154
737 (Jun)
39
Toyota Fortuner
~3,100 Dec) 32 000 (2005) na 48,069 42,740
(Aug-
5,475 (H1) 25,307 (H1)
Toyota Innova
Toyota Land Cruiser 200 Toyota Land Cruiser Prado Toyota Prius Toyota (discontd.
) VW Beetle Qualis 31 759 na 162 (2005) na 141 109 (FY09)
ca 240 till Jun 10 1,566 (all VW models) 1,957 (JanAug: all VW models) 27,946 (
Vento Polo)
88 (H1)
VW Jetta
975 (H1)
VW Passat
-
-
383 (H1) and
VW Phaeton
58 (till Jun 11) 20,127 (H1) 17,555 (H1)
VW Polo
VW Touareg VW Vento
Volvo S80
-
-
ca 100 (all Volvo)
ca 90 ( all Volvo models)
Volco XC60 Volvo XC90 -
40
Competitive Landscape
BCG Matrix
Passenger Vehicle Growth Rate Number of Years Vehicles Growth (Sales Current/Sal
es Previous) 1.12311999 1.001820139 1.256732936 1.291640637 Cumulative growth in
4yrs 1.826419822 CAGR(%) 16.25% -
2006-07 1,379,979 2007-08 1,549,882 2008-09 1,552,703 2009-10 1,951,333 2010-11
2,520,421
Relative Market Share Market (%) 45.00% 16.00% Share Relative 0.356
Company Maruti Hyundai TATA Motors
14.00%
0.311
41
Compan y
Year
Sales
Incremental Growth (Sales Current/Sales Previous)
Cumulative growth in 4yrs
CAGR
200607 200708 Maruti 200809 200910 201011
635629
1.119863946
-
-
711818
1.782075708
15.54 %
722144
1.014506517
870790
1.205839832
-
-
1132739
1.300817648
-
-
200607 200708 Hyundai 200809 200910 201011
186174
1.076476844
-
-
200412
1.916040908
23.53 %
245297
1.223963635
289863
1.181681798
-
-
356717
1.230639992
-
-
42
200607 200708 Tata Motors 200809 200910 201011
228220
0.955459644
-
-
218055
1.400893874
8.79%
207512
0.951649813
260020
1.253035969
-
-
319712
1.229566956
-
-
The Tata Motors are at Dogs position and Hyundai is at Question mark position wi
th respect to the market leader (Maruti Suzuki). Dogs have low market share and
a low growth rate and thus neither generate nor consume a large amount of cash.
This can be due to the Tata Nano failure and Indica loosing market. Question mar
ks are growing rapidly and thus consume large amounts of cash, but because they
have low market shares they do not generate much cash. Hyundai has to bring new
innovation into its product and brand lines in order to keep regular cash flows.
43
Porter Five Forces
1. Bargaining power of Buyers: India is an emerging country with growing GDP of
7.74%. The countrys household income is increasing which has lead to growth in it
s markets. The rise in the population has even increased the demand needs of the
country. The divide between the rich the poor is also increasing which has attr
ibuted the foreign companies to fight for consumers in the country. With the adv
ent of many foreign companies entering into the country has lead to the variety
of options for the consumers which has lead to the decrease in the market share
of the market leader i.e. Maruti Suzuki India Ltd. which was having a market sha
re of 55.5% in 2000 which reduced to 44.1% in 2010. This also shows that the Ind
ian middle class is rising with purchasing power and changing tastes and prefere
nces. Since the market leader still has a lead of more than 25% which clearly st
ates that buying power of company is still a bit leveraged. Even the switching c
osts are very high for consumer. Hence, we can clearly infer that the Bargaining
Power of Buyers is Moderate. 2. Bargaining Power of Suppliers The industry majo
r costs are incurred in the designing and manufacturing of the metal forge and f
ittings. Almost 70% of the cost incurred in it. Since the industry is growing at
a much faster rate than the steel industry where there is derived demand. Due t
o the cheap imports of Steel from China the Indian steel industry is at bay. The
se factors determine to conclude that the industry has a lot of options to minim
ize their costs. Hence, we can clearly infer the threat bargaining power of supp
liers is LOW. 3. Threat of Substitutes The substitutes comprises of Indian Rail,
Metro and Local trains that comprise of a major mode of commuting for the masse
s in big cities. The Government as part of 10th Plan has initiated several Metro
s in Kolkata, Delhi, Bangalore and Hyderabad. The State Board buses and private
transport buses are also huge threat to the industry. The other modes of transpo
rt are the Commercial vehicles, Two Wheelers and three Wheelers which are a majo
r threat to the passenger car industry. Hence, we can clearly infer the threat o
f substitutes is HIGH.
44
4. Entry and Exit Barriers The industry is a capital intensive by nature which c
learly defines the entry and exit barriers. The Government of India has to compl
y with the European ECE regulations to keep a check on global pollution. The exi
t barriers are also capital intensive even today the Hindustan Motors whose fron
tline Brand Ambassador is a dead state of product life cycle still they are not ab
le diversify or move out of the business. Though the foreign companies have trie
d to enter India through completely knocked down units where in the components m
anufactured outside are assembled back in India, however, the business is vulner
able to the exchange rate volatility and the infrastructure lag within the count
ry. Hence, entry and exit barriers are HIGH. Competitive Rivalry
Manufacturer Maruti Suzuki India Hyundai Motor India Tata Motors Mahindra and Ma
hindra GM India Ford India Toyota Motor Volkswagen India BMW India Mercedes-Benz
India Audi India Total
Domestic Sales 2010-11 1,132,739 356,717 319,712 377,000 110,804 83,887 74,759 3
2,627 6,246 5,819 3,003 2,503,313
S= % Market Share 45.25% 14.25% 12.77% 15.06% 4.43% 3.35% 2.99% 1.30% 0.25% 0.23
% 0.12% 100.00%
HHI = S^2 0.2047526 0.0203057 0.0163113 0.0226805 0.0019592 0.0011229 0.0008919 0
.0001699 0.0000062 0.0000054 0.0000014 0.2682
45
A HHI index below 0.01 indicates a highly competitive index. A HHI index below 0
.15 indicates an unconcentrated index. A HHI index of 0.15 to 0.25 indicates mod
erate concentration. It can be clearly inferred form the HHI Index which is 0.26
82 , the Passenger segment of automobile sector is highly concentrate with four
domestic giants like (Maruti , Hyundai, Tata Motors and Mahindra and Mahindra )
and many foreign players who are fighting for the same pie in India. The overall
CAGR of the Passenger Car industry is 16.24%. The number of brands of companies
which have there presence in India is 15-20 which clearly states that there is
a oligopolistic market where in all the companies are fighting for market share.
Hence, we can clearly infer that the competitive rivalry is HIGH in this indust
ry. The final verdict is that the industry is lucrative for several big companie
s to fight for market share as the country population with its market evolving c
onstantly and as well as the GDP is growing.
Macro Environment Analysis
Political Environment Indian government auto policy aimed at promoting an integr
ated, phased and conducive growth of the Indian automotive industry. Allowing au
tomatic approval for foreign equity investment up to 100 per cent, with no minim
um investment criteria. Establish an international hub for manufacturing small,
affordable passenger cars as well as tractors and two wheelers. Ensure a balance
d transition to open trade at minimal risk to the Indian economy and local indus
try. Assist development of vehicles propelled by alternate energy sources. Layin
g emphasis on R&D activities carried out by companies in India by giving a weigh
ted tax deduction of up to 150 per cent for in-house research and R&D activities
. Plan to have a terminal life policy for CV along with incentives for replaceme
nt for such vehicles. Promoting multi-modal transportation and the implementatio
n of mass rapid transport systems.
46
Economic Environment The Indian economy has grown at 8.5 per cent per annum. The
manufacturing sector has grown at 810 per cent per annum in the last few years.
More than 90 per cent of the CV purchase is on credit. Finance availability to C
V buyers has grown in scope during the last few years. The increased enforcement
of overloading restrictions has also contributed to an increase in the number o
f CVs plying on Indian roads. Several Indian firms have partnered with global pl
ayers. While some have formed joint ventures with equity participation, others h
ave entered into technology tie-ups. Establishment of India as a Manufacturing h
ub, for mini, compact cars, OEMs, and for auto components. Social Environment Gr
owth in urbanization, 4th largest economy by PPP index. Upward migration of hous
ehold income levels. Increase in PPP, led to the increase in market share of com
pact cars. 85% of Cars are financed in India (15% in China). Cars priced below U
SD 12000 accounts for nearly 80% of the market. Vehicles priced between USD 7000
12000 form the largest segment in the passenger car market. Indian customers are
highly discerning, educated and well informed. They are price sensitive and put
a lot of emphasis on value for money. Preference for small and compact cars. Th
ey are socially acceptable, even amongst the welloff. Preference for fuel effici
ent cars with low running costs. The Tata Indica has the lowest running cost at
US 8.5 cents per mile. Technological Environment With the entry of global compan
ies into the Indian market, advanced technologies, both in product and productio
n processes have developed. With the development or evolution of alternate fuels
, hybrid cars have made entry into the market. Few global companies have setup t
heir R&D centers in India. Major global players like Audi, BMW, and Hyundai etc.
have setup their manufacturing units in India. Government initiatives regarding
tax rebates have led to global players setting up their R&D centers in India.
47
Govt. initiatives in establishing NATRIP network across the country will further
lead to enhancing R&D and technological advancements. Ecological Environment Au
tomotive regulations in India Status of Indian regulation Fully / Partially alig
ned In process of being aligned Items /Regulations to be covered Total no. of re
gulations 43 32 39 114 Physical infra structure such as roads and bridges affect
the use of automobiles. If there is good availability of roads or the roads are
smooth then it will affect the use of automobiles. Physical conditions like env
ironmental situation affect the use of automobiles. If the environment is pleasa
nt then it will lead to more use of vehicles. Technological solutions helps in i
ntegrating the supply chain, hence reduce losses and increase profitability. Wit
h the entry of global companies into the Indian market, advanced technologies, b
oth in product and production process have developed. With the development or ev
olution of alternate fuels, hybrid cars have made entry into the market. Few glo
bal companies have setup R&D center in India. Major global players like Audi, BM
W, etc. Have setup their manufacturing units in India. Legal Environment Legal p
rovision relating to environmental population by automobiles. Legal provisions r
elating to safety measures. Confirms the governments intention on harmonizing the
regulatory standards with the rest of the world. Indian government auto policy
aimed at promoting an integrated, phased and conductive growth of the Indian aut
omobile industry.
48
Establish an international hub of manufacturing small, affordable passenger cars
. Ensure a balanced transition to open trade at minimal risk to the Indian econo
my and local industry. In India the Rules and Regulations related to driving lic
ense, registration of motor vehicles, control of traffic, construction & mainten
ance of motor vehicles etc are governed by the Motor Vehicles Act 1988 (MVA) and
the Central Motor Vehicles rules 1989 (CMVR). The Ministry of Shipping, Road Tr
ansport & Highways (MoSRT&H) acts as a nodal agency for formulation and implemen
tation of various provisions of the Motor Vehicle Act and CMVR.
In order to involve all stake holders in regulation formulation, MoSRT&H has con
stituted two Committees to deliberate and advise Ministry on issues relating to
Safety and Emission Regulations, namely CMVR- Technical Standing Committee (CMVR
-TSC) Standing Committee on Implementation of Emission Legislation (SCOE) CMVR-
Technical Standing Committee (CMVR-TSC) This Committee advises MoSRT&H on variou
s technical aspects related to CMVR. This Committee has representatives from var
ious organisations namely; Ministry of Heavy Industries & Public Enterprises (Mo
HI&PE)), MoSRT&H, Bureau Indian Standards (BIS), Testing Agencies such as Automo
tive Research of India (ARAI), Vehicle Research Development & Establishment (VRD
E), Central Institute of Road Transport (CIRT), industry representatives from So
ciety of Indian Automobile Manufacturers (SIAM), Automotive Component Manufactur
ers Association (ACMA) and Tractor Manufacturers Association (TMA) and represent
atives from State Transport Departments. Major functions the Committee is:
49
o
To provide technical clarification and interpretation of the Central Motor Vehic
les Rules having technical bearing, to MoRT&H, as and when so desired. To recomm
end to the Government the International/ foreign standards which can be used in
lieu of standard notified under the CMVR permit use of components/parts/assembli
es complying with such standards. To make recommendations on any other technical
issues which have direct relevance in implementation of the Central Motor Vehic
les Rules. To make recommendations on the new safety standards of various compon
ents for notification and implementation under Central Motor Vehicles Rules. To
make recommendations on lead time for implementation of such safety standards. T
o recommend amendment of Central Motor Vehicles Rules having technical bearing k
eeping in view of Changes in automobile technologies.
o
o
o
o
o
CMVR-TSC is assisted by another Committee called the Automobile Industry Standar
ds Committee (AISC) having members from various stakeholders in drafting the tec
hnical standards related to Safety. The major functions of the committee are as
follows:
o o o o o
Preparation of new standards for automotive items related to safety. To review a
nd recommend amendments to the existing standards. Recommend adoption of such st
andards to CMVR Technical Standing Committee Recommend commissioning of testing
facilities at appropriate stages. Recommend the necessary funding of such facili
ties to the CMVR Technical Standing Committee, and Advise CMVR Technical Standin
g Committee on any other issues referred to it
o
The National Standards for Automotive Industry are prepared by Bureau of Indian
Standards (BIS). The standards formulated by AISC are also converted into Indian
Standards by BIS. The standards formulated by both BIS and AISC are considered
by CMVR-TSC for implementation.
50
Standing Committee on Implementation of Emission Legislation (SCOE) This Committ
ee deliberates the issues related to implementation of emission regulation. Majo
r functions of this Committee are
o o o
To discuss the future emission norms To recommend norms for in-use vehicles to M
oSRT&H To finalise the test procedures and the implementation strategy for emiss
ion norms Advise MoSRT&H on any issue relating to implementation of emission reg
ulations.
o
Based on the recommendations from CMVR-TSC and SCOE, MoSRT&H issues notification
for necessary amendments / modifications in the in Central Motor Vehicle Rules.
In addition, the other Ministries like Ministry of Environment & Forest (MoEF),
Ministry of Petroleum & Natural Gas (MoPNG) and Ministry of Non-conventional En
ergy Sources are also involved in formulation of regulations relating to Emissio
ns, Noise, Fuels and Alternative Fuel vehicles.
51
Strategic Pricing Analysis
The prices of the cars of MSIL have generally been set to target the Lower middl
e-class and middle class families in India. Their pricing strategy is based on t
heir continuing vision of Putting India on Four Wheels. Their prices are so design
ed as to enable people to upgrade from 2-wheelers to 4-wheelers and already 4-wh
eeler owners to upgrade to a better 4-wheeler offered by the company. In 2007, t
hough the company changed its Price strategy as it was being labeled as Low-Pric
e small-car manufacturer. They launched plans of a new Car in the Premium Car se
gment (Kizashi) to remove this label attached to the companys reputation. The fol
lowing chart shows the various Products and their Price ranges of the Cars of MS
IL in India.
The company has set its pricing in following manner given below: 1. Setting an O
bjective ( Maximum Market Share )- Maruti believes in maximizing the market shar
e as higher sales volumes will lead to the lower unit cost and higher long run p
rofit. The company is the market leader in India for last two decades.
52
2.
3. 4.
5. 6.
Determining the Demand Maruti estimates the demand curve and also the price elast
icity of demand. Based on these two principles Maruti had several times lowered
their prices when the market starts stagnating. Estimates Cost- In this industry
the companies keep account of all the costs as 75% of the cost is Raw Materials
and the industry is capital intensive by nature. Analyzing the Competitors The
company has always made price points through it can enter into the price points
of various within their own brand lines and as well as between the brand lines o
f the competitors in order the capture the maximum consumers. Pricing Methodolog
y (Value Pricing)Price Adaptations (Geographical Pricing ) Maruti has always giv
en differential pricing as per metropolitan cities. There are price differential
s Mumbai, Delhi, Kolkata and Chennai. This differential pricing is in terms of t
he product form pricing and location pricing. The company also gives allowance a
nd discounts and as well as promotional schemes.
Maruti as a market leader, MUL adopted aggressive pricing strategies. (I) Compan
y had products at various price points.
In the early 2000s when the passenger car industry was witnessing stagnant grow
th, Maruti slashed the prices of its various products, to revive the industry. K
hattar said, "We believe that Maruti Udyog should take the lead in getting the m
arket up and going once again. This is why MUL unleashed an aggressive pricing s
trategy." He called price-cut a, secondary evolution,, which would attract more
people to cars, thus, helping the overall growth of the market. In early 2000. I
n spite of the increased sales tax and higher costs due to new technology inputs
, MUL, opted price cuts. Explaining the price cuts, Khattar said, The focus was o
n offering new upgraded vehicles at a low price. However industry analysts perc
eived these price cuts as a desperate measure to revive flagging sales and regai
n market share. Maruti caters to all segments and has a product offering at all
price points. It has a car priced at Rs.1, 87,000.00 which is the lowest offer o
n road. Maruti gets 70% business from repeat buyers who earlier had owned a Maru
ti car. Their pricing strategy is to provide an option to every customer looking
for up gradation in his car. Their sole motive of having so many product offeri
ng is to be in the consideration set of every passenger car customer in India. H
ere is how every price point is covered.
53
Product line pricing Maruti pricing is based on Product line pricing as above we
can infer that the Versa brand has several price points where the brand variant
s shall provide different within a price range. Optional Feature Pricing Maruti
also provides optional feature pricing example -Maruti 800 had A/C and Non A/C v
ariants which have different price points. Thus the company caters to huge segme
nt of consumers. (II) Offering one stop shop to customers or creating different
streams.
Maruti has successfully developed different revenue streams without making huge
investments in the form of MDS, N2N, Maruti Insurance and Maruti Finance. These
help them in making the customer experience hassle free and helps building custo
mer satisfaction.
54
Maruti Finance: In a market where more than 80% of cars are financed, Maruti has
strategically entered into this and has successfully created a revenue stream f
or Maruti. This has been found to be a major driver in converting a Maruti car s
ale in certain cases. Finance is one of the major decision drivers in car purcha
se. Maruti has tied up with 8 finance companies to form a consortium. This conso
rtium comprises Citicorp Maruti, Maruti Countrywide, ICICI Bank, HDFC Bank, Kota
k Mahindra, Sundaram Finance, Bank of Punjab and IndusInd Bank Ltd.( erstwhileAs
hok Leyland Finance). Maruti Insurance : Insurance being a major concern of car
owners. Maruti has brought all car insurance needs under one roof. Maruti has ti
ed up with National Insurance Company, Bajaj Allianz, New India Assurance and Ro
yal Sundaram to bring this service for its customers. From identifying the most
suitable car coverage to virtually hassle-free claim assistance it s your dealer
who takes care of everything. Maruti Insurance is a hassle-free way for custome
rs to have their cars repaired and claims processed at any Maruti dealer worksho
p in India. True Value Initiative to capture used car market: Another significan
t development is MUL s entry into the used car market in 2001, allowing customer
s to bring their vehicle to a Maruti True Value outlet and exchange it for a n
ew car, by paying the difference. They are offered loyalty discounts in return.
This helps them retain the customer. With Maruti True Value customer has a trust
ed name to entrust in a highly unorganized market and where cheating is rampant
and the biggest concern in biggest driver of sale is trust. Maruti knows its str
ength in Indian market and has filled this gap of providing trust in Indian used
car market. Maruti has created a system where dealers pick up used cars, recond
ition them, give them a fresh warranty, and sell them again. All investments for
True Value are made by dealers. Maruti has build up a strong network of 172 sho
wrooms across the nation. The used car market has a huge potential in India. The
used car market in developed markets was 2-3 times as large as the new car mark
et. N2N: Car maintenance is a time-consuming process, especially if you own a fl
eet. Maruti s N2N Fleet Management Solutions for companies takes care of the A-Z
of automobile problems. Services include end-to-end backups/solutions across th
e vehicle s life: Leasing, Maintenance, Convenience services and Remarketing. Ma
ruti Driving School (MDS): Maruti has established this with the goal to capture
the market where there is inhibition in buying cars due to inability to drive th
e car. This brings that customer to Maruti showroom and Maruti ends up creating
a customer.
55
Brand Ambassadors
Tag Lines for various Maruti brands:
1. Maruti Suzuki - Way of Life - The theme of the pavilion symbolizes the compan
y s philosophy of constantly trying to find what the customers want and creating
products and services to delight and enrich the customers lives. The four crit
ical pillars of Way of Life namely Value, Spirited, Sporty and Straight Forwardn
ess will be showcased though the four neat zones of the pavilion. 2. Kizashi - A
Sign of Great Things to Come 3. Grand Vitara - Play it Your Way 4. DZire - The
Heart Car 5. Maruti SX4 - Men are Back 6. Maruti Swift - You re The Fuel 7. Ritz
- Live The Moment 8. A-Star - Stop @ Nothing 9. Maruti EECO - Happiness Family
Size! 10. Wagon R - For the Smarter Race 11. Maruti Gypsy -There is a Gypsy in e
veryone 12. Omni - Fits All 13. Zen Estillo - Take a Fresh View of Life 14. Alto
- Lets Go. 15. Maruti 800 - Change your Life
Brand Ambassadors
1. R Madhavan for Wagon R - South Indian actor R Madhavan, who is also quite pop
ular in Hindi cinema, was chosen as the brand ambassador of Wagon R. The company
felt that he was a true personification of the WagonR brand. Brand WagonR stand
s for being Contemporary, Pragmatic, Intelligent, Leader-like, Balanced and Cari
ng. The same attributes stand true for Madhavan as well. He would represent Wago
nRs values, strengthen the Brand further, and at the same time add youthfulness t
o the Brand. The company brought on board an ambassador whom they felt could con
nect with their target group i.e. basically urban upper middle and middle class
families. Madhavan was well known across the country and was not divided as a fa
ce of the North or the South and this was an important fact while choosing him.
Additionally, his popularity in South added to the brand s popularity in the Sou
th Indian markets.
56
After conducting a research, the company was sure that associating with a person
ality such as Madhavan will certainly reinforce the brand values of WagonR with
the TG at an all-India level. Additionally, the tie-up would give a boost to Wag
onRs KPI (Key Performance Indicators) in key Southern cities such as Bengalaru, H
yderabad, Chennai, Cochin etc. 2. Zubin Antalia for Maruti Suzuki Maruti Suzuki
contributes towards road safety through its Institute of Driving Training and Re
search (IDTR) and Maruti Driving School (MDS) initiatives and has already traine
d around 450,000 persons in safe driving in the last few years. Through the Nati
onal Road Safety Mission, the company plans to train an additional 500,000 peopl
e in safe driving in the next three years across India. Of the 500,000 people to
be trained, at least 100,000 will be people from the underprivileged section of
society, who are keen to take driving as a profession. Zubin Antalia, in the Ma
ruti Suzuki-Autocar Young Driver contest, beat 32 other competitors from across
the country and was chosen as Maruti Suzuki s ambassador for safe driving and pr
omoting road safety awareness. Through this initiative, the company wanted to en
courage a safe driving culture among the young drivers today. 3. Farhan Akhtar f
or A Star - The success of Rock On made Farhan popular among the youth. He was ch
osen as the brand ambassador of A-Star to attract his new fan following as Marut
i was the only brand which could make ample cars as the demand would be more
rocking than the supply ! 4. JohnAbraham for SX4 - John is one of the big name
s in the Bollywood circuit where advertisements are concerned. His tough image c
oupled with films like Dhoom to his credit, makes the handsome hunk an ideal mod
el for most products. Prior to this, the actor has not been associated with any
car brand but signed up for all products associated with the motor and bike indu
stry, be it bikes or lubricants. 5. Abhishek & Amitabh Bachhan for Versa - Versa
has versatile characteristics to ensure driving pleasure, easy maneuvering, spa
cious interiors, safety and flexibility. The company chose Big B as he is idoliz
ed by most Indians and is a respectful personality in Bollywood. The Bachhans to
gether epitomize the best of both worlds... just like the VERSA, which offers th
e best combination of space and car-like drivability. To be fair, the Big B magi
c did work and the ads created significant interest, drawing people into the sho
wroom. But perhaps the positioning itself was faulty as people were expecting a
larger than life car, just like the brand ambassador. As a result, Versa was re-
positioned as a family car, with the core proposition being, the joy of travelli
ng together. Due to the new positioning, Versa started doing well and witnessed
an upswing.
57
Future strategy of Maruti
FY2010-11. The GDP grew at 8.5 per cent, aided by recovery in agriculture and go
od performance in the industry and services sector. As a consequence, the domest
ic car market remained buoyant and posted a healthy growth rate of 29 per cent,
higher than 26 per cent achieved in the previous year (FY2009-10), which was sub
stantially higher than what was anticipated at the beginning of the year. Despit
e the unexpected demand for cars and the capacity limitations in the Company, we
could produce and sell 1,271,005 units, a growth of 24.8 per cent over the prev
ious year. This became possible due to higher levels of productivity and many in
novative practices at the shop floor level. The vendors, despite being taken by
surprise, also managed to support the Company in its efforts to increase product
ion. As a consequence, the Company was able to marginally improve its market sha
re. Customers continued to rate the Company best in sales and service satisfacti
on, as measured by JD Power surveys. The Company has now been rated best in serv
ice satisfaction for eleven years in a row. The Company has instituted projects
to further strengthen its market position and profitability and to build R&D cap
ability and capacity for the future. Production capacity is being enhanced with
two more plants at Manesar. Each of these plants will have an installed annual c
apacity of 250,000 cars. The Company developed in-house i-GPI (Integrated Gas Po
rt Injection) Technology and launched factory-fitted CNG variants for five of it
s models: Alto, WagonR, Eeco, Estilo and SX4. This i-GPI technology delivers hig
her fuel efficiency compared to conventional CNG cars. Besides, the loss of powe
r compared to gasoline engine cars, a shortcoming of conventional CNG technology
, is negligible in the case of i-GPI. The Company believes that once CNG availab
ility improves across the country, it could become a popular option owing to its
low cost and environment friendliness. Apart from launching new products, the C
ompany added 131 new sales outlets to reach 933 outlets in 668 cities and increa
sed its service reach to 1,395 cities with 2,946 outlets. The Companys network is
now servicing about 1.2 million vehicles every month. With increasing service l
oad, the importance of training has taken priority. The Company has initiated ti
eups
58
with 28 ITIs (Industrial Training Institutes) to enhance availability of technic
al manpower at workshops. On the environmental front, in FY2010-11 the Company m
ade improvements on its energy and water consumption at its manufacturing sites
at Gurgaon and Manesar. Emission levels at both sites were strictly monitored. T
o reduce emissions due to transportation, the Company is working on a project to
transport cars by rail.
The Company benefited from sales in both the top cities and the rural hinterland
with the help of its network reach. In the last four years, rural sales have gr
own to contribute 20 per cent of total domestic sales. About 40 per cent of the
Companys sales outlets are in the rural format, with a scaled down investment tha
t enables viability on lower volumes. Thus focusing on this segment also reaps b
enefits for longer duration for the company.
59
Maruti Suzuki India unleashed all-new XA Alpha Concept sports utility vehicle
at the Auto Expo 2012 in New Delhi. It has been developed in-house by Maruti Suz
uki s research and development team. It is expected that XA Alpha Concept SUV wi
ll transform into production vehicle by the end of 2013 and it is also expected
that it will carry most of the design and styling elements of the concept. It wi
ll be available in both petrol and diesel. The petrol variant will be powered by
K-series engine which is very fuel efficient. The diesel variant will be powere
d by Fiat s tried and tested 1.3 litre diesel engine. In terms of styling the XA
Alpha looks very muscular featuring huge alloy wheels, thick c-pillar and L-sha
ped tail lamps. It is expected that XA Alpha will replace the aging Gypsy and wi
ll compete with the likes of Ford EcoSport, Renault Duster and Premier Rio.
Profit and Loss Account (Forecasted)
1
Parameters Volumes (Nos) Domestic Export Total
2007-08
2008-09
2009-10
2010-11 1,132,739. 0 138,266.0 1,271,005. 0 404,190.0 380,057.0 24,133.0 42,908.
0
2011-12 1,313,977. 2 160,388.6 1,477,543. 3 469,870.9 440,866.1 27,994.3 64,627.
1
2012-13
870,790.0 147,575.0 1,018,365. 0 209,493. 0 dies, 30,890.0 27,269.0 19,539.0 28,
488.0 230,852. 0 318,073.0 298,534.0
1,524,213.6 186,050.7 1,717,644.1 546,224.9 511,404.7 32,473.4 74,967.4
2
3
Gross Sales Vehicles Spares, moulds Excise duty
60
4
Net sales (2-3)
178,603. 0
203,583. 0
289,585.0
361,282.0
405,243.8
436,437.3
5 6 7 8
Income from services 759.0 Total operating income Other income 8,371.0 187,733.
Total income 0 Consumption of raw materials Employee costs Manufacturing, Admin
and other costs Selling and distribution expenses Financial expenses Depreciatio
n Total expenditure PBT (8-15) Current tax Deferred tax PAT (16-17-18) 130,342.
0 3,562.0
970.0
1,404.0 290,989.0 10,243.0 301,232.0
1,715.0 362,997.0 12,227.0 375,224.0
2,250.5 452,824.1 13,872.9 466,697.0
2,953.1 564,879.7 15,740.4 580,620.1
9,985.0 214,538. 0 150,598. 0 4,711.0
9 10 11
224,134.0 5,456.0
287,943.0 7,036.0
350,022.7 8,828.2
435,465.0 11,076.8
10,793.0
15,685.0
17,972.0
29,178.0
40,646.8
56,623.6
12 13 14 15
5,602.0 5,682.0
7,382.0 7,065.0
9,160.0 335.0 8,250.0 265,307.0 35,925.0 11,230.0 -281.0 24,976.0
9,600.0 244.0 10,135.0 344,136.0 31,088.0 8,101.0 101.0 22,886.0
11,488.1 0.0 12,291.3 423,277.1 43,419.9 13,026.0 101.0 30,292.9
13,747.5 0.0 14,906.4 531,819.3 48,800.7 14,640.2 101.0 34,059.5
16 17 18 19
25,030.0 7,509.0 26.0 17,308.0
16,758.0 4,592.0 -118.0 12,187.0
Risk Factors
The Company operates in an environment which is affected by various factors some
of which are controllable while some are outside the control of the Company. Th
e activity of risk management in the Company is reviewed by the Audit Committee
through a management subcommittee, namely the Executive Risk Management Committe
e (ERMC). The ERMC consists of the Managing Director & CEO and all executive off
icers of the Company. It reviews the risk management activities on a regular bas
is in addition to scanning for any new risks that may arise due to changes in th
e business environment. While the possibility of a negative impact due to one or
more such risks cannot be totally precluded the Company proactively takes
61
reasonable steps and makes efforts to mitigate significant risks that may affect
it. Some of the risks that are potentially significant in nature and need caref
ul monitoring are listed hereunder: 1. Macroeconomic Factors 2. Preparedness of
value chain partners 3. Inappropriate product portfolio 4. Competition product l
aunches 5. Talent acquisition & retention 6. Geographic concentration 7. Changes
in government policy and legislation
Outlook
The market for passenger vehicles in India is estimated to grow to 4.5 million t
o 5 million units by 2015- 16. Although rising inflation, interest rates and cru
de oil prices are concerns in the short term, the Company is optimistic about th
e medium and long term. The Company is gearing up for growth. Initiatives to exp
and manufacturing capacity are underway. The Companys products are well received
by customers. SMCs design philosophy of aggressive and sporty cars, K-series tech
nology and the popularity of the Companys diesel car offerings augur well for the
future. To supplement this, the Company is stepping up its R&D capability to wo
rk in a unified way with SMC and offer a regular pipeline of new and refreshed m
odels. The Companys network of sales and service outlets continues to be its stre
ngth. Network is set to expand in the future, and will help tap opportunity as e
conomic prosperity widens and deepens in the country. High commodity prices and
adverse currency movements continue to be the challenges. Besides existing effor
ts to boost productivity, reduce waste and enhance value, the Company is working
on new initiatives like higher localization and hedging to reduce the impact of
commodity prices and currency. The Company is conscious that talent will be the
key to achieving the goals envisaged for the medium term. Specific initiatives
are being taken in the area of recruitment and development. The Company is worki
ng closely with suppliers and dealers to prepare them for growth as well as high
er competitive intensity.

Maruti Suzuki's Journey to Becoming India's Largest Automaker

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Maruti Suzuki's Journey to Becoming India's Largest Automaker

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2012 Maruti Suzuki India Ltd.

Ankit Singh 10BSPHH010104

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