A PROJECT REPORT ON

MARUTI SUZUKI

PRESENTED TO:

Mr. HIMANSHU VAIDYA

ON

SEPTEMBER 10, 2010

IN THE PARTIAL FULFILLMENT OF THE REQUIREMENTS FOR

THE STRATEGIC MANAGEMENT COURSE IN THE PGPM

DHIREN VYAS

Approval............

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Contents
Industry Overview.................................................................................................................................4
Current Scenario................................................................................................................................4
Overview of the four wheeler passenger car industry............................................................................4
The Maruti phase...............................................................................................................................4
Post Maruti Phase..............................................................................................................................5
Maruti Suzuki........................................................................................................................................8
About Maruti.....................................................................................................................................8
Core Competencies............................................................................................................................8
Market Segment and Target market...................................................................................................9
Product Life Cycle stages......................................................................................................................9
Strategies.............................................................................................................................................10
Key strategic initiatives by Maruti...................................................................................................10
Pricing Strategy...............................................................................................................................11
Product Differentiation....................................................................................................................11
Corporate Strategies- Stability.........................................................................................................11
Promotional Strategy.......................................................................................................................11
Corporate Social Responsibility (CSR)...........................................................................................11
Repositioning of Maruti Products....................................................................................................11
BCG Matrix.........................................................................................................................................12
GE Matrix............................................................................................................................................13
SWOT Analysis...................................................................................................................................13
PEST Analysis.....................................................................................................................................15
Competition Analysis..........................................................................................................................16
New Strategy Formulation and Implementation for MUL...................................................................19
The Future...........................................................................................................................................20
Conclusion...........................................................................................................................................21
BIBLIOGRAPHY...............................................................................................................................22

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 Industry Overview

Current Scenario

Indian Automobile Industry

Size of auto and ancillary

USD 50 billion
industry
Vehicle sold in India 2009-10
14 million
of which export 1.8 million
GDP share of auto sector 7%

People employed by industry 13 million

India’s Position in world’s auto market

(Numbers in Millions)
Global Position Domestic Sales + Export
Passenger Vehicle 7 2.4
Commercial Vehicle 4 1.1
Three Wheeler 1 0.6
Two Wheeler 2 10.5
(Source: www.businessclubindia.org)

Overview of the four wheeler passenger car industry

The passenger car industry in INDIA is mainly divided into three time frames:

1) Pre Maruti (1951-1981)

2) Maruti phase(1982-1993)
3) Post Maruti (1993 onwards)

The car industry has gone through major changes from post independence.

Maruti is considered as the benchmark in the automobile industry as it changed the way
the industry was growing and working in INDIA.

As said earlier the INDIAN automobile industry can be divided into three phases. Our
study will be on the Maruti phase and post Maruti phase in INDIA.

The Maruti phase

Maruti stated off by producing Maruti 800 in 1983. At that time there were mainly only
two players who dominated the market; Hindustan Motors and Premier automobiles.
The main strategy of Maruti they applied at that time was that they created a whole new

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market for itself. INDIAN market has always been considered very big and at that time
there were a growing number of upper middle class families in INDIA. They targeted
that market with their moderately priced car which was also high on fuel efficiency. In
fact Maruti was the first in INDIA who stated the concept of fuel efficiency in INDIA.
Thus with so much product differentiation they went on to become the market leader in
no time. They also fuelled the car market growth in INDIA.

Maruti continues to be the market leader for more than two decade s now although it
has now lost its market shares post liberalisation of the economy in 1991.

The main reason Maruti still continues to be the market leader can be attributed to the
following reasons:

It was exposed to the market for almost a decade without competition. But it did not
take it for granted. It continued to serve the market with full efficiency and credibility.
They went on built excellent customer relationships which further enhanced their trust
among customers.

Although it is criticized that they did not think beyond 800 which also not upgraded
they went on launching other models too like Maruti 1000 ZEN and Esteem to capture
other forms of market. By this mean they did become a stereo type of car manufacturer
like ambassador.

Post Maruti Phase

This phase started with the government liberalising the economy. The first to foray to
compete in this sector was Tata motors (then TELCO) with their INDICA. It failed to
make any impact as there were wide spread complaints about the car and also had high
maintenance cost. Shortly after that HYUNDAI came into picture and they captured the
market very quickly with their Santro model. The main reason why Hyundai could
capture the Maruti market here was Maruti for a long time did not change their 800
model and went on with the same look. Santro gave the consumers a break and to go for
new designs. Hyundai passed the test and went on to give excellent service.

With the success of Hyundai other car manufactures across the globe started coming to
INDIA mainly through joint ventures. At present there are more than ten players in
INDIA catering in the various segments in the industry. Examples of such players
include HYUNDAI, TOYOTA, MAHINDRA, HONDA etc.

Thus post liberalisation the market has become much more competitive and aggressive.

Where does Maruti stand now and how they overcome the competition?

With huge competition in the sector Maruti stands at par with its competitors at this
moment. Although it has lost its market share but it still continues to have more than
50% market share even though it has so many competitors.

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It has been criticised that Maruti has failed to hold the market share it held earlier when
faced with competition. But if compared the competitors there shares in the market are
not that significant individually excepting Hyundai which is enjoying around 17%
market share.(source CMIE market shares )

It is obvious that market share is expected to erode with competition but standing tall
being the leader is a big time success for Maruti. Without competition the market does
not grow and no new innovation takes place.

When competitors started pouring in Maruti was quick to react to the competition and
became more competitive and stated launching new products or re designing its old
models. They reduced the queuing periods of cars to almost nil which earlier was
around 5-6 months. It introduced new models like new 800, A-Star, Ritz, Alto, Zen
Estilo, SX4 etc. They also have launched recently the K-series engines.

It revamped its total production style and introduced the JIT concept the first of its kind
in the industry.

It further increased its network service centres which them ahead of competitors by
many miles. The company has a sales network of 802 centres in 555 towns and cities,
and provides service support to customers at 2,740 workshops in over 1,335 towns and
cities (as on March 31, 2010). As of June 2010 it currently has 800-plus dealerships
across more than 500 cities in India. It plans to expand total number of dealerships to
1,000)

To compare with Hyundai it currently has a 295 dealer network and 591 strong service
points across India, which will see further expansion in 2010.

(source: Wikipedia and marutisuzuki.com)

They also diversified themselves into second hand car business with TRUE VALUE
program which was previously catered by the unorganised sector only. Competitors
also tried to invest in this sector but they are far behind Maruti’s second hand car
business.

They also did internal structuring by Suzuki taking over more than 90% share of the
company from Maruti Udyog and consolidating its position so as to reduce government
interference. The Indian government held an initial public offering of 25% of the
company in June 2003. As of 10 May 2007, Govt. of India sold its complete share to
Indian financial institutions. With this, Govt. of India no longer has stake in Maruti
Udyog. (Source: Wikipedia)

Maruti with increased competition also concentrated on the export market and today it
exports their car to more than 100 countries. It exports doubled in 2009-10 to 147,000
units. it stands next only to Hyundai Motors which exported 240,000 cars made in India.
(Source: msn.com & hyundai.co.in)

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Indian Auto Industry is witnessing more JVs and acquisitions than ever.

Mergers, acquisitions and joint ventures have continued to be the driving force in the
Indian automobile industry in sync with the dynamics of an open market. Leading
automobile companies have either set up their own manufacturing base in India or have
tied up with Indian automotive firms to roll out new products from Indian market. The
list includes International, MAN, Daimler, Toyota, Nissan, Renault, Fiat, Honda,
Kawasaki, Cummins and many more. During the first half of 2008, Daimler AG bought
26 per cent stake in Sutlej Motors.

Indian companies have also been bullish in acquiring foreign automobile companies to
reinforce their presence in the global market. The landmark deal in the first half of 2008
has been Tata Motors’ acquisition of Jaguar-Land Rover from Ford for US$ 2.30 billion.
During this period M&M acquired three Italian companies – GR Grafica Ricerca,
Metalcastello and Engines Engineering.

Indian firms are increasingly partnering with foreign firms

India OEM Foreign Partner Type of Partnership

Maruti Suzuki Suzuki Motor Corporation-Japan Equity partner
Mahindra Logan Renault Joint Venture
Tata motors Fiat Tie-up for manufacturing and
marketing in India
KINETIC Group Sanyang Industry Co Ltd
Technology
(SYM- Taiwan)
Italjet -Italy Tie-up for manufacturing and
Distribution
Hero Honda- Japan Technology
Hero Cycles Ultra Motor Company, U.K Technology
Bajaj Auto Kawasaki Heavy Industries Ltd,
Engine Technology
Japan
Engine Technology Technology
Kubota Corp, Japan Technology
L&T Ltd Scania-Spain Tie-up for marketing in India
Ashok Leyland Hino-Japan Engine Technology
Irizar-Spain Bus body Technology
ZF-Germany Gearbox Technology
Tata Motors Marco Polo-Brazil Bus/Coach Technology
Cummins-USA Engine Technology

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 Maruti Suzuki

Sector: Four Wheeler Passenger Car Segment

Why this segment in automobile industry?

This particular sector in INDIA has been witnessing huge

growth and competition with a host of MNC’s like Honda, FORD, GM, TOYOTA, SUZUKI,

A lot of the above mentioned companies changed their strategies to form new ones to
capture the market in INDIA. Companies like GM have usually focussed on sedans in
other countries where as in INDIA they focussed on small cars. In fact they are now
planning to launch cars within 1 lakh to compete with NANO.

Also INDIA is expected to be the next destination for export of cars.

Why Maruti?

Maruti before liberalisation faced almost no competition but after market was opened it
faced huge completion. What different strategies it adopted to face the competition and
continue to be the market leader even after is interesting to know about and why did
not wash off like Hindustan Motors and Premier Padmini can be known.

About Maruti
Maruti Suzuki India Limited (MSIL, formerly named Maruti Udyog Limited) is a
subsidiary of Suzuki Motor Corporation, Japan. MSIL has been the leader of the Indian
car market for over two and a half decades. The company's two manufacturing facilities
are located at Gurgaon and Manesar, south of New Delhi. The Manesar and Gurgaon
facilities have a combined capability to produce over a million (1,000,000) passenger
car units annually.

Recently, the company has announced a further investment of Rs1700 crore (Rs 17
billion) for enhancing the production capacity by 250,000 units annually.

The company has a portfolio of 13 brands and over 150 variants including international
brands Alto, A-star, WagonR, Swift, Ritz and Estilo, off-roader Gypsy, SUV Grand Vitara,
sedans SX4 and Swift DZire and the newest entrant Eeco and Alto K-10. Its present boss
is Mr. Shinzo Nakanishi, who is the Managing Director and CEO.

Core Competencies

Our core competency lies in manufacturing small cars. Last year, the total market grew
at about 20-22 per cent, but the compact car segment grew at 30-32 per cent. But we
know how to evolve with the times. With changing times, we would like to be more
stylish and contemporary," said Mr Khattar( Ex-MD Maruti Suzuki ).

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As said in the above quote Maruti is a pioneer in small car industry in India. They are
mainly known for the small cars but over time they have changed with the market
demand and made their foray into sedans also.

Another competency of Maruti is the fuel efficiency factor that their car provides.
Although all the other car manufacturers have come up with fuel efficient engines but
none of them could actually match up with Maruti in this case.

Maruti competency lies also in the fact that they are priced very competitively. With
wide variety of portfolio of cars Maruti’s car are considered most cost efficient. Also the
after sale maintenance cost of the cars are too the cheapest in the market.

Maruti Suzuki’s yet another competency lie in the fact that the customer trust they are
having. Over the past ten years they have been awarded J.D. Power Customer
satisfaction awards one of most prestigious awards in the automobile industry.
According to the Brand Equity of Economic Times Maruti have the highest brand
recognition in the industry and is among the top 100 most trusted companies in INDIA.

Market Segment and Target market

Segment Price Range Cars

A < 3 lacs Maruti 800, Reva, Omni
B 3-5 Wagon R, Zen, Versa, Ambassdor, Fiat,
Palio, Esteem, tata indica, indigo.
C 5-10 Baleno, Elantra, Honda city, Lancer,
Innova, Sx4
D 10-15 Octivia, corolla, Civic
E 15-30 Honda CRV, Maruti Grand Vitara,
Honda accord
(Source: http://www.surfindia.com/automobile)

Product Life Cycle stages

Introduction Stage:

 Market share and growth is slight.

 Substantial research and development costs have been incurred.
 Marketing costs may be high in order to tests the market, undergo launch
promotion and set up distribution channel.
 Highly unlikely that company will make profit on products.
Example- A-star, Dezire.

Growth Stage:

 Characterised by the rapid growth in sales and profits.

 Profits arise due to an increase in output, getting benefit of economies of scale.

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  Significant promotional resources are traditionally invested in products that are
firmly in the growth stage.
 Cheaper for businesses to invest in increasing their market share.
Example- Swift, Zen Estilo.

Maturity Stage:

 Competition is more intense as companies fight to maintain their market share.

 Any significant moves are likely to be copied by competitors.
 The maturity stage is the time when most profit is earned by the market as a
whole.
 Any expenditure on research and development is likely to improve production
efficiency and quality.
Example- Alto, Wagon-R

Decline Stage:

 Market is shrinking, reducing the overall amount of profit.

 Possible to take out some production cost, to transfer production to a cheaper
facility, sell the product into other, cheaper markets.
 Depending on whether the product remains profitable, a company may decide to
end the product.
 Care should be taken to control the amount of stock s of the product.
Example- Baleno, Esteem.

Strategies

Key strategic initiatives by Maruti:

Turnaround Strategies that Maruti has followed are:

 At present have around 45% market share
 Plans to invest Rs. 1925 crore in its new plant in Manesar which will annually
increase their production capacity by 2.5 lakhs car annually with the existing
capacity of 12 lakhs car per annum. They are also going to revamp their
existing other five plants to increase production to cater the increasing
demand of cars in the market. In April-August period 2010 there sales rose
26% to 4.8 lakhs cars.( source: Economic Times)
 They are also going to infuse an additional 2500 crore in their Rajasthan R&D
plant ( source: Economic Times)
 Launch new models for different segments of the market. In its redesign plan,
Maruti, launches a new model every year, reduce production costs by
achieving 85-90% indigenization for new models.
 The company is planning to expand the number of dealerships to 1,500 by
2015.) As of June 2010 it currently has 800-plus dealerships across more
than 500 cities in India. It plans to expand total number of dealerships to
1,000) source: Wikipedia
 Shift in focus from “sell what we produce” to "marketing and customer focus".

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Pricing Strategy

It caters to all segments and has a product offering at all price points. 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 offering is to be in the consideration set of
every passenger car customer in India. Here is how every price point is covered.

Porter’s Generic Strategy:

Product Differentiation
• Performance
• Mileage
• Best match with Indian road conditions
• Less Maintenance cost
• Resale price
• After sale services

Corporate Strategies- Stability

 They are maintaining status quo due to limited environmental opportunities for
gaining competitive advantage.
 Consistent product and process development
 Strong distribution network and service station
 Heavy promotional budget
 Unique positioning for each segment

Promotional Strategy

 Maruti Driving School

 Advertisement through electronic media, Print Media, outdoor ads and web
media
 CSR programs
 Sponsorship of Rode race e.g. Maruti Raid De Himalaya
 Sponsorship of other sports like cricket, golf and polo

Corporate Social Responsibility (CSR)

 National Road Safety Mission launched - a nation-wide Social responsibility

(CSR) initiative to train 500,000 people in safe driving in three years.
 Targets reducing fresh water consumption and implement rain water harvesting.
 The company is moving towards making its entire fleet of cars green with
advanced and efficient technologies.
 Promoting energy conservation.

Repositioning of Maruti Products : At the time when it was exposed to

competition

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 Whenever Maruti’s brand grew old or its sales started dipping, it made the following
efforts in the same field.
Omni – interiors and exteriors, Omni cargo and CNG omni (Fits all).
Versa –slashed prices by decreasing engine power (The joy for travelling together).
Esteem –new look to boost sales.
Baleno –price slash from 1999 (7.2 lac) to 2003 (5.46 lacs)
WagonR –modifications in engine and sporty look (For the smarter race).
Zen –modified 4 times and special editions (Shape your world).
Maruti 800 –introduced modified accessories (Change your life).

Some recent repositioning strategies of Maruti Products:

 It removed its iconic Maruti 800 and Maruti Omni from its portfolio due
decreasing sales and to comply with the environmental norms.
 In place it positioned Alto as an alternative of Maruti 800.
 It introduced Maruti Echo in place of Maruti Omni.
 It removed its Maruti Esteem another successful brand with Swift Dzire.
 It introduced Maruti SX-4 in place of Maruti Baleno.

In both of the above cases of SX-4 and Dzire they went on to give more aggression both
on the looks and performance of the cars which will be able to take the like of Ford Icon
Honda City and the likes.
 They again introduced two hatch backs the award winning Ritz and the A-star to
give more choice to customers.
 They also launched the new look Wagon-R to increase its sales.
 They also introduced the K-series engine in their highly successful Alto model by
increasing its engine capacity to 1.1 litres.
With the complete revamp of its hatch backs segment they except to recapture the
market in which there are at least 20 brands trying to outdo each other.

BCG Matrix

Stars Question Marks

High
Business Growth  Maruti Zen  SX4
Rate  Swift  A Star
Cash Cows Dogs
Low
 Maruti 800  Omni
 Wagon-R  Versa
 Alto  Baleno
High Low

Relative Market Share

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 Market Growth Cash
Earnings Strategy Example
Share Rate Needs
High, Invest, Swift, Zen
Stars High High Stable, High Integrate,
Growing Takeover
Low, Harvest, SX4,
Questio
Low High Unstable, High Divest A star
n Marks
Growing
High, Maintain mkt Maruti 800,
Cash
High Low Stable Low dominance & Wagon-R,
Cows
Leadership Alto
Low, Harvest, Omni,
Dogs Low Low Unstable Low Divest, Versa,
Liquidate Baleno

GE Matrix

Industry Attractiveness- Size, market growth, pricing, competitive structure, industry

profitability.

Business High Medium Low

Strength
- Size Build
Protect Position Invest to Build
- Growth High Selectively
(Swift) (Alto)
- Share (A Star)
- Position Selectively Limited
- Margins Build Selectively Manage for expansion for
Medium
- Image (A star & Dezire) Earnings harvest
- People (SX4) (Baleno)
- Technology Protect and Manage for Harvest/
Low Refocus earnings Divest
(A Star) (Versa) (Omni)

SWOT Analysis

Strengths:

 Established distribution and after sales network.

• 600 New car sales outlets covering 393 cities.
• 265 ‘Maruti True Value’ outlets spread across 166 cities.
• The company has a sales network of 802 centres in 555 towns and cities, and
provides service support to customers at 2,740 workshops in over 1,335
towns and cities (as on March 31, 2010

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 • Tie up with Adani group for exporting 200,000 units through Mundra port
Gujarat

 They have good understanding of the Indian market and ability to liaison with
the government.
 They have ability to design products with differentiating features.
 Brand Image
 Experience and know how in technology.

Weaknesses:

 Lack of experience with foreign market.

 Their products facing the problem of brand cannibalization. It means their one
product is facing or suffering from another product. For example in the hatch
back segment they have as many as 5 cars which may eventually compete with
each other.
 Comparatively new to diesel cars thus needs to built its credibility in this
segment.
 People resistant to upper segment model.
 Heavy import tariff on fully built imported model.

Opportunities:

At present the industry is enjoying the growth rate of 14-17% per annum with,
domestic sales growth rate of 12.8%. The growth rate is predicted to double by 2015. As
it is seen, the total sales of passenger vehicles and multi utility vehicles in the year 2005
reached the mark of 1.06 million. The current growth rate indicates that by 2012 India
will overtake Germany and Japan in sales volume.

The Indian auto industry is likely to see a growth of 10-12 percent in sales in 2010,
according to a report by the global rating firm, Fitch.
(Source: http://www.livetips.biz)

 Increasing disposable income of people.

 Availability of a variety of vehicle models meeting diverse needs and
preferences.
 Greater affordability of vehicles.
 Easy finance schemes.
 Favourable government policies.

Threats:

According to Fitch’s report, Indian auto sector outlook, completion in the country’s auto
sector is likely to increase due to increasing penetration of global original equipments
manufacturers (OEM). India today is becoming one of the favourite destinations of
foreign auto players which is clear from the number of initiatives taken by them:

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  German car major Audi will start assembling its sport utility vehicle Audi Q5
from mid 2010. The company plans to assemble more cars locally at its
Aurangabad plant instead of importing completely built units (CBU).

 Ford India commenced commercial production of its compact car Figo, and diesel
and petrol engines at a new factory in Chennai. The Figo will be built exclusively
in India and exported to Asian countries and South Africa.

 Volkswagen has set a target to localise production in India to about 80% in 2-3
years from the current level of 50% as it seeks to offer cars at more competitive
prices.

The greatest challenge and competition would be from the Chinese automobile industry.
The Chinese automobile industry has been able to give stiff competition to India in
terms of productivity, manufacturing cost, technology. Again the present trend of excess
manufacturing capability, reduced margins put additional pressure to the industry.

PEST Analysis

Political-legal factors:

 Auto policy: before liberalization Maruti Suzuki was highly protected by the
government of INDIA, but after competitors started coming in it did loose
considerable amount of share in the market. Thus Auto Policy was a major factor
for Maruti in the time of liberalization.

 Fiscal policy: Policies such as prices of raw materials such as iron, rubber etc
interest rates of government impact the sale of cars in INDIA.

Economic Factors:

 Rising per capita income: the per capita income is on increase and this will lead
to more demand for passenger cars in future. For this cars for various segments
needs to be launched.
 Favorable demographic distribution with rising working population middle
class.
 Urbanization rising at level of 40%.
 Increasing disposable incomes in rural sector: Still few years before the rural
agriculture sector was not booming but with urban markets set to become
stagnant in near future Maruti in a pro active approach should try to capture the
rural market by introducing their low cost model in this sector.
 Greater affordability of vehicle.
 Robust production.

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Social factors

 Growth in urbanization: as life gets more complex with more urbanization need
for car have increased. It is no more considered a luxury in some cases. Thus
there is no doubt that the car market is booming and Maruti need to ofcus on the
needs and demand of the sector.
 Low interest rates translating to low financing and acquisition costs hence
greater affordability.
 85% of Cars are financed in India.
 Changing consumer preference
 Changing life style in urban India

Technological factors:

 Research and development institutions.

 Bio-fuels for commercial utilization.

Competition Analysis

Threat of new Entrants:

 The presence of sizable economies of scale in production is one of the factors

which make others to enter into the industry. For example Suzuki Motorcycle
India plans to double production capacity of its two-wheelers to 300,000 units
by the end of current fiscal year.

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  High capital is required to set up a manufacturing plant in India which is one of
the entry barriers for the new entrants.

 In automobile industry, distribution channel is a major area of concern. Market

majors like Maruti Suzuki having a strong accessibility of distribution channel
creates entry barrier for others.

 Very liberal government policies lead to attract new players to enter into the
industry.

Power of suppliers:

 In Indian automobile industry, suppliers have little or no bargaining power

because in industry huge number Original Equipment Manufacturers (OEM) are
there who supply auto components to the auto manufacturers.

 The presence of global as well as domestic suppliers leads to low bargaining

power of suppliers. And auto component industry is highly competitive. Most
automotive players are present in more than one segment.

Power of buyers:

The bargaining power of buyer is stronger in automobile industry because of following

reasons:

 Buyer switching costs to competitive brands are low.

 Increasing awareness among the consumer. Consumer is now aware regarding
the quantity and quality of the products.
 Buyers are large and having very high expectations regarding the performance,
service etc.

Threat of substitute:

In automobile industry there is very low threat from substitute products. Industry
players may threaten from hybrid and electric cars.

Industry Rivalry:
Industry rivalry is stronger in Indian Automobile industry because of following reasons:

 In industry there are so many players are there, domestic players and foreign
players. And these players are undertaking fresh actions to boost their market
standing and performance at the expense of rivals.

 Rivalry is increased because the products of foreign players like Audi and others
become standardized. So, their products are significantly differentiated from
others’.

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 Rivalry is increased because it is less costly for buyers to switch brands. In
market so many models are available at more competitive prices.

 Competition in selected segments is very high for example small and mid car
segment.

17
 New Strategy Formulation and Implementation for MUL

Maruti still now have focused on family cars and had been a high success in this
segment. But with competitors foraying into picture Maruti needs to cope up with the
growing competition to stop its slide in market share.

For this it needs to focus on the other car segments like high end sedans. In its sedan
segment Maruti is only having SX-4 and Swift Dzire which are in the price bracket of
around 6 to 8 lakhs. It can introduce cars which can compete with the likes of Hyundai
Sonata, Chevrolet Cruze and Toyota Corrolla etc.

They also need to focus on the growing MUV (multi-utility vehicle) segment. Maruti is
not having a single car in this segment except Grand Vitara which for niche market
although all the competitors are having cars in this segment. If they can introduce a car
in this segment consumers can accept it as it carries the brand name of Maruti.

The only thing that Maruti needs to concentrate it needs to do more R&D into diesel
engines before they enter the above said sectors as a little mistake can ruin their total
image.

They also need to concentrate on the growing LPG market and launch brands equipped
with LPG kits.

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 The Future

 The Indian automobile industry is expected to grow to US $ 40 billion by 2015

from the current level of US $ 7 billion in 2008. By the year 2016 the industry is
expected to contribute 10% to the nation’s GDP. The industry manufacturers will
manufacture over 11 million vehicles a year, employing more than 3 million
people.
(Source: http://www.livetips.biz)

 The greatest challenge and competition would be from the Chinese automobile
industry. The Chinese automobile industry has been able to give stiff competition
to India in terms of productivity, manufacturing cost, technology. Again the
present trend of excess manufacturing capability, reduced margins put
additional pressure on the industry.

 The global recession has had a dampener effect on the growth of the industry,
but market experts believe it is only a short term phenomenon and are confident
of the industry bouncing back.

 On the positive side, India’s strength in software sector, combined with skilled
labor and low cost of manufacturing should place it in a favorable position
globally.

 Recently Mr.Ratan Tata, Chairman (Tata Motors) created history by launching

the world’s cheapest car NANO. The car’s price is around one lakh, gaining
instant recognition in the automobile industry across the globe. It heralded the
coming to age of the India Automobile Industry.

 In the coming years INDIA is also expected the hub for export market for cars
and the process have already started with a lot of manufacturers like SUZUKI and
HYUNDAI already starting the process.

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 Conclusion

 The Indian automobile industry has flourished like never before in the recent
years. This extra-ordinary growth that the Indian automobile industry has
witnessed is a result of a two major factors namely, the improvement in the
living standards of the middle class, and an increase in their disposable incomes.

 Taking the sale trend in to account MUL sold a record number of vehicle 7,
14,842 in 2007-08 including 53,024 units of export. In 2007-08 it record a
turnover of INR 145,922 million which rose to 178,603 million in 2007-08
showing a growth of 20%.

 Maruti Suzuki controls slightly over half of the domestic car market in the
country. It designs small cars suitable for the Indian conditions as a strategy to
beat the stiff competition with the entry of global auto makers.

 The company's change in strategy and emphasis on developing effective

marketing communications began to yield results. In the J.D. Power Asia Pacific
2004 India APEAL study, WagonR and Zen were ranked first and third in the
premium compact segment; Esteem was picked as the best entry level car in the
mid-size category.

 As per the J.D. Power Asia Pacific 2005 India Customer Satisfaction study, MUL
ranked highest in customer satisfaction with after-sales service for the sixth
consecutive year.

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 BIBLIOGRAPHY

Reference Book:

Business Policy and Strategic Management by L. M. Prasad

Strategic Management by V S P Rao and V Hari Krishna

Marketing Management by Philip Kotler

Websites:

www.wikipedia.com

www.marutisuzuki.com

www.businessclubindia.org

www.surfindia.com

www.livetips.biz

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