2012 Maruti Suzuki India Ltd.

Ankit Singh 10BSPHH010104

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Maruti Suzuki India Ltd.

Table of Contents
Origin and genesis of Maruti Brand .................................................................................................................... 3 Maruti Udyog Ltd. .............................................................................................................................................. 3 Milestones ..................................................................................................................................................... 4 Journey Of Maruti Suzuki ............................................................................................................................... 5 Company Vision ............................................................................................................................................. 6 Company Values ............................................................................................................................................ 6 Board of Directors .......................................................................................................................................... 7 Current Scenario ............................................................................................................................................ 8 Company Name and Promoters .........................................................................................................................10 Promoters.....................................................................................................................................................10 Background of the 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 .....................................................................................................................................40 BCG Matrix ...................................................................................................................................................40 Porter Five Forces .........................................................................................................................................43 Macro Environment Analysis .........................................................................................................................45 Strategic Pricing Analysis ...................................................................................................................................51 Brand Ambassadors ..........................................................................................................................................55 Tag Lines for various Maruti brands: .............................................................................................................55 Brand Ambassadors ......................................................................................................................................55 Future strategy of Maruti ..................................................................................................................................57 Profit and Loss Account (Forecasted) .............................................................................................................59 Risk Factors...................................................................................................................................................60 Outlook ........................................................................................................................................................61

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Maruti Suzuki India Ltd.

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 Motor Corporation Japan with the objective of making small cars with latest technology 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 second phase of the Company which also experienced the Globalization of Automobile Industry in India. The entry of global players in the Auto industry in India meant that there was a very specific need for Maruti to change and prepare to handle the global competition pro actively. Jagdish Khattar, Managing Director Maruti 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 customers". This necessitated the Company to introspect, reassess and redefine its Business 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 enterprise which will succumb to the pressures of globalization. Inspite of the adverse business scenario and negative Industrial Relations environment in the company, the entire Maruti team regrouped and emerged as a strong and committed team and under the excellent leadership of Jagdish Khattar, who took over the reins 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 emerged as a winner retaining 55% of the market share with a healthy and growing bottom 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 Private 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.

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Maruti Suzuki India Ltd.

Milestones
1981- Maruti Udyog Ltd. was incorporated. 1982 - Steped into a JV with SMC of Japan. 1983 - Maruti 800, a 796 cc hatchback, India's first affordable car was produced. 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 installed capacity reached 200,000 units. 1996 - Launch of 24-hour emergency on-road vehicle service. 1997- Produced the 2 millionth vehicle since the commencement of production. 1998 - Launch of website as part of CRM initiatives. 1999 - Launch of Maruti - Suzuki innovative traffic beat in Delhi and Chennai as social initiatives. 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 its 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 vehicle.· 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, the highest ever since the company began operations 20 years ago. 2005 - The fiftieth lakh car rolls out in April, 2005. 2007 - Swift diesel launched. Manesar manufacturing 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 K10 launched. 2011 - Maruti Ertiga a seven seater MPV R3 designed and developed in India. 2014 - Maruti XA Alpha will be launched in 2014.

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Maruti Suzuki India Ltd.

Journey Of Maruti Suzuki
Feb 1981 - The result, Maruti Suzuki India Limited (MSIL) was born in February 1981. Maruti Suzuki started as a government company, with Suzuki as a minor partner, 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 Suzuki Motor Corporation (SMC) of Japan, the Maruti Suzuki India Limited headquartered in Delhi, running with 3 vehicle assembly plants at Gurgaon and 1 vehicle assembly. 1983 Dec 14, 1983 - Maruti completes 25 years Maruti Suzuki recently completed 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 registered under trademark laws in various countries. They hybrid trademark 'Maruti Suzuki' 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 Indian 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 Suzuki. 2003 May 31, 2003 - Osamu Suzuki, chairman & CEO, Suzuki Motor Corporation, said: "Maruti is controlled by Suzuki and will continue to be managed by Suzuki in India." Responding to queries on the future control of Maruti, Suzuki said: "General Motors has a 20 per cent stake in Suzuki, Japan. 2004 May 2004 - Maruti Suzuki's all-conquering hatchback 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 achieved this feat in only three years and eight months. On the occasion. 2005 June 26, 2005 - Maruti Suzuki's all-conquering hatchback 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 achieved this feat in only three years and eight months. 2006 Nov 13, 2006 - The former 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 fastestgrowing auto markets in the world. 2007 Dec 11, 2007 - India's rapidly expanding automobile 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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Maruti Suzuki India Ltd.

lineup and dealer network here. Suzuki also faces competition from global automakers 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 Director, 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, 'This month's export numbers are the highest ever monthly export volume in the company's history,' Maruti said in a statement on Wednesday. 2010 - Alto K10 launched. 2011 Oct, 2011 – Manesar – Maruti Suzuki, India’s top maker was gripped in serious Labour unrest. During the first two days of the stand-off, MSIL dismissed five permanent workers. It also
suspended 26 permanent workers and discontinued the services of another 18 trainees. The plant has about 2,500 workers, of which 950 are regular employees. Production has been severely affected at MSIL’s 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 on cars.

Company Vision
“The leader in the Indian Automobile Industry, creating customer delight and shareholders’ wealth A pride of India.”

Company Values
• Customer Obsession • Fast, Flexible and Fast Mover • Innovation and Creativity • Networking 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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Maruti Suzuki India Ltd.

Mr. Ayukawa

Kenichi

Mr. Tsuneo Ohashi

Director

Director and Managing Executive Officer (Production)

Current Scenario

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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 54.21 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 Company 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 HSBC Global Investment Funds A/C HSBC Global Investment Funds Bric Equity 0.85 Life 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 of 54.21% in the company.

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Maruti Suzuki India Ltd.

Background of the Promoter –“Suzuki Motor Corporation”
In 1909, Michio Suzuki (1887–1982) founded the Suzuki Loom Works in the small seacoast 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 weaving 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 development and production of these exceptionally complex machines. Despite the success of his looms, Suzuki realized his company had to diversify and he began to look at 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 Suzuki motor vehicles were powered by a then-innovative, liquid-cooled, four-stroke, four-cylinder engine. It featured a cast aluminum crankcase and gearbox and generated 13 horsepower (9.7 kW) from a displacement of less than 800cc. With the onset 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 Japan. Suzuki's fortunes brightened as orders began to increase from domestic textile manufacturers. But the joy was short-lived as the cotton market collapsed in 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." Designed to be inexpensive and simple to build and maintain, the 1952 Power Free featured 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 engine 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 research in motorcycle engineering, and so was born Suzuki Motor Corporation. In 1953, Suzuki scored the first of many racing victories when the tiny 60 cc "Diamond 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 changed its name to Suzuki Motor Co., Ltd. Following the success of its first motorcycles, Suzuki created an even more successful automobile: the 1955 Suzuki Suzulight. Suzuki showcased its penchant for innovation from the beginning. The Suzulight included front-wheel drive, four-wheel independent suspension and rack-and-pinion steering—features not common on cars until three decades later. With headquarters at Hamamatsu, Japan, Suzuki has steadily grown and expanded its business across geographies. During the post WW II period, the company's 'Power Free' motorized bike earned a good reputation. Post the success of its first motorized bike 'Power Free', the company launched a 125cc motorcycle 'Colleda', and later launched its first lightweight car 'Suzulight' that marked the start of Japan's automotive revolution. Each of these products were epoch-making in their own right as they were developed and manufactured by optimizing the most advanced technologies of that period. Suzuki today offers its customers a wide range of motorcycles, automobiles, outboard motors and related products such as generators and motorized wheelchairs. Suzuki's trademark is recognized throughout the world as a brand that offers high quality, reliable and genuine products. Suzuki stands behind this global symbol with a determination to maintain this confidence in the future as well, never stopping in creating such advanced 'valuepacked' products. Suzuki develops products for the new generation and changeable lifestyles, constantly creating new technologies and applying them to products with affluent imagination. The team covers a wide range of latest advances in energy, environment, electronics, communication, information and control applications. Financial highlights 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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Maruti Suzuki India Ltd.

Brand Portfolio and Product Strategies
Maruti Suzuki has divided its Product line into five segments as per the following 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 vehicles 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 various automakers have their presence. The criteria for the segments are size and utility.

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 & Tat a Mot ors Preci sion Cars

Segment/ Company A1: Mini (Upto 3400 mm) A2: Compact (34014000mm) A3: Midsize (40014500mm) A4: Executive (45014700mm) A5: Premium (47015000mm) A6: Luxury (5001mm & above)

MercBenz

Nis san

Sko da

Toy ota

Volks wagen

Vol vo

Passenger Cars

Utility Vehicles B1: Max Mass upto 3.5 tonnes,

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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 driver not exceeding 6 A1: Mini- (Upto 3400 mm) Maruti Suzuki India Ltd. A2: Compact (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 Ltd Hyundai Motor India Ltd. A4: Executive (4501-4700mm) Toyota Kirloskar Motor Pvt. 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

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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 & above) 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 Mahindra & 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 exceeding 9 Mahindra & Mahindra Ltd. Toyota Kirloskar Motor Pvt. Ltd. Maruti Suzuki India Ltd. Tata Motors Ltd. C: Max Mass upto 3.5 tonnes, Multi Purpose Vehicles (MPVs) - 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 Automobile 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 800. In A2 segment it is the market leader with a market share of 57.7%. Maruti incurs maximum profitability from this segment as this segment has the highest sales volumes. With the launch Ertiga Maruti is able to achieve the market leader with market share of 31%.Omni as well as Gypsy have for long been the highest selling 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.

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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 seats Between 7 & 9 C: Max Mass upto 3.5 tonnes, Multi Purpose Vehicles

Ertiga 7 Omni

8

Gypsy

Vitara

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Maruti Suzuki India Ltd.

The table above gives the various brands of Maruti Suzuki in various segments with their specification. Maruti has highest number of brands catering to the A2 segment. It also the company catering such huge portfolio of variants with each brand 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 car had been the best seller till the year 2004. Maruti Suzuki 800 did drop some sales 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, it can still accommodate 5 people. Maruti Suzuki 800 has evolved a lot with the due 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 car. 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 from this car's name then let me explain. Estilo has got Wagon R's engine and chassis 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 essence it’s 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 after Zen.Zen Estilo has the same engine (1061cc, 64.8ps, 84Nm, 4-cylinder, 16-valve, MPFI F10D Petrol) under the

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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 responsiveness 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 in city would be more fun with Zen Estilo. Electronic Power Steering (not available in LX version) really helps in crowded traffic. Owning and maintaining Zen Estilo won't be a problem, engine is proven reliable and virtually maintenance-proof.

Wagon R : At first glance the Maruti Wagon R looks quite normal. Well, that is if 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 is 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 cheapest Maruti vehicle to run, and that in itself is a massive statement. The redesign of the car hasn't just meant a fresh exterior look; it has also meant new interior - 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 24000 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 other gas) and because this is a company designed car, Maruti engineers have really played around with the engines tuning.

Swift : It is an assembly of style and power. The Maruti Suzuki Swift was a Japanese brainchild

that was meant to capture the hearts of car lovers all over the world. it is a car that’s 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 detailing for safety that’s built in with dual airbags ensuring a zero impact in case of a collision situation. An automatic climate control system provides interior comfort and an easy access with modern lock systems. there is a keyless system that 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 comfort in addition to a sleek design of its exteriors and interiors there is one name to reckon – Maruti Suzuki Swift. The car has a strong built body type with 5 doors. An engine capacity of 1197 cc with 4 cylinders and 16 valves it also is featured with a multi point fuel injection. The fuel tank capacity is 43 liters. The front view of the car has impressive lights and a look of strength and sustainability. It is also available in rich tones of color and the texture of the paints somehow adds to its sturdy looks. There is a large boot space at the back with 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 managed to win a lot of hearts in several parts of the world. It is one of the cheapest 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 comfortable to drive as well as to ride. It has a huge market in the Indian subcontinent. Demand for the car is so huge, that sometimes the company fails to meet it. Maruti Suzuki Alto can be described as a perfect family car for mainly the middle class section of the society. The price tag attached to the car is extremely nominal and ensures that users from all sectors of the society can enjoy the luxury of a car. The external looks of the car is special in several ways. The car 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 road. Most of the drivers have stated that, the car is extremely comfortable to drive. 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 generating 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 Suzuki India Ltd.

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 lots to look forward to for the people and hence people can get all the major help from the brand itself. It is classy, trendy and affordable and hence has a mass appeal among the people. The company made its first appearance in the year 1983 and it continues to rise above and giving out some of the best featured cars to the public. The Maruti Suzuki Eeco is a new age car and has all necessary features to cater to and people can certainly get all the necessary features from this 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 benefits. Internet can be of great help to the people and this is a feature that you can embrace in order to get the best of the info.

Maruti Suzuki Grand Vitara: For those who likes to lead a grand life.Maruti Suzuki India limited has recently come out with a better and advanced version of their grand Vitara that is more suitable to the market that exists in the Indian subcontinent. 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 the Maruti Suzuki’s new release Grand Vitara 2.4 comes packed with numerous new features 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 encapsulated 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 various body colors with lower grills and a front aligned bumper. The rear view mirrors are colored and can be easily adjusted from the inside. The car waistline casting gives it a more elegant look. The glasses of the sports utility model are colored lightly. They can be operated without manual efforts as they have electronic modifications.

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Maruti Suzuki India Ltd.

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 Maruti. 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 popular among the people because of the quality of the same. The tag line for the brand 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 true that that Maruti Suzuki A Star along with the Suzuki has been going great guns and giving out some of the best cars to the middle class Indians who are actually aspiring for the effective and efficient family car.

Maruti Suzuki SX4 : The Maruti Suzuki SX4 is one of the latest offerings of sedans for Indian roads. It marks a coming together of powerful engineering and styles for the century. For the first time there has been an extremely concerted effort to reach out to the millions of people who would like to experience technology 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 exterior design that’s coupled with all the safety features needed on modern roads. There is a very high rate of fuel efficiency that’s imperative for modern day driving. There is a design and technology that makes for easy driving and ensuring every bit of convenience for all those who are traveling even at long distances.

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Maruti Suzuki India Ltd.

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 arches 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 into the sides thus providing you with the best of illumination coverage even through dark and rainy nights of driving. To make foggy winter time driving easier there is also a fog lamp that’s added elegantly. The rear side of the car has a strong and bold look. It is equally matched with the tail lights that are affixed. You have a large boot capacity of 504 liters which makes traveling easier and gives 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. It 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 free 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 expectation and dished out some of the sate of the art cars to the Indian public. The Maruti Suzuki Omni is a mini van that has been specially designed for the Indian road 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 the country in year, 1984, and was the second automobile released by the company after Maruti 800. in the early days this particular car came with 786 cc engine and had a 5 seat arrangement for the passengers. However the 8 seater car was launched 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 imagination of the people straight away because of the quality and the performance and above 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 equipped features Maruti Suzuki Omni is certainly a multi utility vehicle for sure.

23

Maruti Suzuki India Ltd.

Maruti Suzuki Gypsy King : Own a Gypsy King; feel like a king on the road. The car Maruti Gypsy is basically a four – wheel drive SUV. It is based on the series vehicles that have a long wheelbase i.e. Suzuki Jimmy SJ40/410. The car is manufactured in the country of India by the Maruti Suzuki. The model was launched in the 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 popularity. 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 aluminum 8 – valve was the new engine. This engine was combined with a new 5 – speed gear box. This was given the codename of MG413W and was known by the name Gypsy King. So this is the story behind the Maruti Suzuki Gypsy King. The regular Gypsy that 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 the 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. The 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 control this car also has greater power and more responsiveness. This car is comparatively light in weight and hence it seldom does get stuck on muddy or sandy tracks. It is a kind of vehicle that has been designed keeping in mind the conditions 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 India 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 design conspicuously deviating from the standard Maruti Suzuki feel and appearance. The features of Maruti Suzuki Ritz include range of total new design for the market of India. Depending on the Swift type platform, the excellence of Maruti Suzuki 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 whole impression and offers a comfortable position of driving for the driver enabling him the opportunity of gear shifting more easily. The Ritz is elegant rather than square type in shape, however it is resolute in respect of configurability, roominess and functionality. Its gear lever remains in mounted position and the driver’s seat can be adjusted with height similar to the steering wheel. The suspension 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

Maruti Suzuki India Ltd.

compartment is there hidden beneath the false floor along with spare wheel for space 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 backrest with cushion cranking forward. Surfaces in respect of the dashboard having colored 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 atmosphere 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 around 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 comparison to the front seats the rear seat is little bit taller which enables all to get a better view of the outside and all the seats are cozy too. Inside space is meant 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 Maruti Suzuki has applied:

Cost Leadership

Differentiation Focus

1. To achieve cost leadership – To realize economies of scale upfront capital investment 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 acres) housing the ‘K’ Engine Plant Manesar facility(600 acres)

25

Maruti Suzuki India Ltd.

2. Differentiation- creating something that is perceived industry wide as unique. Differentiation can take many formsBrand Name- Maruti Suzuki Technology- The highly fuel efficient, technologically advanced K series engines have been very well appreciated by the customers for their performance Service- Best Service/highest no. of service centers Dealer network- Highest Quality- Value for performance 3. Focus is the moderator of the other two strategies:Cost Focus - Maruti also 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. Differentiation Focus - Maruti also has a niche of premium products available at a premium price. Maruti kizashi and Maruti Vitara provides the possibility to charge a premium price for superior quality.

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Maruti Suzuki India Ltd.

Marketing Environment
The automobile industry can be divided into the 4 categories. 1. 2. 3. 4. Passenger Vehicles Commercial Vehicles Three Wheelers Two Wheelers

The data gives the overview of the total domestic automobile sales in India along with the sales volume of the various categories in the automobile industry from the year 2004-05 to 2010-11.

Automobile Domestic Sales Trends (Number of Vehicles)
Category Passenger Vehicles Commercial Vehicles Three Wheelers Two Wheelers Grand 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 1,552,703 384,194 349,727 7,437,619 9,724,243 2009-10 1,951,333 532,721 440,392 9,370,951 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

Maruti Suzuki India Ltd.

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 April 2007 – March 2008 was 12.17 percent. Passenger Cars grew by 11.79 percent, Utility Vehicles by 10.57 percent and Multi Purpose Vehicles by 21.39 percent in this period. The Commercial Vehicles segment grew marginally at 4.07 percent. While 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 percent with sales of Goods Carriers declining drastically by 20.49 percent and Passenger 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 during this period, with motorcycles and electric two wheelers segments declining by 11.90 percent and 44.93 percent respectively. However, Scooters and Mopeds segment grew by 11.64 percent and 16.63 percent respectively. Exports Automobile Exports registered a growth of 22.30 percent during the current financial year. The growth was led by two wheelers segment which grew at 32.31 percent. Commercial 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

Maruti Suzuki India Ltd.

Market Share of Automaker in India

As per the SIAM 12/2009 report it can be inferred that Maruti is the market leader with a market share of 45% followed by Hyundai (16%), Tata Motors (14%) and Mahindra and Mahindra (8%). They are majorly the foreign players in the market. The market share of the other small players is also given.

29

Maruti Suzuki India Ltd.

The above given the graph reflects the drop in the market share of Maruti from year 2000 to 2012.This shows that the global players entering into the Indian market have eaten away the market share of Maruti. The drop has been quiet significant from 55.5% in 2000 to 40.34% in 2012 year. Herfindahl index HHI Index a measure of the size of firms in relation to the industry and an indicator of the amount of competition among them. Named after economists Orris C. Herfindahl and Albert 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 squares of the market shares of the largest firms within the industry, where the market shares are expressed as fractions. The result is proportional to the average market share, weighted by market share. As such, it can range from 0 to 1.0, moving from a huge number of very small firms to a single monopolistic producer. Increases in the Herfindahl index generally indicate a decrease in competition and an increase of market power, whereas decreases indicate the opposite.

30

Maruti Suzuki India Ltd.

Manufacturer Maruti Suzuki India Hyundai Motor India Tata Motors Mahindra and Mahindra 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 32,627 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 moderate 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 segment of automobile sector is highly concentrated with four domestic giants mainly Maruti , Hyundai, Tata Motors, and Mahindra and Mahindra. Apart from that there 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

Maruti Suzuki India Ltd.

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 2011 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

Maruti Suzuki India Ltd.

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

Maruti Suzuki India Ltd.

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

329²

na

2,678

Ikon

24 536

na

4,797

Ford Mondeo (discontd.) Hindustan Ambassador Honda Accord

25² (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) 16,723 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

Maruti Suzuki India Ltd.

(05-06)

07)

Honda Jazz Hyundai Accent Hyundai (discontd.) Hyundai Eon Hyundai Getz Prime 5 483 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 301² 163,838 (06-07) 506 121,163 91,466 (FY09) 486 (FY09) 232 (Jan-Apr) 29 (Jan)

Hyundai Sonata

806 (2005) 318³

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

Maruti Suzuki India Ltd.

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 (FY09) 218,127 (FY09) ~10,500 (JanApr) 9,915 (Apr-Jul)

Maruti 800

116 262²

79,245 (06-07) -

69,553

Maruti A-Star

-

-

2,784 (Jun)

2,494 (Jan)

Maruti Alto

126 223²

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 Suzuki India Ltd.

Maruti Kizashi Maruti Omni Maruti Ritz Maruti Swift 34 463 (MayNov 05) na 88,745 110,071 (FY09) 60 377² 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 '11)

Maruti Versa

4 291³

na

1,456

Maruti Wagon R

79 712²

na

132,727

Maruti Estilo

65 345²

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

Maruti Suzuki India Ltd.

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 Škoda Fabia

na -

na 1,906 6,634 5,510 (JanMar) all Škoda models 9,257 (H1)

Škoda Octavia/Laura Škoda Rapid

9 559 (05-06)

11,433

10,944

7,459 (FY09)

3,519 (H1)

38

Maruti Suzuki India Ltd.

Škoda Superb

na

769

586

694 (FY09)

541 (Apr-Jun)

2,078 (H1) 1,310 (H1)

Škoda Yeti

Tata Aria Tata Indica 111 574 (05-06) 39 377 (05-06) 2 050 144,690 (06-07) 34,310 (06-07) na 21,535 (Jul-Jan '10) 4 692 (05-06) 15,816 (06-07) 19,078 25,630 (Sumo+Safari: Apr-Jan '10) 77,000 (till12/10) 3,538 (Safari/Sumo Jan) 135,642 111,257 (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)

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Maruti Suzuki India Ltd.

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 759² 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

Maruti Suzuki India Ltd.

Competitive Landscape
BCG Matrix

Passenger Vehicle Growth Rate Number of Years Vehicles Growth (Sales Current/Sales 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

Maruti Suzuki India Ltd.

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

Maruti Suzuki India Ltd.

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 with 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 marks 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

Maruti Suzuki India Ltd.

Porter Five Forces
1. Bargaining power of Buyers: India is an emerging country with growing GDP of 7.74%. The country’s household income is increasing which has lead to growth in its 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 attributed the foreign companies to fight for consumers in the country. With the advent 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 share of 55.5% in 2000 which reduced to 44.1% in 2010. This also shows that the Indian middle class is rising with purchasing power and changing tastes and preferences. Since the market leader still has a lead of more than 25% which clearly states that buying power of company is still a bit leveraged. Even the switching costs 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 major costs are incurred in the designing and manufacturing of the metal forge and fittings. 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 to the cheap imports of Steel from China the Indian steel industry is at bay. These factors determine to conclude that the industry has a lot of options to minimize their costs. Hence, we can clearly infer the threat bargaining power of suppliers 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 masses in big cities. The Government as part of 10th Plan has initiated several Metros 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 transport are the Commercial vehicles, Two Wheelers and three Wheelers which are a major threat to the passenger car industry. Hence, we can clearly infer the threat of substitutes is HIGH.

44

Maruti Suzuki India Ltd.

4. Entry and Exit Barriers The industry is a capital intensive by nature which clearly defines the entry and exit barriers. The Government of India has to comply with the European ECE regulations to keep a check on global pollution. The exit barriers are also capital intensive even today the Hindustan Motors whose frontline Brand “Ambassador” is a dead state of product life cycle still they are not able diversify or move out of the business. Though the foreign companies have tried to enter India through completely knocked down units where in the components manufactured outside are assembled back in India, however, the business is vulnerable to the exchange rate volatility and the infrastructure lag within the country. Hence, entry and exit barriers are HIGH. Competitive Rivalry

Manufacturer Maruti Suzuki India Hyundai Motor India Tata Motors Mahindra and Mahindra 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 32,627 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

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Maruti Suzuki India Ltd.

 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 moderate concentration. It can be clearly inferred form the HHI Index which is 0.2682 , 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 industry. The final verdict is that the industry is lucrative for several big companies to fight for market share as the country population with its market evolving constantly and as well as the GDP is growing.

Macro Environment Analysis
Political Environment • Indian government auto policy aimed at promoting an integrated, phased and conducive growth of the Indian automotive industry. • Allowing automatic approval for foreign equity investment up to 100 per cent, with no minimum investment criteria. • Establish an international hub for manufacturing small, affordable passenger cars as well as tractors and two wheelers. • Ensure a balanced transition to open trade at minimal risk to the Indian economy and local industry. • Assist development of vehicles propelled by alternate energy sources. • Laying emphasis on R&D activities carried out by companies in India by giving a weighted 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 replacement for such vehicles. • Promoting multi-modal transportation and the implementation of mass rapid transport systems.

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Maruti Suzuki India Ltd.

Economic Environment • The Indian economy has grown at 8.5 per cent per annum. • The manufacturing sector has grown at 8–10 per cent per annum in the last few years. • More than 90 per cent of the CV purchase is on credit. • Finance availability to CV 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 of CVs plying on Indian roads. • Several Indian firms have partnered with global players. While some have formed joint ventures with equity participation, others have entered into technology tie-ups. • Establishment of India as a Manufacturing hub, for mini, compact cars, OEMs, and for auto components. Social Environment • Growth in urbanization, 4th largest economy by PPP index. • Upward migration of household income levels. • Increase in PPP, led to the increase in market share of compact cars. • 85% of Cars are financed in India (15% in China). • Cars priced below USD 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. They are socially acceptable, even amongst the welloff. • Preference for fuel efficient 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 companies into the Indian market, advanced technologies, both in product and production processes have developed. • With the development or evolution of alternate fuels, hybrid cars have made entry into the market. • Few global companies have setup their 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.

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Maruti Suzuki India Ltd.

• Govt. initiatives in establishing NATRIP network across the country will further lead to enhancing R&D and technological advancements. Ecological Environment Automotive regulations in India Status of Indian regulation Fully / Partially aligned In process of being aligned Items /Regulations to be covered Total no. of regulations 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 environmental situation affect the use of automobiles. If the environment is pleasant then it will lead to more use of vehicles. Technological solutions helps in integrating the supply chain, hence reduce losses and increase profitability. With the entry of global companies into the Indian market, advanced technologies, both in product and production process have developed. With the development or evolution of alternate fuels, hybrid cars have made entry into the market. Few global companies have setup R&D center in India. Major global players like Audi, BMW, etc. Have setup their manufacturing units in India. Legal Environment Legal provision relating to environmental population by automobiles. Legal provisions relating to safety measures. Confirms the government’s 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 automobile industry.

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Maruti Suzuki India Ltd.

Establish an international hub of manufacturing small, affordable passenger cars. Ensure a balanced transition to open trade at minimal risk to the Indian economy and local industry. In India the Rules and Regulations related to driving license, registration of motor vehicles, control of traffic, construction & maintenance 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 Transport & Highways (MoSRT&H) acts as a nodal agency for formulation and implementation of various provisions of the Motor Vehicle Act and CMVR.

In order to involve all stake holders in regulation formulation, MoSRT&H has constituted 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 various technical aspects related to CMVR. This Committee has representatives from various organisations namely; Ministry of Heavy Industries & Public Enterprises (MoHI&PE)), MoSRT&H, Bureau Indian Standards (BIS), Testing Agencies such as Automotive Research of India (ARAI), Vehicle Research Development & Establishment (VRDE), Central Institute of Road Transport (CIRT), industry representatives from Society of Indian Automobile Manufacturers (SIAM), Automotive Component Manufacturers Association (ACMA) and Tractor Manufacturers Association (TMA) and representatives from State Transport Departments. Major functions the Committee is:

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Maruti Suzuki India Ltd.

o

To provide technical clarification and interpretation of the Central Motor Vehicles Rules having technical bearing, to MoRT&H, as and when so desired. To recommend to the Government the International/ foreign standards which can be used in lieu of standard notified under the CMVR permit use of components/parts/assemblies complying with such standards. To make recommendations on any other technical issues which have direct relevance in implementation of the Central Motor Vehicles Rules. To make recommendations on the new safety standards of various components for notification and implementation under Central Motor Vehicles Rules. To make recommendations on lead time for implementation of such safety standards. To recommend amendment of Central Motor Vehicles Rules having technical bearing keeping in view of Changes in automobile technologies.

o

o

o

o

o

CMVR-TSC is assisted by another Committee called the Automobile Industry Standards Committee (AISC) having members from various stakeholders in drafting the technical 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 and recommend amendments to the existing standards. Recommend adoption of such standards to CMVR Technical Standing Committee Recommend commissioning of testing facilities at appropriate stages. Recommend the necessary funding of such facilities to the CMVR Technical Standing Committee, and Advise CMVR Technical Standing 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.

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Maruti Suzuki India Ltd.

Standing Committee on Implementation of Emission Legislation (SCOE) – This Committee deliberates the issues related to implementation of emission regulation. Major functions of this Committee are –
o o o

To discuss the future emission norms To recommend norms for in-use vehicles to MoSRT&H To finalise the test procedures and the implementation strategy for emission norms Advise MoSRT&H on any issue relating to implementation of emission regulations.

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 Energy Sources are also involved in formulation of regulations relating to Emissions, Noise, Fuels and Alternative Fuel vehicles.

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Maruti Suzuki India Ltd.

Strategic Pricing Analysis
The prices of the cars of MSIL have generally been set to target the Lower middle-class and middle class families in India. Their pricing strategy is based on their continuing vision of “Putting India on Four Wheels”. Their prices are so designed as to enable people to upgrade from 2-wheelers to 4-wheelers and already 4-wheeler owners to upgrade to a better 4-wheeler offered by the company. In 2007, though the company changed its Price strategy as it was being labeled as Low-Price small-car manufacturer. They launched plans of a new Car in the Premium Car segment (Kizashi) to remove this label attached to the company’s reputation. The following chart shows the various Products and their Price ranges of the Cars of MSIL in India.

The company has set its pricing in following manner given below: 1. Setting an Objective ( Maximum Market Share )- Maruti believes in maximizing the market share as higher sales volumes will lead to the lower unit cost and higher long run profit. The company is the market leader in India for last two decades.

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Maruti Suzuki India Ltd.

2.

3. 4.

5. 6.

Determining the Demand –Maruti estimates the demand curve and also the price elasticity 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 of the competitors in order the capture the maximum consumers. Pricing Methodology (Value Pricing)Price Adaptations (Geographical Pricing ) – Maruti has always given differential pricing as per metropolitan cities. There are price differentials Mumbai, Delhi, Kolkata and Chennai. This differential pricing is in terms of the product form pricing and location pricing. The company also gives allowance and discounts and as well as promotional schemes.

Maruti as a market leader, MUL adopted aggressive pricing strategies. (I) Company had products at various price points.

In the early 2000s' when the passenger car industry was witnessing stagnant growth, Maruti slashed the prices of its various products, to revive the industry. Khattar said, "We believe that Maruti Udyog should take the lead in getting the market up and going once again. This is why MUL unleashed an aggressive pricing strategy." 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. In 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 on offering new upgraded vehicles at a low price. However' industry analysts perceived these price cuts as a desperate measure to revive flagging sales and regain 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 on road. Maruti gets 70% business from repeat buyers who earlier had owned a Maruti 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 offering is to be in the consideration set of every passenger car customer in India. Here is how every price point is covered.

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Maruti Suzuki India Ltd.

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 variants 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 variants which have different price points. Thus the company caters to huge segment 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 customer satisfaction.

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Maruti Suzuki India Ltd.

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 for Maruti. This has been found to be a major driver in converting a Maruti car sale in certain cases. Finance is one of the major decision drivers in car purchase. Maruti has tied up with 8 finance companies to form a consortium. This consortium comprises Citicorp Maruti, Maruti Countrywide, ICICI Bank, HDFC Bank, Kotak Mahindra, Sundaram Finance, Bank of Punjab and IndusInd Bank Ltd.( erstwhileAshok Leyland Finance). Maruti Insurance : Insurance being a major concern of car owners. Maruti has brought all car insurance needs under one roof. Maruti has tied up with National Insurance Company, Bajaj Allianz, New India Assurance and Royal 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 customers to have their cars repaired and claims processed at any Maruti dealer workshop in India. True Value – Initiative to capture used car market: Another significant development is MUL's entry into the used car market in 2001, allowing customers to bring their vehicle to a 'Maruti True Value' outlet and exchange it for a new 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 trusted 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 strength 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, recondition 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 showrooms 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 market. N2N: Car maintenance is a time-consuming process, especially if you own a fleet. 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 the vehicle's life: Leasing, Maintenance, Convenience services and Remarketing. Maruti 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 the car. This brings that customer to Maruti showroom and Maruti ends up creating a customer.

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Maruti Suzuki India Ltd.

Brand Ambassadors
Tag Lines for various Maruti brands:
1. Maruti Suzuki - Way of Life - The theme of the pavilion symbolizes the company'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 critical pillars of Way of Life namely Value, Spirited, Sporty and Straight Forwardness 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 everyone 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 popular 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 stands for being Contemporary, Pragmatic, Intelligent, Leader-like, Balanced and Caring. The same attributes stand true for Madhavan as well. He would represent WagonR’s values, strengthen the Brand further, and at the same time add youthfulness to the Brand. The company brought on board an ambassador whom they felt could connect 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 face 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 South Indian markets.

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Maruti Suzuki India Ltd.

After conducting a research, the company was sure that associating with a personality 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 WagonR’s KPI (Key Performance Indicators) in key Southern cities such as Bengalaru, Hyderabad, Chennai, Cochin etc. 2. Zubin Antalia for Maruti Suzuki – Maruti Suzuki contributes towards road safety through its Institute of Driving Training and Research (IDTR) and Maruti Driving School (MDS) initiatives and has already trained around 450,000 persons in safe driving in the last few years. Through the National Road Safety Mission, the company plans to train an additional 500,000 people 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 Maruti 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 promoting road safety awareness. Through this initiative, the company wanted to encourage a safe driving culture among the young drivers today. 3. Farhan Akhtar for A –Star - The success of Rock On made Farhan popular among the youth. He was chosen as the brand ambassador of A-Star to attract his new fan following as Maruti 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 names in the Bollywood circuit where advertisements are concerned. His tough image coupled with films like Dhoom to his credit, makes the handsome hunk an ideal model 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 industry, be it bikes or lubricants. 5. Abhishek & Amitabh Bachhan for Versa - Versa has versatile characteristics to ensure driving pleasure, easy maneuvering, spacious interiors, safety and flexibility. The company chose Big B as he is idolized by most Indians and is a respectful personality in Bollywood. The Bachhans together epitomize the best of both worlds... just like the VERSA, which offers the best combination of space and car-like drivability. To be fair, the Big B magic did work and the ads created significant interest, drawing people into the showroom. 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 travelling together. Due to the new positioning, Versa started doing well and witnessed an upswing.

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Maruti Suzuki India Ltd.

Future strategy of Maruti
FY2010-11. The GDP grew at 8.5 per cent, aided by recovery in agriculture and good performance in the industry and services sector. As a consequence, the domestic 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 substantially higher than what was anticipated at the beginning of the year. Despite 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 previous year. This became possible due to higher levels of productivity and many innovative practices at the shop floor level. The vendors, despite being taken by surprise, also managed to support the Company in its efforts to increase production. As a consequence, the Company was able to marginally improve its market share. Customers continued to rate the Company best in sales and service satisfaction, as measured by JD Power surveys. The Company has now been rated best in service 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 capability 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 capacity of 250,000 cars. The Company developed in-house i-GPI (Integrated Gas Port Injection) Technology and launched factory-fitted CNG variants for five of its models: Alto, WagonR, Eeco, Estilo and SX4. This i-GPI technology delivers higher fuel efficiency compared to conventional CNG cars. Besides, the loss of power 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 availability improves across the country, it could become a popular option owing to its low cost and environment friendliness. Apart from launching new products, the Company added 131 new sales outlets to reach 933 outlets in 668 cities and increased its service reach to 1,395 cities with 2,946 outlets. The Company’s network is now servicing about 1.2 million vehicles every month. With increasing service load, the importance of training has taken priority. The Company has initiated tie–ups

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Maruti Suzuki India Ltd.

with 28 ITIs (Industrial Training Institutes) to enhance availability of technical manpower at workshops. On the environmental front, in FY2010-11 the Company made improvements on its energy and water consumption at its manufacturing sites at Gurgaon and Manesar. Emission levels at both sites were strictly monitored. To 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 grown to contribute 20 per cent of total domestic sales. About 40 per cent of the Company’s sales outlets are in the rural format, with a scaled down investment that enables viability on lower volumes. Thus focusing on this segment also reaps benefits for longer duration for the company.

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Maruti Suzuki India Ltd.

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 Suzuki's research and development team. It is expected that XA Alpha Concept SUV will 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 will 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 powered 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-shaped tail lamps. It is expected that XA Alpha will replace the aging Gypsy and will 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

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Maruti Suzuki India Ltd.

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 Depreciation 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. The activity of risk management in the Company is reviewed by the Audit Committee through a management subcommittee, namely the Executive Risk Management Committee (ERMC). The ERMC consists of the Managing Director & CEO and all executive officers of the Company. It reviews the risk management activities on a regular basis in addition to scanning for any new risks that may arise due to changes in the business environment. While the possibility of a negative impact due to one or more such risks cannot be totally precluded the Company proactively takes

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Maruti Suzuki India Ltd.

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 careful monitoring are listed hereunder: 1. Macroeconomic Factors 2. Preparedness of value chain partners 3. Inappropriate product portfolio 4. Competition product launches 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 to 5 million units by 2015- 16. Although rising inflation, interest rates and crude oil prices are concerns in the short term, the Company is optimistic about the medium and long term. The Company is gearing up for growth. Initiatives to expand manufacturing capacity are underway. The Company’s products are well received by customers. SMC’s design philosophy of aggressive and sporty cars, K-series technology and the popularity of the Company’s diesel car offerings augur well for the future. To supplement this, the Company is stepping up its R&D capability to work in a unified way with SMC and offer a regular pipeline of new and refreshed models. The Company’s network of sales and service outlets continues to be its strength. Network is set to expand in the future, and will help tap opportunity as economic prosperity widens and deepens in the country. High commodity prices and adverse currency movements continue to be the challenges. Besides existing efforts 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 working closely with suppliers and dealers to prepare them for growth as well as higher competitive intensity.

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