Submitted to: Prof. P. Bharadwaj

Submitted By: Hitesh Babbar Jhanvi Thakkar 2010079 2010086

Kanupriya Kohli 2010090 Nirmal Modh Kiran Karkera 2010099 2010093

Topic for the study:

Maruti 800 Model car of the MUL company.
Justification and Relevance: y Maruti 800 was a revolution of sorts in the 4-wheeler area in India. y It was the first small car to be launched in India. y The strategies used by MUL from time to time to maintain/increase the sales of Maruti 800 were exemplary. y It was the leader in market sales for nearly 20 years.

All these points make for a good case -study.

47. in 2004. But changes to the regulatory environment in India could finally me an the end of the road for the 800. has sold over 2. 1983. first manufactured in 1983. which was set up in 1971 and closed in 1978. It was the fag-end of 1983. but it remains very popular as an entry-level model in India. What in any other circumstances would have been just an ordinary car launch turned out to be the start of the automobile revolution i n India. the M800 continues to sell an average 12. the Maruti 800 (M800) was India¶s first µpeople¶s car¶. Its obituary has been written before. The first model was the SS80. In fact. never-seen-before-in-India. The intention from the beginning was to produce a µpeople¶s car¶. MUL launched the first Maruti vehicle ± the Maruti 800. a 796cc hatchback car priced at Rs. but the 800 has defied predictions of its demise. when one Harpal Singh of New Delhi was handed the keys to a small. economical cars for the masses.. In the 1980s.000 units per month. It caught the fancy of the middle class. the car remained within the reach of the Indian middle class and became a runaway success. MUL will mark its 21st year of leadership in the Indian car market.INTRODUCTION: Company (MUL) Introduction: MUL was a joint venture created in February 1981 between Japan¶s Suzuki Motor Company and the Indian Government when the latter decided to produce small. Product (Maruti 800) Background: On December 14. The M800.1 million units. Even though competition predicts that the µA¶ segment is dying. Available in vibrant colours when India¶s passenger car population comprised mainly Ambassadors and Fiats in black and white. To get the project off the ground MUL took over the assets of the erstwhile Maruti Ltd. Subsequently. M800 gave Indians the first taste of global quality and reliability. The Maruti 800 may be based on 1980s technology. Maruti Suzuki has never looked back since. the late Indira Gandhi. hatchback by the then Prime Minister. in spite of price hikes. in the cold winter of North India.500. .

A Maruti 800 booked in 1984-85 would be cleared only by 1987-88. Maruti was the brainchild of the late Sanjay Gandhi. The 800 soon notched up a huge waiting list as sales boomed. It was a time of licenses in India and manufacturers needed to get a license from the government on what to make and what numbers to make. With all three products obsolete. still made for a respectable power -toweight ratio because the car weighed slightly above 600kgs. quality construction more of an afterthought and attributes like power. The rivals tried to play it down on the power front. in 1983. Named after Hanuman. However. ease of operation. the Indian automobile industr y was going through what might be termed its anthracite period in history. . safety and comfort being last on a manufacturer's to -do-list.500 making it the cheapest car at that time in India. the Maruti 800 proved everyone wrong by a long margin. was unable to provide.The past: Limited choices better left alone India's protected market meant that until the early eighties Indians had essentially three model choices in terms of automobiles: the Morris Oxford derived Hindustan Ambassador. which though not much. refinement and fuel efficiency . the name of the God of Wind in Hindu mythology.attributes that the small Indian passenger car industry.5cm. People were awed by Japanese reli ability. marked the introduction of the modern automobile into the Indian passenger car market. threecylinder. Power was 39 bhp. Daihatsu and some other majors. The car was powered by a 796cc. The company Maruti Udyog was conceived by the Indian government in 1981 as a means of providing affordable personal transportation to Indians. The Maruti 800 based on the European Alto IV (SS80 in export markets) was launched in December 1983 in a four -door. The launch p rice was INR 47. the Fiat 1100 derived Premier Padmini and the Standard Herald derived Gazel. carburetted engine and had front-wheel drive. Often waiting lists for cars would take up to three years to clear. After toying with the idea of a joint venture with Volkswagen. Renault. Suzuki was short-listed because of the Japanese major's expertise in small cars. SOHC. two-box saloon (the tailgate opened only from the externally hinged rear window that was the access to the boot area) with a total length of 329. 6-valve. in 1983. son of the then Prime Minister Indira Gandhi. This used to create a huge gap between demand and supply resulting in long waiting lists. The Maruti 800. citing three cylinders to be insufficient for taking on a five-passenger load.

ST E GT WE ESS SWOT ANALYSIS OPPORT T ES T RE T M ti it t ti i i l i l i i l strength t t il i i l t ti ilit t t li it t i T it i it t i t lit i t t t t t T i Weakness t t ti i i M t t i t it Opportunity t t ilit tt i i t ll ti i Threat t t ti t l l l t t t t it ti l ll i ll t i l ti t i ll t t t it t l i i l t t i i i li i M i ti l ti i t l t t i t i t i l it ti % t t M i l i tl t ti l it t i t t i ti T t t ll t t T i i l l M ti it t ll l t it l li i M it ti t li i ti ti i il i T tit t tt t ti i t t t j l M ti i t ll ll t .

The common man wanted to buy a family car that gave him mobility and didn¶t cost a bomb and was easier to own and maintain. There were other sops too specifically for Maruti.for some time. The population was rising and there was a serious shortage of options as far as car models in the nation was concerned we were not exactly spoilt for choice as far as cars was concerned. Consequently. SOCIAL FACTOR: Socially the Indian middle class was gaining in repute and spending power.PEST ANAL SIS for Maruti Suzuki to enter India POLITICAL FACTOR: The political environment favored Maruti to enter the Indian market with tie up with Suzuki at the time in 1983. TECHNOLO ICAL FACTOR: With the presence of only two players in the industry The Hindustan Motors ³AMBASSADOR´ and the Premier Padmini (PAL) ³FIAT´. The government was lifting sanctions and making it easier for foreign players to enter the enter the market in a joint venture with Maruti . the government permitted Suzuki . The Indian economy was doing better and after the last decade¶s emergency rule under Indira Gandhi the eighties was a time of development and stabilization for the economy and people. enjoyed a number of benefits from the government. Maruti entered India with Suzuki (Japan) and brought with itself latest technology that included a) A modern compact efficient engine .a state operated enterprise at the time. the only FDI player . several new car projects like Premier Automobiles planned tie-up with Nissan to manufacture the Sunny in the mid80s did not receive government approval. Ten years later. The Indian government is alleged to have curbed competition in order to promote stateowned Maruti. ECONOMICAL FACTOR: The economic conditions in India where favoring Maruti Suzuki because the people were willing to spend more on automobile sector. In 1983. as part of a broader move to liberalize its economy. which helped the company keep prices down for the 800. The 800. India de-licensed passenger car manufacturing and opened it up further to foreign participation. The disposable income of the middle class was rising and they could now think of investing in things like better homes and cars so Maruti¶s entry at the time was perfect. being a Maruti model. it is safe to say that technologically the cars being sold in the era were dated and old.

b) Bucket seats c) Floor mounted gear box d) Better servicing options e) Cheaper spares So with a favorable PEST analysis Maruti Suzuki zoomed into the country and the hearts of millions of people. .

's J.V rules for new players T REAT FROM EXISTING PLAYERS: Negligible as the 2 players were selling 2 decade old products with no new models planned .PORTER¶S 5 FORCE MODEL BARGAINING POWER OF CONSUMER: Negligi le because of only 2 existing players in the market T REAT FROM SUBSTITUTES: No close substitutes at all BARGAINING POWER OF SUPPLIER: Very less because si e of t e unserved market was very large scale T REAT FROM NEW PLAYERS: Not at all because of the govt.

which was 25-50 of the 800's price. the 800 had great aspirational value to millions of its first time buyers. Price difference between Maruti 800 and its nearest rival used to be about INR 50. It was good value for money and yet came with basic amenities like air conditioning. the 800 became an entry point for first time car buyers. Targeting. . Positioning of the Maruti 800: The Maruti 800 was mass marketed since day one and with India being a largely price-driven market. The Maruti 800 was targeted at small families and the middle class. coil -sprung rear suspension and bucket seats in the front. People who wanted to upgrade from a two wheeler to a 4 wheeler. The Maruti 800 made an exce llent entry-level car. Indian legislation has also ensured that there were three-point seat belts all around.000.000-100.Segmentation. So it was positioned as an entry level car for those who wanted to step up to the world of four wheeling.

a title it has held for every month since then. Apart from these. Indian legislation has also ensured that there are three-point seat belts all around. including: The Maruti 800 is the cheapest car in the Indian market.000-100. till a few months back. which means that the 800 has the widest reach. The Maruti 800 is simple and basic and yet sophisticated enough to meet the requirements of safety and comfort. when its stable-mate Alto led it by a few hundred units. which helped the company keep prices down for the 800. coil -sprung rear suspension and bucket seats in the front. The Indian government is alleged to have curbed competition in order to promote state-owned Maruti. Consequently. was priced about 50 higher. Like all success stories. but several factors stand out. the 800 has become an entry point for first time car buyers. There were other sops (Standard Operating Procedure) too specifically for Maruti. the Maruti 800 became the largest selling car in India. Maruti has the largest network of dealers in India. The Maruti 800 makes an excellent entry -level car. Over the last twenty years the 800 has established a reputation for being trustworthy and reliable. several new car projects like Premier Automobiles planned tie-up with Nissan to manufacture the Sunny in the mid-80s did not receive government approval. It is good value for money and yet comes with basic amenities like air conditioning. A long period of more than 15 years without any real competition ensured that the 800's volumes stayed high. enjoyed a number of benefits from the government. which is 25-50 of the 800's price. With India being a largely price-driven market. the 800.000. . Price difference between Maruti 800 and its nearest rival used to be about INR 50. till the month of May 2004. Thus the Maruti 800 (actually up to the late 90s) did not have any real competition in the Indian market. This has ensured that the Maruti 800 has managed to retain its low pricing in a market where the nearest competitor. being a Maruti model. it is difficult to point out one single factor that has been responsible for the car's success. enou gh to amortise costs of the plants and dies used for manufacturing.Reasons for the success of the Maruti 800: Within a few months of its launch.

The 800's effect on India: It would be wrong to credit the 800 with merely the physical growth of the Indian market in its early days. From an object of purely aspirational value. The 800 has encouraged low pricing in the Indian marketplace.000. Thanks to the model being launched in 1983. Thanks to the large volumes produced of the 800. the 800) in the early 80s laid the foundation for Gurgaon to develop into the modern IT -BPO hub that it is today. The 800 has been the car that has put India on wheels. models like the Porsche Cayenne or the latest S-Class. Companies like Sona Steering (now Sona Koyo). at the to p-end. competitors are in clined to price their products lower to come close to the 800.000 and a sub compact like the Tata Indigo and the Ford Ikon (three-box Fiesta saloon based on last generation European model) at little above INR 400. The employment generated (both primary and secondary) was huge as Maruti resulted in the growth of a number of ancillary units. It has helped the market to mature to a level in which there is a place for many product segments and. . Subros and Jai Bharat Maruti are amongst the most successful suppliers in India. The car has been for the Indian market what the 2CV and the Beetle have been for their respective markets. The initial phases of the growth of Gurgaon (a significant satellite township of Delhi) was fuelled by the local Maruti manufacturing unit. Thanks to the low price benchmark set by the 800. In doing so the 800 has provided a platform for all the models higher than it in the market. On the other hand the contribution of the 800 in the socio-economic development of the satellite townships of Delhi cannot be denied. The infrastructure development kicked-off by Maruti (and its mainstay. the 800 has transformed the passenger car in India to a per ception more along the lines of a basic necessity. This has resulted in a market where the B-segment hatchbacks start retailing at little above INR 250. the Indian automotive benchmark was raised a few notches in terms of performance and quality. This has made a number of cars more accessible to the Indian customer. the ancillary indus try that started with Maruti in the Delhi-National Capital Region has benefited the most.

That¶s the precise reason why MUL would not discontinue the 800 just yet.S 4.EECO.Estilo.Maruti 800 in the BC Matrix as of 2004: STAR ???? Swift.Alto. Yes because of the latest Bharat Stage 4 emission norms it has been proposed that the 800 be phased out but that phase out would not be immediate it would be carried out slowly and timely as its been started with Maruti not selling/producing the 800 in 13 of India¶s top cities. . the phase out would follow a similar path into tier1 and tier 2 cities. A star. yes the sales have slumped to around 2500 monthly. Wagon R. Omni Even according to the latest (year 2004) BCG matrix the famed Maruti 800 is a cash cow business for Maruti. rand Vitara ypsy CASH COW DO 800. But there are still hard core fans that swear by the 800 name and would just not put their trust in any other car. Swift Dzire Ritz.

It¶s safe to say that India¶s answer to VW Beetle a nd the Citroen 2cv will not die just yet. their target audience was always most certainly the young family man or a young man who is about to start one. The campaign ³Petrol Khatam Hi Nahi hunda´ highlighted the super mileage of the car and incorporated the warmth of the family as well. Maruti always touched the emotional cord with their adds weather it was the ³India comes home in a Maruti´ campaign or ³ joy of life ³ campaign their adds were always that much closer to the hearts of the audience. On the PLC front though sadly it is coming to an end it¶s in the decline phase of its life with it having already created a market share and that too is being eaten away. When the car was launched in 1983 within two years the car lapped up numbers like no other and emerged as a star for the company. The campaigns have always shown a sensitive. family centric theme that always found favor with the sen timental Indian audience. time and effort Maruti always scored big by making their ads high on the emotion quotient as well. Fuel efficiency was another trump card on their side that Maruti always played to perfection. . For more than a decade since 1987 till 1998 it was the star of the Maruti stable and thereafter it assumed the role of a cash cow which it holds to this day. Maruti¶s plans of taking it out in 2-3 years would mean the end of the road for a motoring true icon. There portrayal of the 800 as a member of the family only goes to reinforce their family and values orientation. On the advertising and promotional front the 800 has always been projected as a compact entry level family car.If we take a look back at Maruti¶s flagship models performance a decade and half ago it was the shining star of Maruti. Since they were high involvement purchases involving a great degree of thought. Their creative¶s also targeted the youth quite effectively as it was presented as young peppy car when actually it was aging.

. March 2000. 365000.980 units for export. The market equation balanced the loss on Hyundai¶s Santro and Daewoo¶s Matiz part. The difference was of LX and VX but one cost 66.Maruti 800¶s Competition and Strategy: 2000 onwards Maruti 800.348 units in the 'B' segment and 7. At the same time Alto was strategically placed with two variants LX and VX.000 more then another. Later on the VX version was backed out from the market as customers were hardly able to differentiate between two models. MUL¶s strategy to offer credit sale to its dealers also fueled the fire. Though there was hardly any difference of more than Rs.510 units of Zen and 4. The Hyundai¶s loss of market share was not because of lack in marketing strategy but the production problem. The basic strategic focus of MUL is to offer Zen. Omni and Esteem. the market expands and the consumer base increases which means there will be more number of unit sales. These sales included 12.Never position two brand extensions with high price difference and to wrong customers! January 2003. It is quite clear from the strategic point of view that Alto never influence Maruti 800 or its variants for cannibalization. The MUL¶s logic for increase in unit sale with the decrease in over-all market share is that when there are more players in the market there will be competition. The obvious idea is to keep Maruti 800 out of the competition and make it nearest alternative for two wheeler segment.838 units of Wagon R. the name most common for a middle class Indians and the only car in the A-Segment category. 299. It served as cash cow of MUL for nearly 17 years. MUL came out of the mess with sales of 44.Alto LX and its variants to all the existing customers and on the other hand position Maruti 800 to those who want to switch from twowheeler to four-wheelers segment. It can still milk better and MUL is trying its level best to capture the market. Placing all facts and moves of MUL since 2000 will give a broader picture of the game plan and strategic sequence. So what is the lesson from this mistake . According to Ansoff matrix it will be called as new market / old product move.000 (mind the psychological pricing) while Alto LX was placed between Wagon R and Esteem at price Rs. Some market share was eaten up by Telco¶s Indica as well. Hyundai¶s Santro and Accent was produced on the same assembly line and Hyundai was trapped in catch-22 to maintain a restriction on trade off between the production of Santro and Accent. Tracing back to start of year 2000. the sales of Maruti 800 had grown by 22 per cent.167 units. Competitors were emotionless on this move of MUL. MUL market share had fallen to 51 percent from 80 percent that it had enjoyed for nearly seventeen years. When there is competition. that of Omni by 48 per cent and that of the Zen by 22 per cent. MUL hiked the price of its all 800 cc variants.35000 between the two entry level and small car segment. Alto LX was placed between Maruti 800 and Zen at price Rs. Though the market share had fallen altogether. The sales included 3.

The whole game plan was to cash this opportunity of increase in raw material cost. The portfolio of MUL had at least five models in the A and B segments. for the period April 2003 to March 2005. The MUL shaped it as organized sector with the brand name True Value.000 km were on one±year warrantee.15000 for 800 cc variants. MUL going against the situation slashed the price of its entry level car-Maruti 800. Now after six month the price reduction was only for Maruti 800 and in the range of Rs. All the damaged parts were replaced with the new Maruti branded parts. To make it an opportunity MUL reduced Rs. Only vehicles which are less than seven years old were procured under the True Value scheme in accordance with the norms of MUL. Gypsy. Maruti 800. MUL was on a strong position. MUL was thinking hard to curb the market in the A and B segment. while on the other side Hyundai with Santro.Just six months after that Tata Engineering gestured for price hike due to higher input cost. How Smart!!! The luck charmed on the royal part too which was exempted by Suzuki for Alto. Esteem and Zen Suzuki. 8000 for 800 cc variants and Rs. The motive of Maruti behind this ball game was to maintain market share of its brands and to regulate the market from either end. The Zen was in the top list of true value brands. 50000 on Alto. the increase in price in J an-2002 was nearly Rs. there was no loss but profit by this price decrease. OOPS!! How it is possible when the cost of raw material is increasing and out of 12 Manufacturer one (MUL) has slashed the price and for what did they hike the price for just six months. A 10 per cent discount on knocked down components imported by Maruti came as additional relax to MUL. The only question arises is that how did it happen? The answer comes from psychological effect on customer with the increase in the steel cost. . All dealers in this market were selling the second hand car with 85 percent price of the new car. To make some visible differentiation between a newly bought Zen and the one bought under True Value brand. Zen and Santro. The competitors were not ready to reduce the prices and were shrinking their market with more expensive variants like Hyundai Getz. MUL relaunched Zen with new look and without a price change. If you remember. But some still think that the price reduction was due to decrease in sales and on the other hand MUL told its due to cost rationalization and improvement in production efficiency. Omni and Esteem covered 55 percent sales of MUL portfolio and MUL covered 60 percent market share of the total four wheeler segments. 8000 from one consumer (price hike) in the month of January and gave it to a customer who bought in the month of July (as a decreased price) and the increase in sales with this game plan bought all the profit. 4000 for Omni and Esteem. The only thing they did was that they took money Rs. Maruti 800. Competitively. All the vehicles done lesser then 60. Omni. Logically. This key insight was in the long term profit at the expense of short term decrease in sales. The three Brands. The highly sold brands were Maruti 800. This market being unorganized and large was on the radar of MUL. The main competition for these segments was coming from second hand cars market as substitute. Tata Engineering with Indica and Fiat Auto with Palio were competing with only one product in B segment.

MUL launched a new market offer called `2 -se-4' in Ahmedabad and Hyderabad under which a consumer can exchange his two-wheeler for a Maruti 800. with the presence and focus of car -makers such as Hyundai. Maruti the major player of the small car segment market has only 15 percent share in the A3 segment. Baleno and Esteem sales by 7 percent Alto. It was a different kind of proliferation where a customer can choose a second hand Maruti 800 or Zen or a new variant of Zen and Wagon R as per the value fathomed by customers. In A3 segment. In July 2004. WOW!! Handle threat with a counter threat. Zen and Wagon R shares the highest share of sales in the product portfolio of MUL and maintained the over all sales increase by 20 percent. unveiled a new-look Zen. more national and international bank started integrating in the win-win strategy of MUL. MUL increased the price of all models indirectly by launching new variants of Zen. To cope up with the increasing cost. Maruti Udyog Ltd. The true indication of Head-on can be guessed by the launch of new models by major players who also expanding their presence in the segment. This launch wa s the replacement of . The over-all sales MUL grown by 20 percent in the financial year 2007 Despite decrease in sales of Maruti 800 by 11 percent. 100. This was to get competitive advantage of low cost steel as compared to imported steel. Apart from easy loans from banks. MUL launched sedan SX4 and priced just at par with Honda City. The bank promised to offer 85 percent finance for on road Maruti 800 (with registration and insurance) for tenure of seven years. The upcoming problem was of Maruti 800 and its variants. In mid of 2004. HDFC Bank has launched a new product for financing Maruti 800.000 which is still on papers. This makes the MUL also busy in price adjustments. To make strategic fit of Maruti 800. The next thing MUL did was to increase the procurement of steel from domestic market by 15 . the main objective was to use wider rural market network of SBI for tapping the prospects. Honda and new entrants like Mahindra -Renault combine is making existing and competition intense. Sales of Maruti 800 were eroding continuously since 2000. The price of Maruti 800 was kept constant to suit it for the targeted customers who were two-wheelers owners. The objective was to match EMI of the two-wheeler with Maruti 800. India's largest carmaker. With eye on entry car market. MUL stepped out in year 2003 to tie-up with the State Bank of India for financing. MUL also relaxed the norms of schemes for True Value cars to increase the market share. without change in price. Ford. Alto sales were 14 percent higher then Maruti 800. Tata threaten with a car priced on Rs. The threat was caught by MUL and proactively advertised launch of its LPG variants of Maruti 800 and Alto. In the same year. GM. Alto performance made it to overtake the company¶s bread-and-butter car Maruti 800 to become the largest selling car. To take the competition by Hyundai's Santro and Tata Motors' Indica seriously for B-segment cars.The indication is that MUL is only company to penetrate in the market with low priced vehicles. The idea was to reduce the maintenance and fueling cost.

fuel efficiency and diesel engines. makers of the popular model Santro. C segment. The only restriction will come with production unit at Manesar which produces the Swift and SX4. The strategic focus is on three dimensions.3 per cent. . The increasing interest rates have begun to affecting the sales. The company sold 37. the sales were driven by lower exercise duties. that comprises Omni and Versa. MUL has the capacity of producing 2500 units per month due to restriction on production capacity. It is fact that 75 percent of the customers buy the cars on loans.923 units. comprising MUL's flagship Maruti-800.214 units. In June 2007. which is about 40 basis points lower than that offered by arch rival Hyundai Motor. So the scope in the market is higher. The MUL reshuffled its portfolio launched five new models starting with Swift Petrol in May 2005.4 per cent in the month at 3. the company phased out the Zen and replaced it with a brand new car the Estilo and gave Wagon R a face lift. Sales in the A1 segment. Till now the diesel engine is the domain of Tata.646 units in the A2 segment comprising hatchbacks Alto. Esteem.8. the external factors are turning unfavourable to customers. MUL has offered discounts ranging from Rs 5. MUL sales up by 24 percent. Alto. Versa and Omni is also going against the company.The installation capacity of this unit is 100. loans for Maruti's cars are being priced at the lowest rates in the industry .000 to 35. Wagon -R. In 2006-07.000 units.36 percent.5 percent. Zen and Swift as against 27. To beat the competition.59 per cent per annum. dipped 20. Omni.000 across various models. Apart from internal problems. Swift. The discount is on Maruti 800. new engine design. The domestic sales were zoomed by 25. On the other hand increasing cost of steel procurement has affected the opera tion margin which is flat on 13. Versa and on the petrol models of Wagon R. Swift diesel was initial step for the whole journey.228 units in the same month last year.Baleno and to strengthen the A3 segment. The car maker's inability to replace its fading models Gypsy. The launch of LPG models has witnessed the strategy of MUL. Nearly 7000 units of Swift already produced from this plant per month. up 38. In the FY06. The momentum in the economy and increase in the disposable income of the consumers increased the market demand by 22 percent. No discounts have been given on Swift diesel and SX4. Sales of sedans Esteem and newly-launched SX4 increased 46.3 per cent at 6. This left little score for the production of SX4.

419 (price cut) 2.144 2.827 Maruti 800 (Domestic Sales Volume in Units) Fiscal ears 852 1983-84 20269 1984-85 63763 1987-88 106114 1994-95 1995-96 139403 183593 1996-97 184584 1997-98 161975 1998-99 189061 1999-00 151976 2000-01 144387 2001-02 143322 2002-03 167561 2003-04 . (price cut to June 2000 offset sales tax hike) January March May July March April 2001 2001 2002 2002 2003 2004 (excise cut) 2.201 2.444 2.24.32.Prices over the past five years haven't moved much February 2000 2.903 (excise cut) 2.

This new shape made the 800 into a five -door hatchback though the mechanicals remained the same including the 796cc. the SS80. SS80. The model received a heavy facelift in 1986 with the introduction of the SB 308 body style. The car was known just as the Maruti 800 and was essentially a four-door saloon with a rear window that opened for access to the boot area. The 800 in this form has continued till date though the company has now withdrawn the five -speed gearbox from the range in order to push the new Alto.Time Line: Maruti launched the first 800 (Alto IV generation). four door saloon with a rear window that opened like a hatch. The company also offered a five-speed gearbox in the deluxe model. Power went up from 39bhp to 46bhp though there were n o other major changes. Also five -speed gearbox. This body style continued unaltered. the tailgate opens completely a nd the car is now a five-door hatchback 1997: First major facelift in eleven years. . Maruti replaced the carburetion system in the 796cc engine in early 2000 with an MPFI unit to meet the Euro II emission norms. barring a few changes to the grille. 2003: Five speed version withdrawn. taillight. The present Maruti 800 shape was launched in 1997. 1986: Major facelift: SB 308. 46bhp. December 1983: Launch. three -cylinder engine and the leaf -spring rear suspension. dashboard. New headlight. coil-spring rear suspension and radial tyres. for the next 11 years till 1997. indicators etc 2000: Upgraded engine MPFI. Platform remained the same though the rear leaf spring suspension was changed to coil springs for the deluxe model. in the Indian market in December 1983.

000 unit per month model (and currently India's second largest selling car) cannot be retired so easily. a speculation that Maruti executives are quick to dismiss and they have a point too as a 10. has more modern mechanicals and is bigger.10. only slightly higher than the AC version of the 800 (INR 226. In May. It is also regarded as a more expensive car in the typical Indian social strata. Maruti had reduced the prices of the Alto with the base version now selling at around INR 230.000 is not very far off the 800.The 800: Future Imperfect? The Indian passenger car market is witnessing a sea change with the B . Maruti executives point out that April-July is not a good period for the 800 sales as the 800's main customer . it is the rise in sales of the Alto that has affected the 800. Alto sales started creeping up once Maruti launched the non-AC version and the gap between the 800 and Alto narrowed and the bigger car finally overtook the traditional best seller in May 2004. the Indian media has been quick to speculate the eventual demise of the Maruti 800.10. In fact. In reaction to falling sales. Alto . The A-segment. Even the AC version of the Alto at INR 260. which Maruti attributed to uncharacteristically higher sales in May 2003. . where the Maruti 800 is the only player is not growing and 800 sales have been stagnating in recent months.373 units.000 (non AC). It seems likely that the Alto will continue to lead in the Indian market.016.the salaried middle-class in India . People who used to gift Maruti 800s are now gifting the Alto as for only a few thousand more they command more respect.and Csegments being the fastest growing. Some time back. Thus the pricing of the Alto has made it a substitute for the 800. the worst affected being the 800's wedding gift market. But more than the stagnation (or decrease) in sales. They point out that the company's strategy is to bring down the Alto to A segment prices so that Maruti can offer two models in the same price band.000). The Alto is powered by the same 796cc engine." pointed out an executive.are under financial pressure (because of income tax in Feb-March and expenses during the start of the financial year like school/college admission fees) during these months an d also because of a tendency to defer purchase decisions till after monsoon. May sales went down on a year-on-year basis. "Two models will only help grow the A-segment like our three models have grown the B-segment. the score read: Maruti 800 .

like stopping the 800 five-speed version and delaying a long overdue facelift for the 800 . The intention is to depreciate the Alto faster so that prices can be further brought down. For many thousand aspirants. What may eventually bring the end to the 800 story ." And trust is something that the 800 has in abundance as a brand that has crossed 20 years of existence and sold in excess of two million units to date. With financial institutions ready to offer loans up to eight years. To support the 800. But that is still three years away and this is a long time period in India's automotive industry.000 and an EMI of INR 2. Other steps .500.point out some analysts is future legislation.The then Managing Director of Maruti Udyog added. the bias towards the Alto cannot be missed as the company realises that they have an eventual replacement of the 800 now. the Maruti 800 base model is now available at a down payment of INR 21. because it is the one they trust. A fresh facelift cannot be ruled out. "The point that Maruti 800 would make way for a lower priced Alto. Maruti 800 is the only brand they will settle for. Yet. . something that brings it close r to two-wheeler prices. That is not true. a fact that Maruti is strongly publicising with millions spent on a new ad campaign to highlight the affordability of the 800. assumes that price is the only factor for entry-level buyers. New safety legislation and the impending upgrade to Euro III may make Maruti think very hard about whether or not to invest in the 800. Maruti is now targeting the 40-million two-wheeler owners in India. Maruti is also working hard to further reduce component costs of the Alto so that prices can be further rationalised. have pushed customers towards the Alto.

They cited inability to upgrade the Maruti-800 engine to comply with engine efficiency and pollution standards as reason for the same. Ahmedabad. Mumbai. Kanpur. Kolkata. Later in the same year the Maruti-800 was phased out from production schedules completely due to ever diminishing contribution to the sales revenue. Bangalore. The cities were Delhi. Surat and Agra. . Pune.Fate of Maruti-800: In early Feb-2009 Maruti-Suzuki Limited announced to scale down the production of the popular brand Maruti -800. At that time Euro IV norms were recently adopted in 11 major cities of India. Chennai. Hyderabad.

EXHIBIT-1 Market Segment of India Car Industry -2010 .

Learning/s from the study: y STP of the company was spot on considering the country they were in. y Varying Marketing strategies to maintain/increase the sales of the product. y Managing cannibalization from its own product. y Exiting the market at the right time. . www. Bharadwaj¶s Slides Wikipedia Google www.References: Philp Kotler y y y y y y y y y .com www.articlesbase.icmrindia.internsindia.

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