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For a long time after India became independent in 1947, the car market had just two models to offer - the sturdy 'Ambassador' from Hindustan Motors (HM) and the sleek 'Fiat' from Premier Automobiles (PA). This was the result of Government of India's (GOI) decision to keep the car industry tightly protected. For HM and PA, the GOI dictated as to what type of vehicle the two companies should manufacture. No other domestic or foreign car manufacturer was allowed to enter the Indian car industry. The restriction on foreign collaboration led to poor technological improvements in Indian cars. As a result, car prices remained high while quality was inferior. This affected the growth of the industry. The demand for cars in 1960 was 15,714 units and in the next two decades, this rose to 30,989 units, which meant that the Compound Annual Growth Rate (AGR) was just 3.5 per cent. In the 1980s, the GOI felt the need to introduce an affordable small car, targeting the Indian middle class. As manufacturing a small and affordable car required better technology than was available indigenously, the government tied up with the noted Japanese company, Suzuki. The government formed a joint venture with Suzuki and founded Maruti Udyog Limited (MUL). It held 74% and Suzuki got 26% equity stake in MUL. In 1983, MUL launched the 'Maruti 800', priced at Rs 40,000...
Maruti was the undisputed leader in the automobile utility-car segment sector, controlling about 84% of the market till 1998. With increasing competition from local players like Telco, Hindustan Motors, Mahindra & Mahindra and foreign players like Daewoo, PAL, Toyota, Ford, Mitsubishi, GM, the whole auto industry structure in India changed and resulted in the declining profits and market share for Maruti. In the wake of its diminishing profits and loss of market share, Maruti initiated strategic responses to cope with India¶s liberalization process and began to redesign itself to face competition in the Indian market. Maruti completed a Rs. 4 billion expansion project which increased the total production capacity to over 3,70,000 vehicles per annum. Maruti executed a plan to launch new models for different segments of the market. In its redesign plan, Maruti, launches a new model every year, reduce production costs by achieving 85-90% indigenization for new models, revamp marketing by increasing the dealer network from 150 to 300 and focus on bulk institutional sales, bring down number of vendors and introduce competitive bidding. ".Focus on customer care has become a key element for Maruti, increasing Maruti service stations with the scope of one Maruti service station every 25 km on a highway. Cost reduction and increasing operating efficiency were another redesign variable. Cost reduction is being achieved by reaching an indigenization level of 85-90 percent for all the models. This saves foreign currency and also stabilizes prices that fluctuate with exchange rates. With rationalization of cost and enhanced productivity, Maruti bounced back to competition with 50.8% market share and40% rise in profit.
PRICING STRATEGY - CATERING TO ALL SEGMENTS
Bank of Punjab and IndusInd BankLtd. the A5 segment includes the Sonata. Maruti gets 70% business from repeat buyers who earlier had owned a Maruti car. Kotak Mahindra. Their pricing strategy is to provide an option to every customer looking for up gradation in his car. It has been the number one exporter of passenger car of the country for the sixth year in a row. Sundaram Finance. Their sole motive of having so many product offering is to be in the consideration set of every passenger car customer in India. HMC entered India by establishing its wholly owned subsidiary Hyundai Motors India Limited (HMIL) in 1996. From identifying the most suitable car coverage to virtually hassle-free claim assistance its your dealer who takes care of everything. HMIL has set up a modern multi-million dollar research and development facility in the cyber city of Hyderabad. Latin America and Asia Pacific. Maruti Finance: In a market where more than 80% of cars are financed. HDFC Bank. Maruti Insurance is a hassle-free way for customers to have their cars repaired and claims processed at any Maruti dealer workshop in India. N2N. Maruti Insurance and Maruti Finance. Maruti Countrywide. Maruti has tied up with National Insurance Company. HMIL currently has a 327 strong dealer network and 690 strong service points across India. HMIL is the first automotive company in India to achieve the export of 10 lakh cars in just over a decade. It has also strengthened the resale value of Maruti cars. allowing customers to bring their vehicle to a Maruti True Value outlet to get a fair evaluation done and exchange it for a new car. Here is how every price point is covered. New India Assurance and Royal Sundaram to bring this service for its customers. Bajaj Allianz. by paying the difference. Maruti has tied up with 8 finance companies to form a consortium.000 units per annum. OFFERING ONE STOP SHOP TO CUSTOMERS Maruti has successfully developed different revenue streams without making huge investments in the form of MDS.( erstwhileAshok Leyland Finance). Africa. The A2 segment includes the Santro. Middle East. HMIL had emerged as the second largest car company in India. This has been found to be a major driver in converting a Maruti car sale in certain cases. the A3 segment includes the Accent and the Verna. i10 and the i20. ICICI bank. Hyundai Motor Company (HMC) in India. Maruti has brought all car insurance needs under one roof. Finance is one of the major decision drivers in car purchase. which will see further expansion in 2011 . This consortium comprises Citicorp Maruti. HMIL presently markets 7 models of passenger cars across segments. To support its growth and expansion plans. HMIL¶s total production capacity to 600. Within a year of launch of its first product . Maruti Insurance : Insurance being a major concern of car owners. This helps them in making car buying experience hassle free and helps building customer satisfaction.Maruti caters to all segment and has a product offering at all price points. As HMC's global export hub for compact cars. Maruti True Value : Another significant development is MULs entry into the used car market in 2001. Maruti has strategically entered into this and has successfully created a revenue stream for Maruti. HMIL currently exports cars to more than 115 countries across EU. which is a big decision factor in buying a car.Santro.