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³Maruti Suzuki is planning to stop the production of Maruti 800 soon. Is this a wise decision

to do so? ´ 

 END OF ROAD FOR MARUTI 800,BUT IT WILL CONTINUE TO REMAIN IN INDIAN 

 HEARTS 

The question of whether Maruti has made a right decision can be answered from 2

 perspectives ie. Performance of maruti from the sales preservatives and secondly from the

 Indian sentiments perspectives

 First viewpoint 

Maruti Suzuki made a commercial decision to phase down the production process of its most

successful product ever produced by them, Maruti 800.The small car, came into existence in

1983 and completed with Hindustan µAmbassador¶ and Fiat µPadmini¶. The ³aam admi ki

car´, as it is popularly known as ,was different from its competitors (of 1980s) in the sense

that it was more fuel efficient ,did not burned a whole in the pocket and changed the attributeof owning a car from being considered as a ³luxury´ to ³convenient mode of transport for a

common man´ .

Maruti 800 was the main driver behind Maruti Suzuki success. The company was able to

achieve high profits in its intial years and went on to become the largest-selling car in India.

Historically, it has the blessings of the government behind it also. But the car's low-cost structure

remains unmatched. Hence, the cost advantage of the indomitable 800 is the reason behind its

 phenomenal success.

After ruling the Indian automobile industry for more than 25 years, Maruti is now facing severe

competition from not only domestic but also international competitors(post liberalisation) .Things

now have now undergone a sea change in these last 25 years.Maruti 800 which led to the ladder 

of success in 1980s has now, become a reason to worry. It is the only car in the Maruti basket of 

 passenger cars, whose sales has dropped from 2009 to 2010 by a great margin.

Seeing the fall in the sales of the car and inability of the company part to comply with the engine

efficiency and pollution standards, company announced to scale down its production in feb2009

and then later in the same year, it decided to phase out Maruti 800 completely seeing its poor 

 performance in the market. The company has made a right decision as Maruti has the product,hasalready reached its decline stage of the Product Life Cycle(PLC) in such a situation, Maruti had 3

option available with them :

a.   Maintain with the product in the hopes that competitors will exist 

b.   Harvest the product 

c.   Discontinue the product 

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The f i t alternati e can be followed by the company , however  the competitors will not 

vanish,in fact it will increase seeing India growth potential  B t company can continue to sell it 

 by putting more sales effor t, continuous improvement in the car and cashing on its strong brand

image and customer associations.

Another options available will the f irm is to gone for either harvest or discontinue of the product.Harvesting could be another good alternative for the company from the commercial point of 

view, By reducing the marketing effor t and coasting along, till the product continue to achieve

sales. But the company in reality followed the last alternative and has removed the product for the

 product line. However, It is quite evident that the company will not let it position dilute in the

Indian market and will soon launch a replacement car for 800.Infact already news is circulating

that Maruti will replace it with Suzuk i Cervo,and it will compete with its other counterpar ts like

ford Figo and Chevrolet Beat. But whether this new car will able to match up with the brand

which revolutionised Indian automobile industry is the next big question.

Second viewpoint: 

"A brand t  

at capt ¡  res your mind gains behavior. A brand t hat capt ures your hear t gainscommit ment ."  

-Scott Talgo 

The name Maruti has become gener ic for "small car" in India, since it is invar iably most 

Indian's f irst car and made it possi ble for Indian consumers to have bigger dreams and

expectations. Even Maruti's tagline "Realize your dreams" seems especially apt.Today the

Indian car market is in a transition phase with the Maruti 800 steadily losing market share to bigger hatchbacks, although the car retains its numero uno status, but its market share has

 been declining over the years. 

The very fact that Maruti 800 still adorns the porch of millions of Indian houses is itself atr i bute to the inherent strength of the car. As foreign automakers make a beeline for the still 

virgin Indian automobile market, Maruti 800 continues to gratify the basic commuter needsfor the common Indian. It will go down in automotive history as a car that put a nation on

wheels. The brand ³Maruti 800´ was the bread and butter earner for the company, and is not 

Maruti 800  

position in 2009

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important from the company, but also have a space in Indians hearts also. Maruti 800 wasthe µpeople car¶ and become synonym with Indian car industry. It is one of the very few

Indian products which actually became a ³BR AND´.

The company decision to shut down production process for Maruti 800 can be questioned

from the perspectives of brand value and consumer sentiment. Has the company made a right

decision to shut down its production seeing its high brand image in the eyes of Indianconsumers? The answer is NO, the company which is giving explanations on its shutting

down of 800 as inability to upgrade engine to comply and pollution standards .But is

continuing to produce Maruti Omni, another workhorse for the company also had an engine

which did not met Euro 4 ,instead of pulling it from the shelf the company , made it Euro 4

compliant. The reason being good sales it brings to the company. I V R ao, Maruti¶s

engineering head and his team had worked hard to create an engine for the 800 that was Euro

4 compatible. But with 800 sales falling in large cities the company decided against selling

the model in these cities. (www. livemint.com/livewire/2010/04/maruti-800-still-not-off-the-

roads) 

The company decision adversely affected the customer sentiments and Maruti brand image.

Maruti Suzuki should have understood that it is very difficult and time taking process toestablish a brand and even more difficult to get a place into the consumer hearts.

 After putting both the perspectives , I feel wrong decision has been made by the firm to ,

 seeing its head strong brand loyalty and customers sentiments. Successful brand are not build 

in a day and replacing Maruti 800 with some other model will certainly not be easy for the

company, specially seeing the competition from both domestic and international players. The

company should have continued to harvest from the product as long as possible instead of 

completely shutting it down.