FINAL REPORT

A THESIS ON

“MARKETING STRATEGIES OF MARUTI SUZUKI LIMITED TO BE A LEADER IN AUTOMOBILE INDUSTRY.”

BY GAURANG PATEL

[8NBAM128]

A PROJECT ON

“MARKETING STRATEGIES OF MARUTI SUZUKI LIMITED TO BE A LEADER IN

AUTOMOBILE INDUSTRY.”

To, BY, Dr. Dipti Sethi GAURANG PATEL

(8NBAM128)

A Report submitted in partial fulfillment of The requirement ofTHE MBA PROGRAM

(The class of 2010)

Table of content

Acknowledgement……………………………………………………4

2

Abbreviation…………………………………………………………..5Abstract……………………………………………………………….6

1. Introduction………………………………………………………..7 1.1 Indian automobile sector ………………………..……….7 1.2 Current Scenario of Automobile sector in India ……….8 1.3 Key players in Automobile Industry …………………….9 1.4 Cars by Price Range……………………………………..10

2. Company Profile…………………………………………………12 2.1 introduction of Maruti……………………………………12 2.2 About Maruti Suzuki……….……………………………13 2.3 SWOT Analysis of Maruti Suzuki…………..………….14

3. Marketing Strategies of Maruti Suzuki…………………….….154. Why go for Maruti Suzuki…………….…………………….…..215. Maruti Suzuki’s key Success factors………………………….236. Maruti Suzuki’s Brand Equity………………………………….247. Quality certificate of Maruti Suzuki……………………..…….258. Objective of the study………………………………………….2610. Literature Review………………………………………….….2711. Research Methodology………………………………………34 12. Data Analysis & Interpretation……………………………....3513. Discussion & Implication……………………………………..4214. Recommendations……………………………………….……4415. Conclusion……………………………………………………..4516. References ……………………………………………….…...4617. Appendix………………………………………………………..47

Acknowledgement

3

First of all I would like to thank Inc, ASIM for giving me a great opportunity to work on my semester project work.

Then I would like to thank my MT Supervisor Dr. Dipti Sethi, for guiding me through my research project. Her encouragement, time and effort are greatly appreciated. It was a truly wonderful learning experience.

I would also like to thank Mr. Sanjay patel (Sales executive of Maruti Suzuki Showroom of Asarwa branch) for their valuable information on Maruti Suzuki and current market trend in automobile industry. Once again my gratitude to all Showrooms representatives of Maruti Suzuki for their kind co-operation.

Lastly I would like to thank all my friends and respondents who offered their opinions and suggestions through the survey that was conducted by me in Ahmadabad.

Abbreviation

4

MASSs - Maruti Authorized Service Stations, MSMs - Maruti Service Masters.MUV – Multi Utility VehiclesSUV – Small Utility VehiclesMGA - Maruti Genuine AccessoriesCSI – Consumer satisfaction IndexEMI – Equitable Monthly Installment ABRS - Air Bag Restraint SystemGDP – Gross Domestic products BHP - Brake HorsepowerKM/H - Kilometers per HourLCD - Liquid Crystal DisplayP/B - Power Bakes

Abstract

In this project I am trying to find the marketing Strategies of Maruti Suzuki and its effect on

5

customer. I am also trying to study the sales trend followed by Maruti Suzuki. In this study I had followed different method to find and analyze the data we are using primary data as well as secondary data. I had used the questionnaire method to study the Maruti sales trend we had asked question to dealers. In Ahmedabad I have visited five showroom of Maruti Suzuki them and tried to know that what are the cars which they are selling more what is the sales trend of Maruti which kind of cars customer is demanding and why. What modification should Maruti make in its cars to take an edge over competitors?

The Indian Automobile Market is expected to grow at a CAGR of 9.5 percent amounting to Rs. 13,008 million by 2010. The Commercial Vehicle Segment has been contributing to the automobile market to a great extent.

Many foreign companies have been investing in the Indian Automobile Market in various ways such as technology transfers, joint ventures, strategic alliances, exports, and financial collaborations. The auto market in India can boast of attractive finance schemes, increasing purchasing power, and launch of the latest products.

Maruti Suzuki is India’s No. 1 customer satisfaction car company. Its sale is more than 50% of care of Indian car market. But now it is getting a good

6

competition with other new car company and foreign companies and its sales is going down because other car companies are trying to present different types of new car in different segment.

\

Introduction

7

Indian Automobile Sector - A Booming Market"

De-licensing in 1991 has put the Indian automobile industry on a new growth track, attracting foreign auto giants to set up their production facilities in the country to take advantage of various benefits it offers. This took the Indian automobile production from 5.3 Million Units in 2001-02 to 10.8 Million Units in 2007-08. The other reasons attracting global auto manufacturers to India are the country’s large middle class population, growing earning power, strong technological capability and availability of trained manpower at competitive prices. These are the major findings of our new report, "Indian Automobile Sector - A Booming Market”

In 2006-07, the Indian automotive industry provided direct employment to more than 300,000 people, exported auto component worth around US$ 2.87 Billion, and contributed 5% to the GDP. Due to this large contribution of the industry in the national economy, the Indian government lifted the requirement of forging joint ventures for foreign companies, which attracted global to the Indian market to establish their plants, resulting in heightened automobile production.

The Indian automobile market is currently dominated by two-wheeler segment but in future, the demand for passenger cars and commercial vehicles will increase with industrial development. Also, as India has low vehicle presence (with passenger car stock of only around 11 per 1,000 population in 2008), it possesses substantial potential for growth.

Current scenario of automobile sector in India

According to Bloomberg L.P., in 2009 India surpassed China as Asia's fourth largest exporter of cars.

8

In 2009 estimated rate of growth of India auto industry is going to be 9 percent. Auto industry in India has been hit hard by ongoing global financial recession. Sales figures of India automobile industry for December 2008 have shown devastating after effects of global financial slowdown. However, there is still hope for automobile industry of India in 2009 as there are certain factors working in its favor. India is blessed with a middle class, which is getting economically stronger with every passing day. This class is being touted as potential consumers for India auto industry in years to come.

India automobile market is likely to be in good shape in 2009. Much of this optimism results from renewed interest being shown in India auto industry by reputed overseas car makers. Nissan Motors, which is a well known Japanese car making company, regards India automobile market as a global car manufacturing hub for future.

The Indian Automobile Market is expected to grow at a CAGR of 9.5 percent amounting to Rs. 13,008 million by 2010. The Commercial Vehicle Segment has been contributing to the automobile market to a great extent. Many foreign companies have been investing in the Indian Automobile Market in various ways such as technology transfers, joint ventures, strategic alliances, exports, and financial collaborations. The auto market in India can boast of attractive finance schemes, increasing purchasing power, and launch of the latest products.

India domestic auto industry

India domestic auto industry has been passing through a tough phase in 2008 and such a trend is supposed to continue in 2009 as well. Leading members of India auto industry have forecast a difficult path in 2009. Shinzo Nakanishi, managing director of Maruti Suzuki, has said that 2009 would present them with a number of challenges. fitted greatly from China

9

auto insurance policies. One example is Huatai Insurance Co, which generates 70 percent of its income from these policies.

Key Players in automobile industry:

Maruti Suzuki TATA Hyundai Honda Ford Toyota Fiat Skoda Audi Mercedes Benz BMW Volkswagen Mitsubishi Mahindra

Cars by Price Range:

Under Rs. 3 Lakhs

Maruti 800, Alto, Omni, Reva

Rs. 3-5 Lakhs Ambassador Fiat Palio Hyundai Santro, Getz Chevrolet Opel Corsa

10

Maruti Zen, Wagon R, Versa, Esteem, Gypsy, Maruti Suzuki A-Star

Ford Icon & Fiesta

Tata Indica, Indigo XL, Indigo Marina

Rs. 5-10 Lakhs

Chevrolet Swing, Optra Magnum, Tavera

Hyundai Accent, Elantra Mahindra Scorpio Maruti Baleno Toyota Innova Tata Safari Mitsubishi Lancer, Mitsubishi Cedia Honda City ZX, Honda Jazz New Mahindra Bolero Hyundai Sonata Embera

Fiat Linea

Rs. 10-15 Lakhs

Toyota Corolla, Toyota Corolla Altis Ford Mondeo & Endeavour Chevrolet Forester Skoda Octavia & Combi

Honda Civic

Rs. 15-30 Lakh

Honda CR-V Maruti Suzuki Grand Vitara Terracan & Tucson Mitsubishi Pajero Audi A4 Opel Vectra Honda Accord Mercedes C Class

11

New Skoda Superb New

Toyota Camry

Rs. 30-90 Lakhs

Audi A6, A8 & Audi TT BMW X5, 5 Series & 7 Series Mercedes E Class, S Class, SLK, SL

& CLS-Class Porsche Boxster, Cayenne, 911

Carrera & Cayman S

Toyota Prado

Above Rs. 1 Crore

Bentley Arnage, Bentley Continental GT & Flying Spur

Rolls Royce Phantom

Maybach

Introduction of Maruti SuzukiMaruti Suzuki

Maruti is India's largest automobile company. The company, a joint venture with Suzuki of Japan, has been a success story like no other in the annals of the Indian automobile industry.

12

Today, Maruti is India's largest automobile company. This feat was achieved by the missionary zeal of our employees across the line and the far-sighted vision of our management.

Vision “The leader in the India Automobile Industry, Creating Customer Delight and Shareholder’s Wealth; A pride of India”

Mission: To provide a wide range of modern, high quality fuel efficient vehicles in order to meet the need of different customers, both in domestic and export markets.

Core Value Customer Obsession Fast, Flexible and First Mover Innovation and Creativity Networking and Partnership Openness and Learning

Their focus is on:

Building a continuously improving organization adaptable to quick changes

Providing value and satisfaction to the customer Aligning and fully involving all our employees, suppliers and

dealers to face competition Maximizing Shareholder's value Being a responsible corporate citizen

About Maruti Suzuki

At Maruti, they have a clear perspective on manpower. They see it as a unique resource, in the sense that optimal productivity of other resources depends largely on the way human resources are utilized. The basic philosophy of management that underlies the Maruti culture is that all employees of the company should be

13

molded into a team which then strives as one, to achieve commonly shared company goals and objectives. To make this philosophy tenable, the Company takes several initiatives. Inputs are sought from employees at all levels. They believe that everyone should contribute to the formulation of company policies, goals and objectives. Secondly, at Maruti, they encourage leadership in the best sense of the word. According to us, a leader is one who must be impartial, must have the ability to rise above his own subjectivity, and, most importantly, must practice what he preaches.

At Maruti They do not believe in the notion of organizational hierarchies. As a matter of fact, the management structure and systems in Maruti have been designed to promote decentralization of authority. Maruti has a horizontal management structure with only four functional levels of responsibility to facilitate quicker decision making.

Another focus area of the Maruti culture is the maintenance of a smoothly functioning communication network. Maruti believes that communication channels between labour and management cannot simply consist of having a labour representative on the Board of the Company. They have faith in the ability of labour to effectively participate in management and make constructive suggestions. To encourage this, they ensure that there is a thorough dissemination of information at all levels, through newsletters or via a letter from the Chief Executive to all employees.

SWOT Analysis of Maruti Suzuki

Strength

1. Brand Loyalty

14

2. Service and Distribution Network3. Japanese Technology

Weakness

1. Changing Customer Preferences.2. Appears Daddy’s Brand

Opportunities

1. Attraction of Youth.2. Increasing Middle Class Income.3. Export Small Cars.

Threats

1. Foreign Brands.2. Fuel Prices.

Marketing Strategy of Maruti Suzuki

They intend to continue to focus on the small car segment, while offering products in most segments of the Indian passenger car market. They aim to achieve their principal objectives by pursuing the following business strategies:

15

Maintain and enhance their product range: They intend to utilize Suzuki’s expertise in small car technology to produce new variants of their existing models and to upgrade their products with contemporary technology and features.

Increase reach and penetration: They plan to continue to utilize their extensive sales and service network to increase the reach, in terms of geographical spread, and penetration, in terms of sales volumes, of their products across India.

Increased availability of automobile finance: They continue to seek opportunities to expand the size of the Indian passenger car market, especially in the small car segment, through facilitating easy availability of automobile finance. To that end, they have recently entered into an agreement with the State Bank of India.

Secure repeat purchases by offering a “360 degree customer experience”: On the basis of their belief that securing repeat purchases from an existing customer requires less expenditure than acquiring a new customer, they aim to provide customers with a “one-stop shop” for automobiles and automobile-related products and services.

Continue to benchmark their manufacturing capabilities: They plan to continue to benchmark our manufacturing capabilities with the most efficient car manufacturing facilities of Suzuki and its subsidiaries.

Continue to reduce costs to offer more competitive products:Cost competitiveness has been, and continues to be, central to their strategy as the leading manufacturer in the small car segment to expand the size of the market by offering competitively priced, high quality products.

The components of this strategy are:

16

Higher levels of localization Vendor participation in cost reduction Cost reduction on warranties Reduction in initial investment cost Reduction in number of vehicle platforms Achieve further cost reduction through higher productivity

Lower cost of ownership:

Through their business strategies, they seek to reduce the consumer’s cost of ownership of their cars, which comprises the cost of purchase, the cost of fuel and maintenance, including spare parts and repairs, during the life of the vehicle, insurance, and resale value.

17

SALES NETWORK

Dealers:

They offer their products to the customer through a network of 178 authorized dealers with 243 sales outlets across 161 cities. They believe that this is the largest network of dealers amongst car manufacturers in India. Their dealers employed more than 3,500 sales executives. They are linked to their sales network through their secure extranet-based information network. The sales of their spares, accessories and automobile-related services such as insurance and finance serve as additional sources of revenue for our dealers. They believe that the availability of these related products and services at sales outlets also helps to attract customers to the outlets and promotes sales of their cars.

Agreements with dealers:

They generally appoint a limited number of dealers for a certain geographical territory. Their dealers provide services to customers such as pre-delivery inspection of vehicles, sales of cars, after sales service, supply of spare parts and other services that promote sales of cars within the territory for which they are appointed. They have the right to sell their products and services through other dealers or intermediaries in any territory, whether or not one of their dealers is already established in that territory. Their dealers are required to maintain their outlets in accordance with their specifications and employ well-trained sales staff.

Their agreements with their dealers usually have terms of five years. These agreements are generally renewable for successive terms of three years, by mutual agreement. The agreements typically permit termination by either the dealer or them with six months’ prior notice.

Enhancing dealer performance:

18

Their central office in Delhi, their regional offices and their area offices monitor and assist their dealer network. They have nine regional offices, five area offices and 187 sales and marketing personnel. They follow the performance of their dealers and frequently suggest improvements. In order to assist their dealers in enhancing their performance and capabilities, they have introduced a concept of “Balanced Scorecard”. Using this tool, they seek to measure the performance of a dealership in several areas of operations, including sales, service, spares and accessories, financial management and management systems. They reward dealers who perform well on the “Balanced Scorecard” with a cash payment at the end of the fiscal year. They believe that the “Balanced Scorecard” serves as an effective incentive for dealers to enhance their performance.

Dealer training:

They have established standard operating procedures, showroom ambience and service quality standards for dealerships. They provide periodic training through their training centres located at their manufacturing facility and at Chennai, Kolkata, Guwahati and Pune. They have trained more than 2,600 and 3,400 dealer sales personnel. Their subsidiary, True Value Solutions Ltd., provides value-added services, such as manpower recruitment and training, to their dealers.

AFTER-SALES SERVICE

19

Network

As on date there are 342 Maruti dealer workshops and 1,545 Maruti Authorised Service Stations, or MASSs, covering 898 cities in India. In addition, 24-hour mobile service is offered in 38 cities under the brand “Maruti On-road Service”. They intend to extend this service to an additional 25 cities over the next three years. As a benchmark for dealers with respect to service quality and infrastructure facilities, they have launched service stations under the brand “Maruti Service Masters, or MSMs, in three locations in India. They have service stations on 30 highways in India under the brand “Express Service Stations”.

To promote sales of their spare parts and the availability of high quality, reliable spare parts for their products, they sell spares under the brand name “Maruti Genuine Parts”, or MGP. These are distributed through their dealer network and through authorised sellers of their spare parts, to whom they refer as stockists.

Many of their MASSs are at remote locations where they do not have dealers. In order to increase the penetration, in terms of sales volumes, of their products in these remote areas, they are exploring opportunities to integrate some of the MASSs into the sales process in order to increase sales of their cars and related products and services such as spares and accessories, insurance and financing.

Genuine Accessories

They have also entered the business of marketing car accessories under the brand name “Maruti Genuine Accessories”, or MGA, through their dealership network. They seek to provide customers with the opportunity to customize their vehicles with accessories such as music systems, security systems, car-care products and utility products.

Warranty and Extended Warranty Program

20

They offer a two-year warranty on all their vehicles at the time of sale. Their dealers are required to address any claim made by a customer, in accordance with practices and procedures prescribed by them, under the provisions of the warranty in force at that time. The dealers subsequently claim the warranty cost from them. They analyse warranty claims from dealers and either claim the cost from vendors, in the case of defective components, or bear the cost ourselves, in the case of manufacturing defects.

They offer an extended paid-warranty program marketed under the brand, “Forever Yours” for the third and fourth year after purchase. They have entered into arrangements with insurance companies to cover the costs of warranties offered under this program. The extended warranty program is intended to maintain the dealer’s contact with the customer and increase the revenue generated from sale of spares, accessories and automobile-related services. An effort is made during the period of the extended warranty to encourage the customer to exchange his existing Maruti car for a new Maruti car, or upgrade to a new Maruti car.

WHY GO FOR MARUTI SUZUKI?

21

The Quality Advantage

Maruti Suzuki owners experience fewer problems with their vehicles than any other car manufacturer in India (J.D. Power IQS Study 2004). The Alto was chosen No.1 in the premium compact car segment and the Esteem in the entry level mid - size car segment across 9 parameters.

The J.D. Power APEAL Study 2004 proclaimed the Wagon R no. 1 in the premium compact car segment and the Esteem No.1 in the entry level mid - size car segment. This study measures owner in terms of design, content, layout and performance of vehicles across 8 parameters.

A Buying Experience Like No Other

Maruti Suzuki has a sales network of 307 state-of -the-art showrooms across 189 cities, with a workforce of over 6000 trained sales personnel to guide our customers in finding the right car. Our high sales and customer care standards led us to achieve the No.1 nameplate in the J.D. Power SSI Study 2004.

Quality Service across 1036 Cities

In the J.D. Power CSI Study 2004, Maruti Suzuki scored the highest across all 7 parameters: least problems experienced with vehicle serviced, highest service quality, best in-service experience, best service delivery, best service advisor experience, most user-friendly service and best service initiation experience.92% of Maruti Suzuki owners feel that work gets done right the first time during service. The J.D. Power CSI study 2004 also reveals that 97% of Maruti Suzuki owners would probably recommend the same make of vehicle, while 90% owners would probably repurchase the same make of vehicle.

One Stop Shop

22

At Maruti Suzuki, you will find all your car related needs met under one roof. Whether it is easy finance, insurance, fleet management services, exchange- Maruti Suzuki is set to provide a single-window solution for all your car related needs.

The Low Cost Maintenance Advantage

The acquisition cost is unfortunately not the only cost you face when buying a car. Although a car may be affordable to buy, it may not necessarily be affordable to maintain, as some of its regularly used spare parts may be priced quite steeply. Not so in the case of a Maruit Suzuki. It is in the economy segment that the affordability of spares is most competitive, and it is here where Maruti Suzuki shines.

Lowest Cost of Ownership

The highest satisfaction ratings with regard to cost of ownership among all models are all Maruti Suzuki vehicles: Zen, Wagon R, Esteem, Maruti 800, Alto and Omni.

We are proud to have the lowest cost of operation/km (among petrol vehicles) - the top 5 models are all Maruti Suzuki models : Maruti 800, Alto, Zen, Omni and Wagon R.

ManufacturerFeb-2009 Feb-2008 Chang

eMaruti Suzuki 70,625 59,311 +19.1%Mahindra & Mahindra

14,720 12,562 +17.2%

Mahindra Renault 1,008 2,751 -63.4%Hyundai 21,215 14,600 +45.3%Tata Motors 19,039 18,766 +1.5%General Motors 4,921 5,563 -11.5%Honda 5,579 3,774 -47.8%

23

Maruti Suzuki’s Key Success factors

A. Technology-Related KSF’s

1. R&D facilities and Japanese collaboration.2. Suzuki internationally known for Small cars3. Launch of World class quality cars like A- STAR and SPLASH

B. Manufacturing-Related KSF’s

1. Designing cars best suited for Indian market.2. Cost leadership in the market due to efficient value chain and manufacturing plants.

C. Distribution-Related KSF’s

1. The record sales performance was affected through the Company's vast dealership network.2. Car sales outlet increased to 600 covering 393 cities.3. There are 265 ‘Maruti True Value’ outlets spread across 166 cities, which are engaged in the sale, purchase and exchange of pre-owned cars.

D. Marketing-Related KSF’s

1. Full range of cars- from entry level Maruti 800 & Alto to stylish hatchback A- star, Swift, Wagon R, Estillo and sedans DZire, SX4 and Sports Utility vehicle Grand Vitara.2. Communication through advertisement is totally to the need of Indian culture3. Pan-India service network.

E. Skills and Capability -Related KSF’s

1. The service network had a total of 2,628 service outlets including dealer workshop as well as Maruti Authorized Service Stations, covering 1220 cities.

24

Maruti Suzuki’s Brand Equity

A. Authorized Service Stations

Maruti is one of the companies in India which has unparalleled service network. To ensure the vehicles sold by them are serviced properly Maruti has 2628 listed Authorized service stations and Express Service Stations on 30 highways across India.

B. Maruti Insurance

This service started as a benefit or value addition to customers and was able to ramp up easily. By December 2005 they were able to sell more than two million insurance policies since its inception.

C. Maruti Finance

To promote its bottom line growth, Maruti launched Maruti Finance in January 2002.Maruti claims that its finance program offers competitive interest rates to its customers, which are lower by 0.25% to 0.5% from the market rates.

D. Maruti True Value

Maruti True service offered by Maruti Udyog to its customers. It is a market place for used Maruti Vehicles. One can buy, sell or exchange used Maruti vehicles with the help of this service.

E. AccessoriesMaruti started a new initiative under the brand name Maruti Genuine F. N2N Fleet ManagementN2N is the short form of End to End Fleet Management. G. Maruti Driving SchoolAs part of its corporate social responsibility Maruti Udyog launched.

Quality for sure:

25

At Maruti, our approach to quality is in keeping with the Japanese practice--"build it into the product". Technicians themselves inspect the quality of work. Supervisors educate and instruct technicians to continually improve productivity and quality. The movement of quality indicators is reviewed in weekly meetings by the top management.

In 2001, Maruti Suzuki India Ltd became one of the first automobile companies anywhere in the world to get an ISO 9001:2000 certification.

ISO 9001:2000 CERTIFICATION

Objectives of the study

26

The main objective is to study the different marketing strategies of Maruti Suzuki.

To know the current market position of Maruti Udyog Limited. To Study the Consumer Behavior. To Study the Brand preference of the consumer. To Study the rapid changing perception of consumers towards

small segment cars. To Study the satisfaction level with after sales services of

company. To make suggestions to the company to improve the level of

satisfaction among customers. To know the price effect on the purchase of the cars. A

comparative study on level of customer perception towards Maruti Suzuki Company to other automobile Companies.

To study recognize the sales trend and segmentation of Maruti Suzuki.

Along with this we are trying to assess company’s performance compared with that of the competition.

To know the way Maruti has segmented its cars To know the areas in which the dealers satisfy their customer

and the areas that they do not satisfy. To come out with the conclusion and recommendations based

on the analysis and interpretation.

Literature review

27

Maruti Suzuki raises prices of sum existing model

Maruti Suzuki, India's top carmaker, said on Saturday it has raised the prices of some of its models to recover the rise in input costs. It said the price increases, effective immediately, varied from 0.12% to 1.9% with an average price rise of 0.6%.

Maruti Suzuki India Limited announced a marginal increase in the price of its models, excluding recently launched Eeco, Swift (Petrol) and Gypsy models. The price increase varies from 0.12 per cent (Ritz VDi) to 1.90 per cent (Dzire LXi). For the affected models, the average increase in prices is around 0.6 percent.

The price increase is to partly recover the increase in the input costs arising out of raw material costs over the past one year. For some models the increase in the costs are being absorbed by the company, in the light of market situation.

There was no increase in prices of its recently launched five-seater multipurpose vehicle Eeco, the petrol version of its Swift hatchback and its Gypsy utility vehicles, it said in its statement. "For some models the increase in the costs are being absorbed by the company, in the light of market situation.

To maintain its market share, the company plans to aggressively develop its marketing network as well as work on reducing the cost of producing cars. These cost savings could be passed on to customers, Nakanishi indicated.

The company is already working with vendors to reduce costs with the Alto hatchback and may pass these benefits on in the coming months. The Alto, India’s largest selling car, sells over 20,000 units a month.

Maruti Suzuki Plans for Capacity Expansion

28

Not content with its leadership position in the small car market, Maruti Suzuki India Ltd plans to expand its product range to other segments, including multi-utility vehicles (MUVs), as it looks towards its next phase of growth and seeks to tackle increasing competition.

At the 10th Auto Expo, India’s biggest car maker unveiled new models on Tuesday and laid out a road map for capacity expansion. Maruti, in which Japan's Suzuki Corp has a 54.2%, sells one of every two cars in India.

Designed in India: Maruti Suzuki managing director Shinzo Nakanishi unveils the concept version of an MUV that is capable of carrying at least seven people.

The company is producing at full capacity at its plants in Gurgaon and Manesar in Haryana and expects to cross one million units in domestic sales and exports this fiscal year 2009-10, managing director Shinzo Nakanishi told journalists.

With the Indian car market forecast to double to three million units by 2015, Maruti Suzuki plans to raise its capacity to 1.5 million units to defend its leadership position of about 50% of India’s passenger car market. Most of the expansion would take place at the Manesar facility. Nakanishi expects exports to stay flat at about 150,000 units per year by 2015.

[Tuesday December 29, 2009] Source: Indian Express, Finance

Competition will increase in small car segment

29

Car makers, including Toyota Motor Corp., Honda Motor Co. and General Motors Corp., are seeking to challenge Maruti Suzuki’s dominance and increase their share of the Indian market by introducing a slew of small car models, stepping up the pressure on the Indian auto maker to devise new strategies to power growth.

Maruti Suzuki unveiled the concept version of an MUV capable of carrying at least seven people. Named the R3, the MUV has been wholly designed by its research and development facilities in India.

With this, the company has plugged a crucial gap in its product portfolio and would be venturing into a segment that accounts for 13% of car sales in India. The R3 will be pitched against the Toyota Innova and the Mahindra Xylo—both runaway successes for their makers. MUV sales in India rose 40% to 91,782 units in the first eight months of this fiscal year 2009-10.

Initial reactions to the R3 were positive. “It’s an excellent product for the Indian market, where you need to pack in a lot of people in very little space,” said Paul Blokland, director of Segment Y, an automotive intelligence firm.

The firm hinted that the R3 would be put into mass production soon. “Typically it takes about 24 months to take a car from the concept stage to production,” said I.V. Rao, managing executive officer (engineering) at Maruti Suzuki.

Maruti Suzuki’s current stable of small cars would see models being refreshed at periodic intervals and new variants being added. In the last 15 months, Maruti has cemented its position in the small car market with the launch of the Ritz and A-star hatchbacks.

Still, Nakanishi admitted 2010 would be a tough year as the company would have to fight hard to defend its market share. “This is not going to be easy as there are many car makers coming in,” he said.

Volkswagen, Suzuki tie up to replace Alto cars

30

Volkswagen AG (VW) plans to launch the Polo hatchback in March. Toyota expects the Etios, its small car unveiled on Monday, to hit the streets in December, while Honda is targeting 2011 for its small car launch.

After Tata Motor's Nano car, India can be prepared to have Rs 2-2.5 Lakh car from Germany's Volkswagen and Suzuki Motor, a media report said. Volkswagen and Suzuki Motor, parent of Maruti Suzuki, has tied up to develop new small cars for the Indian market which will be a replacement of Alto model.

"At some point we will need a replacement for the Alto. That price range is the entry level for Indian customers today, so we can't leave that segment open," RC Bhargava, chairman of Maruti Suzuki.

As per the deal signed by the two firms this week, Volkswagen will buy a one-fifth stake in Suzuki for USD 2.5 billion, considering the Suzuki Motors expertise in small cars.

While spokesman for Maruti Suzuki was unable for comment, spokesman for Volkswagen said that the move by the firm was not intended to compete with Nano car.

"Volkswagen will be greatly interested in a car below the price segment of the Up. And that is something we will need to check in our future together with Suzuki," said Fabian Mannecke, the spokesman for Volkswagen.

[Saturday, January 16, 2010] Source: The Hindu Business Line

Maruti Suzuki launches Eeco

31

(All-new spacious family car to sport new 1,200 cc engine, transmission system)

Having been specially designed for India, the Eeco has a superior suspension which allows for a smooth and comfortable ride on rough Indian roads. All seats, front, middle or rear are equally convenient to access and individually designed to be comfortable. Eeco is available with air-conditioning option to combat the extreme climates in the country. These features make Eeco the most suitable vehicle for large Indian families that want a vehicle for both – work and family outings and fun together.

Eeco represents the growing expertise of Maruti Suzuki engineers to conceive, design and produce vehicles in India. This is also in line with parent Suzuki Motor Corporation’s vision of turning India into a global hub for small car design.

Focus on ‘A Big Car’ with space and comfort for family Superior functionality and drivability Flexi-seating with 5 and 7 seater options Roomy interiors Sliding doors add to ease entry and exit Air-conditioning Range of six exhilarating colours BS-IV compliant Superior, in-house developed 1200 cc petrol engine with 73 bhp power First-time ever DSA transmission Petrol Fuel efficiency 15.1 kmpl Roomy interiors Sliding doors add to ease entry and exit Air-conditioning

Maruti’s Sales Up in October-November 2009

32

Maruti Suzuki, the leading Indian small car manufacturer, has registered net sales of 85,415 vehicles for the month of October witnessing a 32% surge from the 64,490 units sold during the similar period last fiscal. The domestic sales of the automobile major stood at 71,551 units in October, logging a 21% surge from the 59,127 units sold off during Oct 2008. Meanwhile Maruti has witnessed a 160% increase in its exports to stand at 13,864 units during Oct as against the 5,363 units logged in during similar period of 2008-09 fiscal.

Car giant Maruti Suzuki’s sales for November have increased by 84% over the same month last year when the firm was hardest hit due to a slowdown in demand. The sales for November stood at 87, 807 units as against 47, 704 units for last November.

"November 2008 was an exceptionally low sales month due to impact of economic slowdown. This year's November sales were, however, up 17.1 percent from that in November 2007," the company said in a statement. For the period April-November, sales grew 29.4% over the same period of last year to 646,139 units. Maruti's sales in the compact car (A2) sector containing Alto, Wagon-R, Zen, Swift, Ritz and A-Star grew 60% over November 2008, it said. The company sold 56,005 units in this sector as against 34,976 units last year. Sale of models in its mid-sized (A3) sector containing SX4 and Dzire increased 46.3% to 8,741 cars. Exports were at 11,448 units.

[New Delhi - 08/01/2010] Source: The Economic Times

Maruti Suzuki Q1 Net Profit for 2009-10 Up By 25%

33

Maruti Suzuki, the leading manufacturer in Indian small car segment, has reported a 25.3% increase in net profits to Rs.583.5 crore for the quarter ended June 30 compared to Rs.465.9 crore it earned in the corresponding period the previous fiscal. Net sales grew 34% to Rs.6, 340 crore in the quarter under review compared to the year-ago period.  "Net profit growth was helped by an easing of commodity prices, sales mix moving in favor of higher end models and favorable foreign exchange realizations," the company said in a statement.  "Further, the growing share of higher end models in total Company sales also contributed to the growth in Net Sales during the quarter," it said.  The car maker posted total sales of 226,729 units, an increase of 17.7 percent for the quarter. This included exports of a record 29,314 units, representing a 134.7% growth over the same period of the last fiscal.  "The positive response to new models and continued focus on tapping new market segments enabled the company to achieve near double digit volume growth and enhanced market share," the statement added.

34

Research Methodology

To achieve the objective of study the data has been collected from various primary and secondary sources.

1. Primary data2. Secondary data

Primary data: The questionnaire was prepared for Consumer profile, Satisfaction level with the current Automobile Company on the basis of return.

Questionnaire method. Direct interview method

Secondary data: This secondary information has been collected from various magazines, journals, reports, internet, government publications etc.

Sampling Design

Population: AhmedabadSample Size: Population of 100Sample Technique: Convenience Sampling

Sampling Unit: Upper-middle and middle class in Ahmedabad

Limitations

This research is limited to only surroundings of Ahmedabad. Time is restricted to only 16 weeks.

The data is to be collected from the customers and some of the managerial level people and electronic media it may be biased because they don’t have time to answer.

Data Analysis & Interpretation

35

Q- 1. Which Company’s car do you own?

company No. of RespondentsMaruti 38

Hyundai 23Tata 12

Honda 6Other 21Total 100

Interpretation:Interpretation:

It is very clear from the survey that Most of the respondents (38%) have cars of Maruti Suzuki because Maruti is providing very wider product portfolio than other competitors. So, customers have option to choose a car as per their family, status and affordability.

After Maruti Suzuki, 23% respondents have Hyundai cars because of popularity of their models like i10, i20, Santro and Accent.

Q.2 Have you ever purchased any car of Maruti Suzuki?

36

Maruti38%

Hyndai 23%

Tata12%

Honda6%

Other21%

Maruti Hyndai Tata Honda Other

Response No. of Respondents

Yes 60

No 40

Total 100

Interpretation: Interpretation:

Of the sample size of 100 surveyed respondents 60% of the respondents has purchased car of Maruti Suzuki.

40% of the respondents have never bought the car of Maruti or they have car of another company like Hyundai, Tata, and Honda etc.

Q- 3.Which model of Maruti Udyog you have own?

Model of the cars No. of Respondents

Maruti 800 9Maruti Alto 3Wagon R 13

37

Swift 7

Esteem 2Other 4Total  38 

Interpretation:

It is clear from the above diagram that the Model Wagon R and Maruti 800 is the most selling model because it is very economical & convenient for small user.

After that Swift and Swift DZire is also very popular in the market but it is not affordable compare to Wagon R and Maruti 800.

Q 4. Who motivates you to buy the car?

Factors No. of RespondentsYour Family 30Peer Group 17

Society 12Status 25

Life Style 14

38

Culture 2

Total 100

30

17

12

25

14

2

0

5

10

15

20

25

30

YourFamily

PeerGroup

Society Status LifeStyle

Culture

Series1

Interpretation:

It is found that amongst 100 respondents 30% are influence to buy car from their family and 25% are buying the cars to show their status.

17% are motivated their Peers and friends group and 14% are own cars to show their Life style.

Q- 5. Which is the most important feature you look in your Cars?

Product Features No. of Respondents

Fuel Efficiency 22

Look 17

Comfort 11

Price 30

39

Engine Power 8

Resale Value 12

Total 100

Interpretation:

It is clear from the diagram that most of the customers which I have surveyed are (52%) first looking for price and Fuel Efficiency before purchasing a car.

Some of the customer also given priority to the Comfort, Resale value,, and Look of the car.

Q-6. According to you who provide the better after sales services and spare parts?

Company No. of RespondentsMaruti 45

Hyundai 14Tata 25

Honda 11Other 5Total 100

40

Interpretation:

From the above diagram it is clear that Maruti provides the better after sales services and spare parts.

According to survey, Hyundai has greater market share compare to Tata but Tata is Ahead of Hyundai in terms of providing better after sales service, spare parts and maintenance.

Q-7. How frequently you change your car?

Years No. of Respondents1-3 years 153-5 years 325-7 years 43

7-10 years or more 10Total 100

41

Interpretation:

It is found that amongst 100 respondents 43% have a philosophy to change their car only after use of 5 years.

Interestingly, 32% wants to change their car just after 3 to 5 years and 10% Respondents said that they will remain with the same car at least for 7 to 10 years.

Discussion of ImplicationDiscussion of Implication

It has really been a great job of the research to present the results in the immaculate way so that the purpose for which whole of the research has been done must be fulfilled. And also the researcher like a traveler who likes to tabulate all the important landmarks encountered in the way, would also like to tabulate and go in for in-depth study of the data collected for the purpose of meeting the research objective.

In the light of the specified objectives of the research study and above discussion along with the analysis of the data collected following was interpreted from the data found from the study undertaken:

42

Most of the people of India do not have cars. Only 30 %

(approx.) of India has cars. Most of the car users are of small cars. The customers of India prefer family car than luxury car.

The advertisement plays a major role in communicating to the customer information/specification about the product. Among the supporters of advertising the most preferred media of advertising in case of cars is the TV followed by the print-media together. This is clearly sign of increasing materialism and consumer due to the invasion of science in public life.

From the study, it was found that people are mostly motivated by user life style, peer group and status factors to buy the two-wheelers.

It was found that the customers are brand loyal to Maruti only, because of after sale services and less maintenance ability. So it is the just one time investment for the customer to be brand loyal. Different approachable service centers also contributories of the sale.

Finance is also the key factor to increase the sale. Attractive finance schemes enhance the sale into the market. Some 0% schemes, low EMI schemes are the attractions of the customers.

At present, Maruti focusing mainly on small customers. By providing low EMI and 0 % or low rate interesting schemes, it wants to expand the sale in to the market.

Some models i.e. Maruti 800, Alto; Wagon R etc. are famous in middle class users. They like these models as family car. Maruti Esteem, Swift and SX4 are the famous models in the range of luxury cars.

Maruti also expand its spare business. Service centers are opened in small cities as well as in the small towns. These

43

are approachable for the residing people in small towns. This is also the major factor of gaining fame in small users.

Maruti also has competitive advantage in the price. Some lower range models are very popular in the middle class users.

Fuel Efficiency, Style, Comfort, Engine power, Resale value are also the favorable factors for Maruti Udyog Limited. Maruti Engines are termed best engines in the automobile market. Resale value of Maruti product is highest in the market. Maruti car is quite very easy to sale into the market.

Various schemes i.e. Discount, free accessories, free service facilities are also helpful to increase the sale potential of the Maruti.

SuggestionsSuggestions

Success of Maruti Udyog Limited assures that ad campaign has a lot to do with their success. People’s response definitely conveys that advertisement today definitely is a force to reckon with and utmost importance has to be given to them to assure success of a firm.

Today the prices of petrol are increasing speedily. Company should manufacture more & more verities of Diesel, Gas engine vehicle.

Easy Finance scheme should launch more and more. Because easy finance is most competitive tool to increase the sale.

44

Proper service facility is also the key factor, which contributes

in the increment of sale. A company can increase its sale by providing good & proper service facility. In this case, Maruti is the leading company.

Company should manufacture the car model as per the requirement of the customer. Customer satisfaction is the pivot of the economy. So, company should concentrate on the satisfaction level of the customer.

When it comes to increasing reputation or creating brand image for a car, TV should be given superiority than any other medium what so ever..

Sports people were found to be of the highest credibility by most of the people. So, they should be used more and more in advertisement of Cars.

People are mostly attracted by patriotism theme and cultural theme in ads. So, this should be used exclusively to achieve greater success as is evident by the success of Maruti Udyog Limited already.

Conclusion

It can clearly be said on the basis of all the study conducted so far that advertisement play a major role in promoting among the customers. It is immaterial that customers are from which family status or background. All of them go in for advertisement when it comes to the purchase decision making of car or a given product.

Advertising that distribute information to consumers that can help them make better economic decisions than they would in absence of that information provides a positive economic service. Of course, any advertising that, by deception or by any other means, induces consumers to make sub optimal decisions provides a corresponding negative economic service. Some advertising is of more value than others along this dimension.

45

It is unreasonable to separate the economic and social factors to increase the sale. It is clear now that advertising enhances buyer decision-making by providing information and supporting brand names. It provides and efficient means to firms to communicate with their customers. By generating various product associations, advertising can add to the utility of a buyer receives from a product. It supports the various media has the largely unrealized potential to reduce extremes in the levels of consumer buying.

Customer satisfaction is also the important factor, which affects the financial position & goodwill of the company. Customer demands are dynamic, but its consideration is necessary for every company to make existence into the market.

The price of a car is just one-third of what it cost you over its lifetime. Running and maintaining it make up the other two-thirds. Take into account resale value and its real cost becomes clear. Maruti Suzuki stands for value as much as it stands for performance.

References

WEBSITES

www.carwale.com

ww.marutisuzuki.com (http://www.marutisuzuki.com/newsroom.aspx)

www. Timesofindia.com (http://timesofindia.indiatimes.com/city/allahabad/Study-claims-to- help-business-plans-of-automobile industry/articleshow/5316886)

www.zigwheels.com

46

(http://www.zigwheels.com/maruti-suzuki)

ARTICLES:

Satish mehra, Indian Express, Bhopal, Tuesday December 29, 2009

Poonam vadia, The Economic Times, Friday, January 08, 2010.

Aman shah, The Hindu Business Line, Saturday, January 16, 2010

BooksKotler Philips, Marketing Management Analysis, Planning Implementation & Control Edition 1998.

MAGAZINES

Auto World

Over Drive

Auto India

APPENDIX

QUESTANARIES

NAME: _________________________ __________________

ADDRESS: ______________________ ____________________ ____________________________________________________OCCUPATION: ___________________ ___________________

Q- 1. Which Company’s car do you own?

Maruti

47

Hyundai Tata Honda Other

Q.2 Have you ever purchased any car of Maruti Suzuki?

Yes No

Q- 3.Which model of Maruti Udyog you have own?

Maruti 800 Maruti Alto Wagon R Swift Esteem Other

Q - 4.Who motivates you to buy the car?

Family Peer Group Society Status Life Style Culture

Q- 5. Which is the most important feature you look in your Cars?

48

Fuel Efficiency Look Comfort Price Engine Power Resale Value

Q- 6.According to you who provide the better after sales services and spare parts?

Maruti Hyundai Tata Honda Other

Q.7. How frequently you change your car?

1-3 years 3-5 years 5-7 years 7- 10 years or more

49

GRAND PROJECT

50

CONTENTS:Executive Summary

1) Introduction

2) Objective

3) Methodology

4) Analysis

5) Conclusions

6) Recommendations

PART ICOMPANY PROFILE

1) Brief introduction of a company

2) History(very brief) of the organization

PART IIPROJECT OVERVIEW

1) Introduction

2) Objective

3) Methodology

4) Analysis

5) Conclusions

6) Recommendations

PART III1) Appendix

2) Bibliography

51

3) References

4) Glossary

Annexure A (COVER PAGE)EmblemUniversity centre address and code No:Title of Project ReportBy(Your name)A Project report submitted in partial fulfillment of the requirements for the degree of Master of Business Administration of Sikkim Manipal University, INDIA.Sikkim-Manipal university of Health, Medical & Technological sciencesDistance education wingSyndicate house, Manipal – 576 104.

Annexure B (Student declaration)I here by declare that the project report entitled(Title)Submitted in partial fulfillment of the requirements for the degree of Masters of business Administration to Sikkim-Manipal University, India, is my original work and not submitted for the award of any other degree, diploma, fellowship, or any other similar title or prizes.

Place : (Name of candidate)Date:

Annexure C (Company Certificate)This is to certify that the project report entitled(Title)Submitted in partial fulfillment of the requirements for the degree of Masters of Business Administration of Sikkim-Manipal University of Health, Medical & technological sciences.

52

(student name)has worked under my supervision and guidance and that no part of this report has been submitted for the award of any other degree, Diploma, Fellowship of other similar titles or prizes and that the work has been published in any journal of Magazine.(Reg. no)

Certified(Company Guide’s Name and

Qualification)

OTHER NOTES: (FOR GRAND PROJECT)

Project report should be minimum of 120 pages.

Executive summary should be 2 or 3 pages.

For the presentation, Maximum seven slides should be used for your project & it should be in pen drive. Only one slide for the company’s details & another six slides should contain your research work, Recommendation & Conclusion.

Project report should be in 3 copies.

o One for the company that you have selected for

the GP.

o Second for the institute in hard copy as well as

in soft copy & soft copy must be in CD.

o Third for yourself.

53