Maruti Suzuki India Ltd.

61
2012 Ankit Singh 10BSPHH010104 Maruti Suzuki India Ltd.

Transcript of Maruti Suzuki India Ltd.

Page 1: Maruti Suzuki India Ltd.

2012

Ankit Singh

10BSPHH010104

Maruti Suzuki India Ltd.

Page 2: Maruti Suzuki India Ltd.

2 Maruti Suzuki India Ltd.

Table of Contents

Origin and genesis of Maruti Brand .................................................................................................................... 3

Maruti Udyog Ltd. .............................................................................................................................................. 3

Milestones ..................................................................................................................................................... 4

Journey Of Maruti Suzuki ............................................................................................................................... 5

Company Vision ............................................................................................................................................. 6

Company Values ............................................................................................................................................ 6

Board of Directors .......................................................................................................................................... 7

Current Scenario ............................................................................................................................................ 8

Company Name and Promoters ......................................................................................................................... 10

Promoters ..................................................................................................................................................... 10

Background of the Promoter –“Suzuki Motor Corporation” ........................................................................... 11

Brand Portfolio and Product Strategies .............................................................................................................. 13

Competitive Landscape for Passenger Vehicles in India ................................................................................. 13

Market Share by Segment for Passenger Vehicle Segment in India................................................................. 14

Maruti Brands ............................................................................................................................................... 17

Generic Strategies @ Maruti ......................................................................................................................... 24

Marketing Environment .................................................................................................................................... 26

Market Share of Automaker in India ............................................................................................................. 28

Domestic Car Sales Model Wise from 2004 to 2010 ....................................................................................... 30

Competitive Landscape ..................................................................................................................................... 40

BCG Matrix ................................................................................................................................................... 40

Porter Five Forces ......................................................................................................................................... 43

Macro Environment Analysis ......................................................................................................................... 45

Strategic Pricing Analysis ................................................................................................................................... 51

Brand Ambassadors .......................................................................................................................................... 55

Tag Lines for various Maruti brands: ............................................................................................................. 55

Brand Ambassadors ...................................................................................................................................... 55

Future strategy of Maruti .................................................................................................................................. 57

Profit and Loss Account (Forecasted) ............................................................................................................. 59

Risk Factors ................................................................................................................................................... 60

Outlook ........................................................................................................................................................ 61

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Origin and genesis of Maruti Brand

Maruti Udyog Ltd.

Maruti was incorporated in 1981 as a public sector company and started its business operations

in1983 in technical collaboration with Suzuki Motor Corporation Japan with the objective of

making small cars with latest technology and economic price offerings aiming at the

affordability by the masses.

If one may observe, the first phase of Maruti lasted from 1983 to 1995.This phase saw the

revolutionary launch of the initial models and unprecedented commercial success of Maruti. It

also saw the consolidation as well as unopposed growth of Maruti. The company enjoyed a

virtual monopoly with a market-share in excess of 80%. The first few models launched by the

Company viz. 800 and Omni still remain one of the bestsellers.

The period from 1996 to 2007 can be considered as the second phase of the Company which

also experienced the Globalization of Automobile Industry in India. The entry of global players

in the Auto industry in India meant that there was a very specific need for Maruti to change and

prepare to handle the global competition pro actively. Jagdish Khattar, Managing Director

Maruti Suzuki often says that "We thank our competitors for creating excitement and getting

the best out of us to offer better products and services to our customers".

This necessitated the Company to introspect, reassess and redefine its Business and

Organizational Strategy. It was important for the company to come out of its comfort zone and

fight to retain its leadership position. Both the media as well as the experts had at that time

written-off Maruti as another Government enterprise which will succumb to the pressures

of globalization. Inspite of the adverse business scenario and negative Industrial Relations

environment in the company, the entire Maruti team regrouped and emerged as a strong and

committed team and under the excellent leadership of Jagdish Khattar, who took over the reins

as the Managing Director in August1999" the company has undergone a big change both on the

business as well as on the Industrial Relations perspective and emerged as a winner retaining

55% of the market share with a healthy and growing bottom line. In 2003 Govt. of India decided

to disinvest its stakes in Maruti. The launch of Maruti's IPO which was one of the most

successful in India's history, restructured the company's Equity with 54% by Suzuki thus making

Maruti a Private Sector Corporate & a part of Suzuki Motor Corporation, Japan thus emerging

to be Maruti Suzuki India Ltd. That was the time that the company decided to drive another

major change initiative aimed at Organization and People Strategy.

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Milestones

1981- Maruti Udyog Ltd. was incorporated.

1982 - Steped into a JV with SMC of Japan.

1983 - Maruti 800, a 796 cc hatchback, India's first affordable car was produced.

1984- Installed capacity reached 40,000 units. Omni, a 796 cc MUV was in production.

1985 - Launch of Maruti Gypsy (970cc, 4WD off-road vehicle).

1986 - Produced 100,000 vehicles (cumulative production).

1987 - Exported first lot of 500 cars to Hungary.

1988 - Installed capacity increased to 100,000 units.

1992 - SMC increases its stake to 50 per cent.

1994- Produced the 1 millionth vehicle since the commencement of production.

1995 - Second plant launched, the installed capacity reached 200,000 units.

1996 - Launch of 24-hour emergency on-road vehicle service.

1997- Produced the 2 millionth vehicle since the commencement of production.

1998 - Launch of website as part of CRM initiatives.

1999 - Launch of Maruti - Suzuki innovative traffic beat in Delhi and Chennai as social initiatives.

2000 - IDTR (Institute of Driving Training and Research) launched jointly with Delhi government

to promote safe driving habits.

2001 - Launch of customer information centers in Hyderabad, Bangalore, and Chennai.

2002 - SMC increases its stake to 54.2 per cent.· Launch of Maruti Finance with 10 finance

companies in Mumbai.· Start of Maruti True value in Mumbai.

2003 - Production of 4 millionth vehicle.· Listed on BSE and NSE after a public issue

oversubscribed 10 times.

2004 - Maruti closed the financial year 2003-04 with an annual sale of 472122 units, the highest

ever since the company began operations 20 years ago.

2005 - The fiftieth lakh car rolls out in April, 2005.

2007 - Swift diesel launched. Manesar manufacturing Plant was inaugurated in Feb 2007.

2008 - World premier of concept A-star at 9th expo and launched in India.

2009 - Ritz has launched.

2010 - Alto K10 launched.

2011 - Maruti Ertiga a seven seater MPV R3 designed and developed in India.

2014 - Maruti XA Alpha will be launched in 2014.

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Journey Of Maruti Suzuki

Feb 1981 - The result, Maruti Suzuki India Limited (MSIL) was born in February 1981. Maruti

Suzuki started as a government company, with Suzuki as a minor partner, to make a

people's car for middle class India. Over the years, the company's product range has

widened and ownership has changed hands. A subsidiary of Suzuki Motor Corporation

(SMC) of Japan, the Maruti Suzuki India Limited headquartered in Delhi, running with 3

vehicle assembly plants at Gurgaon and 1 vehicle assembly.

1983 Dec 14, 1983 - Maruti completes 25 years Maruti Suzuki recently completed 25 years.

On December 14, 1983, the first Maruti 800, India's iconic car, rolled off the assembly line at

the company's Gurgaon plant. Since then, Maruti Suzuki has produced and sold around

2000 Nov 21, 2000 - Also, Suzuki is registered under trademark laws in various countries.

They hybrid trademark 'Maruti Suzuki' has been used on products of the joint venture

company in India. The Indore-based World Information Pages had claimed that the word

Maruti is name of an Indian god.

2002 Jan 25, 2002 - The rights issue will thus witness Suzuki becoming the largest

shareholder in Maruti. In return for this, the Government will get a renunciation premium

for forgoing its portion of the rights in favor of Suzuki as well as control premium for giving

up majority control in Maruti to the Suzuki.

2003 May 31, 2003 - Osamu Suzuki, chairman & CEO, Suzuki Motor Corporation, said:

"Maruti is controlled by Suzuki and will continue to be managed by Suzuki in India."

Responding to queries on the future control of Maruti, Suzuki said: "General Motors has a

20 per cent stake in Suzuki, Japan.

2004 May 2004 - Maruti Suzuki's all-conquering hatchback Swift has just added another

feather to its crown by becoming the fastest car model to reach the 3- lakh milestone.

Launched in May 2005, the sporty car achieved this feat in only three years and eight

months. On the occasion.

2005 June 26, 2005 - Maruti Suzuki's all-conquering hatchback Swift has just added another

feather to its crown by becoming the fastest car model to reach the 3- lakh milestone.

Launched in May 2005, the sporty car achieved this feat in only three years and eight

months.

2006 Nov 13, 2006 - The former India bureaucrat is managing director of Maruti Suzuki, the

Indian subsidiary of Suzuki Motor, the Japanese automaker's biggest operation outside of

Such are the current competitive dynamics facing Maruti Suzuki in one of the fastest-

growing auto markets in the world.

2007 Dec 11, 2007 - India's rapidly expanding automobile market is key for Suzuki, its

chairman has often said. Maruti Suzuki, in which Suzuki owns a 54.2% stake, is expanding its

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lineup and dealer network here. Suzuki also faces competition from global automakers like

Toyota.

2008 Apr 25, 2008 - `The best year': Mr S. Nakanishi, Managing Director and CEO, Maruti

Suzuki India Ltd, addressing a press conference in the Capital Announcing the results, Mr

Shinzo Nakanishi, the company's Managing Director, said, "The year 2007-08 was the best

year in the history of Maruti."

2009 Jul 1, 2009 - MUMBAI, July 1 (Reuters) - Maruti Suzuki, India's top car maker, said its

car sales rose 22.6 percent in June, up for the six month in a row, 'This month's export

numbers are the highest ever monthly export volume in the company's history,' Maruti said

in a statement on Wednesday.

2010 - Alto K10 launched.

2011 Oct, 2011 – Manesar – Maruti Suzuki, India’s top maker was gripped in serious Labour

unrest. During the first two days of the stand-off, MSIL dismissed five permanent workers. It also

suspended 26 permanent workers and discontinued the services of another 18 trainees. The plant

has about 2,500 workers, of which 950 are regular employees. Production has been severely

affected at MSIL’s first plant in Manesar since August 29 when the management prevented workers

from entering the unit without signing a 'good conduct bond' after alleged 'sabotage' and deliberate

quality compromise on cars.

Company Vision

“The leader in the Indian Automobile Industry, creating customer delight and shareholders’

wealth A pride of India.”

Company Values

• Customer Obsession

• Fast, Flexible and Fast Mover

• Innovation and Creativity

• Networking and Partnership

• Openness and Learning

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Board of Directors

Mr. R. C. Bhargava Mr.Shinz Nakanishi Mr. Manvinder Singh Banga

Chairman Managing Director

and CEO

Director

Mr. Amal Ganguli Mr. D. S. Brar Mr. Keiichi Asai

Director Director Director &

MEO(Engineering)

Mr. Osamu Suzuki Mr. Shuji Oishi Ms. Pallavi Shroff

Director Director & MEO

(Marketing & Sales)

Director

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Mr. Kenichi

Ayukawa Mr. Tsuneo Ohashi

Director Director and

Managing Executive

Officer (Production)

Current Scenario

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Company Name and Promoters

Maruti Suzuki is a private Limited company majorly holding being by Suzuki Motor Corporation.

Some contemporary believe that the company name “Maruti” is a Sanskrit word referring to

Hindu God Hanuman, son of Maruti, the Hindu Wind God Vayu.

Promoters

Name % of holding

Suzuki Motor Corporation 54.21

Life Insurance Corporation of India 8.79

HSBC Global Investment Funds A/C HSBC Global Investment Funds

Mauritius Limited 5.9

ICICI Prudential Life Insurance Company Ltd. 1.72

Bajaj Allianz Life Insurance Company Ltd. 1.45

LIC of India Market Plus 1.37

LIC of India Money Plus 1.19

The Master Trust Bank of Japan Ltd. A/C HSBC India A/c Equity Mother

Fund 1.02

HSBC Global Investment Funds A/C HSBC Global Investment Funds Bric

Equity 0.85

Life Insurance Corporation of India -Wealth Plus 0.8

Total 77.3

The Maruti Suzuki India Ltd. core promoter is Suzuki Motor which has a holding of 54.21% in

the company.

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Background of the Promoter –“Suzuki Motor Corporation”

In 1909, Michio Suzuki (1887–1982) founded the Suzuki Loom Works in the small seacoast

village of Hamamatsu, Japan. Business boomed as Suzuki built weaving looms for Japan's giant

silk industry. In 1929, Michio Suzuki invented a new type of weaving machine, which was

exported overseas. Suzuki filed as many as 120 patents and utility model rights. The company's

first 30 years focused on the development and production of these exceptionally complex

machines.

Despite the success of his looms, Suzuki realized his company had to diversify and he began to

look at other products. Based on consumer demand, he decided that building a small car would

be the most practical new venture. The project began in 1937, and within two years Suzuki had

completed several compact prototype cars. These first Suzuki motor vehicles were powered by

a then-innovative, liquid-cooled, four-stroke, four-cylinder engine. It featured a cast aluminum

crankcase and gearbox and generated 13 horsepower (9.7 kW) from a displacement of less than

800cc.

With the onset of World War II, production plans for Suzuki's new vehicles were halted when

the government declared civilian passenger cars a "non-essential commodity." At the

conclusion of the war, Suzuki went back to producing looms. Loom production was given a

boost when the U.S. government approved the shipping of cotton to Japan. Suzuki's fortunes

brightened as orders began to increase from domestic textile manufacturers. But the joy was

short-lived as the cotton market collapsed in 1951.

Faced with this colossal challenge, Suzuki's thoughts went back to motor vehicles. After the

war, the Japanese had a great need for affordable, reliable personal transportation. A number

of firms began offering "clip-on" gas-powered engines that could be attached to the typical

bicycle. Suzuki's first two-wheel ingenuity came in the form of a motorized bicycle called, the

"Power Free." Designed to be inexpensive and simple to build and maintain, the 1952 Power

Free featured a 36 cc, one horsepower, two-stroke engine. An unprecedented feature was the

double-sprocket gear system, enabling the rider to either pedal with the engine assisting, pedal

without engine assist, or simply disconnect the pedals and run on engine power alone. The

system was so ingenious that the patent office of the new democratic government granted

Suzuki a financial subsidy to continue research in motorcycle engineering, and so was born

Suzuki Motor Corporation.

In 1953, Suzuki scored the first of many racing victories when the tiny 60 cc "Diamond Free"

won its class in the Mount Fuji Hill Climb.

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By 1954, Suzuki was producing 6,000 motorcycles per month and had officially changed its

name to Suzuki Motor Co., Ltd. Following the success of its first motorcycles, Suzuki created an

even more successful automobile: the 1955 Suzuki Suzulight. Suzuki showcased its penchant for

innovation from the beginning. The Suzulight included front-wheel drive, four-wheel

independent suspension and rack-and-pinion steering—features not common on cars until

three decades later.

With headquarters at Hamamatsu, Japan, Suzuki has steadily grown and expanded its business

across geographies. During the post WW II period, the company's 'Power Free' motorized bike

earned a good reputation.

Post the success of its first motorized bike 'Power Free', the company launched a 125cc

motorcycle 'Colleda', and later launched its first lightweight car 'Suzulight' that marked the start

of Japan's automotive revolution. Each of these products were epoch-making in their own right

as they were developed and manufactured by optimizing the most advanced technologies of

that period.

Suzuki today offers its customers a wide range of motorcycles, automobiles, outboard motors

and related products such as generators and motorized wheelchairs.

Suzuki's trademark is recognized throughout the world as a brand that offers high quality,

reliable and genuine products. Suzuki stands behind this global symbol with a determination to

maintain this confidence in the future as well, never stopping in creating such advanced 'value-

packed' products.

Suzuki develops products for the new generation and changeable lifestyles, constantly creating

new technologies and applying them to products with affluent imagination. The team covers a

wide range of latest advances in energy, environment, electronics, communication, information

and control applications.

Financial highlights for FY 2009 (1 April 2009 - 31 March 2010)

Net sales ¥ 2.5 trillion (up 1.3% y-o-y)

Operating Income ¥ 80.0 billion (up 0.8% y-o-y)

Net Income ¥ 30.0 billion (up 3.8% y-o-y)

The company's consolidated profits exceeded those of the previous year with ¥79.4 billion of

operating income (103.2% y-o-y), ¥93.8 billion of ordinary income (117.8% y-o-y) and ¥28.9

billion of net income (105.4% y-o-y).

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Brand Portfolio and Product Strategies

Maruti Suzuki has divided its Product line into five segments as per the following table.

The Cars have also been divided into its various variants depending on the type of fuel used.

Some cars have been rolled out for use with both Petrol and Diesel. With rising prices of petrol,

there is a sharp demand for Diesel-run vehicles. Also, MSIL has two of its cars with LPG fitting

too. These are vehicles that run on LPG. Examples are M800 and Wagon-R. Maruti Suzuki Swift

comes in both petrol and diesel variants.

Given below is the product line to which various automakers have their presence. The criteria

for the segments are size and utility.

Competitive Landscape for Passenger Vehicles in India

Segment/

Company

A

ud

i

B

M

W

Fi

at

Fo

rd

G

M

Hindu

stan.

Ho

nda

Hyu

ndai

M

&

M

Ma

ruti

Suz

uki

Merc-

Benz

Nis

san

Sko

da

Tat

a

Mot

ors

Toy

ota

Volks

wagen

Vol

vo

Preci

sion

Cars

Passenger Cars

A1: Mini -

(Upto 3400

mm)

A2:

Compact

(3401-

4000mm)

A3: Mid-

size (4001-

4500mm)

A4:

Executive

(4501-

4700mm)

A5:

Premium

(4701-

5000mm)

A6: Luxury

(5001mm

& above)

Utility Vehicles

B1: Max

Mass upto

3.5 tonnes,

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Max Seat

<= 7

B2: Max

Mass upto

3.5 tonnes,

Max seats

Between 7

& 9

C: Max

Mass upto

3.5 tonnes,

Multi

Purpose

Vehicles

(MPVs) -

Van type

vehicles

The above table clears that Maruti caters to huge segments of dimensions in the passenger car

segment which also gives the company to cater to the varied needs and requirements of the

customers of India. The above report has been taken from CRISIL report.

Market Share by Segment for Passenger Vehicle Segment in India

Category

Segment/Sub-Segment Cumulative

Manufacturer 2007-08 2008-09

M1 Category : Upto 8 + 1 seats (Passenger carrier)

A: No. of seats including driver not exceeding 6

A1: Mini- (Upto 3400 mm) 100.0% 100.0%

Maruti Suzuki India Ltd.

A2: Compact (3401 -4000 mm)

Maruti Suzuki India Ltd. 58.1% 57.7%

Hyundai Motor India Ltd. 21.3% 23.9%

Tata Motors Ltd. 15.8% 12.6%

A3: Mid-size (4001-4500mm)

Maruti Suzuki India Ltd. 21.9% 31.4%

Honda Siel Cars India Ltd 18.0% 15.8%

Hyundai Motor India Ltd. 14.5% 13.1%

A4: Executive (4501-4700mm)

Toyota Kirloskar Motor Pvt. Ltd. 14.7% 24.0%

Honda Siel Cars India Ltd 39.6% 23.3%

Skoda Auto India Pvt. Ltd. 25.9% 21.9%

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A5: Premium (4701-5000mm)

Honda Siel Cars India Ltd 34.3% 49.4%

BMW India Pvt. Ltd. 13.7% 16.7%

Mercedes-Benz India Pvt. Ltd. 17.8% 14.0%

Toyota Kirloskar Motor Pvt. Ltd. 16.0% 6.2%

A6: Luxury (5001mm & above)

Mercedes-Benz India Pvt. Ltd. 65.5% 63.1%

BMW India Pvt. Ltd. 34.5% 36.9%

B: Max.Mass upto 3.5 tonnes

B1: Max Mass upto 3.5 tonnes, No. of seats including driver not exceeding 7

Mahindra & Mahindra Ltd. 49.9% 54.8%

Tata Motors Ltd. 20.5% 18.1%

Toyota Kirloskar Motor Pvt. Ltd. 15.5% 13.9%

B2: Max Mass upto 3.5 tonnes, No. of seats including driver exceeding 7 but not exceeding 9

Mahindra & Mahindra Ltd. 44.0% 42.8%

Toyota Kirloskar Motor Pvt. Ltd. 39.7% 31.4%

Maruti Suzuki India Ltd. 4.4% 10.4%

Tata Motors Ltd. 6.2% 8.6%

C: Max Mass upto 3.5 tonnes, Multi Purpose Vehicles (MPVs) - Van type vehicles

Maruti Suzuki India Ltd. 89.0% 73.1%

Tata Motors Ltd. 11.0% 26.9%

The above table is being taken from the data from SIAM ( Society of Indian Automobile

Manufactures) clearly shows that Maruti brand supremacy as a portfolio in A1 segment it is a

still has a monopoly till 2009. Even Tata Motors has come up with Nano brand with different

models but still has not matched up the Maruti 800.

In A2 segment it is the market leader with a market share of 57.7%. Maruti incurs maximum

profitability from this segment as this segment has the highest sales volumes.

With the launch Ertiga Maruti is able to achieve the market leader with market share of

31%.Omni as well as Gypsy have for long been the highest selling vehicles used as multi

purpose vehicles (MPV). Gypsy has always been a part of Indian Army and Police services which

has lead to huge sales figures.

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CARS Maruti Models

A1: Mini -

(Upto 3400

mm)

Maruti

800

3335mm

A2: Compact

(3401-

4000mm)

Alto K10 Estilo Swift Wagon R Eeco A-Star Alto Swift

Desire

3620mm 3600m

m

3850m

m 3520mm

3675

mm

3500m

m

3495m

m 3995mm

A3: Mid-size

(4001-

4500mm)

Omni Gypsy Ertiga

4075mm 4010

mm

4265

mm

A4: Executive

(4501-

4700mm)

SX4 Kizashi Vitara

4490mm 4650m

m

4500m

m

A5: Premium

(4701-

5000mm)

A6: Luxury

(5001mm &

above)

UTILITY

VEHICLES

B1: Max Mass

upto 3.5

tonnes, Max

seats <= 7

Ertiga

7

B2: Max Mass

upto 3.5

tonnes, Max

seats

Between 7 &

9

Omni

8

C: Max Mass

upto 3.5

tonnes, Multi

Purpose

Vehicles

Gypsy Vitara

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The table above gives the various brands of Maruti Suzuki in various segments with their

specification. Maruti has highest number of brands catering to the A2 segment. It also the

company catering such huge portfolio of variants with each brand has individual variant.

Example: Maruti Alto comes Alto , Alto LX, Alto LXi and Alto K10 variants.

Maruti Brands

Maruti 800 : Maruti Suzuki 800, the best seller till 2004. The Maruti Suzuki 800 is a very special car

which is extremely close to the hearts of Indians. The car had been the best seller till the year 2004.

Maruti Suzuki 800 did drop some sales figure with the introduction of Alto. However, the car still covers

a good market share. It is a perfect family car and a very comfortable one in the class of small cars. It is

primarily a 4 seated car, including the driver. However, it can still accommodate 5 people. Maruti Suzuki

800 has evolved a lot with the due course of time. The design was completely changed to make it more

attractive for the users. Nepal, Sri Lanka and Bangladesh are also extremely fond of the car. Maruti

Suzuki 800 is tagged as a car of the classic class in India. There are several dash board messages stating

that the car is one of the most wanted ones. Users from different parts of the world have preferred the

machine over other for a very long period of time.

Estilo- Maruti launched all new Estilo. If you are wondering why I dropped Zen from this car's name then

let me explain. Estilo has got Wagon R's engine and chassis and Suzuki MR Wagon's shape. Whatever

remains is taken from Zen, well does anything remains actually? Yes, Name! Name is taken from

Zen, 'Zen Estilo'. In essence it’s stylish Wagon R, Japan's MR Wagon, combination of the two or

anything but Zen. It seems Maruti wants to exploit Zen brand-image hence named this car after Zen.Zen

Estilo has the same engine (1061cc, 64.8ps, 84Nm, 4-cylinder, 16-valve, MPFI F10D Petrol) under the

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hood that is found in Maruti Wagon R. Absolutely nothing has been changed except for the fact that

this engine is much refined and is slightly better at responsiveness and fuel economy. This simply

translate into 'Zen Estilo is a bit faster and more fuel economic than Wagon R'. Due to highly good

drivability, driving in city would be more fun with Zen Estilo. Electronic Power Steering (not available in

LX version) really helps in crowded traffic. Owning and maintaining Zen Estilo won't be a problem,

engine is proven reliable and virtually maintenance-proof.

Wagon R : At first glance the Maruti Wagon R looks quite normal. Well, that is if you think the Wagon

R's boxy looks are normal to start to start with. Frankly, for a car that has to get around a city, I really

don't care, because the Duo is all about LPG, and the fact that it is first factory fitted LPG car in India.

Factory-fitted means one major plus, your warranties don't get voided because of the gas fitment. There

is no denying the cars cost advantage, this is the cheapest Maruti vehicle to run, and that in itself is a

massive statement. The redesign of the car hasn't just meant a fresh exterior look; it has also meant new

interior - rotary controls on the panel and a very neat looking display with an all new Speedo. The

problem is that despite the not insignificant cost savings, you save a rupee a kilometer on

LPG over Petrol, which even makes the extra Rs 24000 you have to pay for the car seem worth it, the

Duo just wheezes at times. And this is despite two important facts, first LPG has more energy than CNG

(that other gas) and because this is a company designed car, Maruti engineers have really played around

with the engines tuning.

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

that was meant to capture the hearts of car lovers all over the world. it is a car that’s aimed at

many reasons - from a sporty hatchback to a comfortable family car it has everything that is

required in a modern family. There is every detailing for safety that’s built in with dual airbags

ensuring a zero impact in case of a collision situation. An automatic climate control system

provides interior comfort and an easy access with modern lock systems. there is a keyless

system that keeps you safe at all times.

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If you are looking for that perfect hatchback car that will be of space and comfort in addition to

a sleek design of its exteriors and interiors there is one name to reckon – Maruti Suzuki Swift.

The car has a strong built body type with 5 doors. An engine capacity of 1197 cc with 4 cylinders

and 16 valves it also is featured with a multi point fuel injection. The fuel tank capacity is 43

liters.

The front view of the car has impressive lights and a look of strength and sustainability. It is also

available in rich tones of color and the texture of the paints somehow adds to its sturdy looks.

There is a large boot space at the back with luggage capacity of 368 litres. There are large size

rear lights that make for easy coverage at nights and on long drives and a wider than usual

bumper too.

Alto : Maruti Suzuki Alto, a dream car for middle class families. Maruti Suzuki Alto is said to be one of

the most popular cars in India currently. It is often known as an advanced version of the 800 model. The

car is primarily a small car which is apt for 5 people, including the driver. The fuel efficiency of the car

has managed to label a very popular tag to the car. Maruti Suzuki Alto has managed to win a lot of

hearts in several parts of the world. It is one of the cheapest ones that the world has to offer. It is

extremely important for all users to give this product a try, as it is a very special one in more ways than

one. The car has a very elegant look to it, along with a very smart design. Maruti Suzuki Alto can prove

to be a dream car for most middle class families. The car is comfortable to drive as well as to ride. It has

a huge market in the Indian subcontinent. Demand for the car is so huge, that sometimes the company

fails to meet it.

Maruti Suzuki Alto can be described as a perfect family car for mainly the middle class section of the

society. The price tag attached to the car is extremely nominal and ensures that users from all sectors of

the society can enjoy the luxury of a car. The external looks of the car is special in several ways. The car

has a moderately high back to match with a smart front. The car is capable of giving excellent mileage

results and can bring smile to the faces of the owners. The seating arrangement of the car has been

done to provide the maximum comfort to the users. The car is small and can provide extreme smooth

performance on road. Most of the drivers have stated that, the car is extremely comfortable to drive.

The turning radius of the car is small and thus, is perfectly suited to the Indian roads. Parking space

needed by the car is also very small as compared to some of the other cars in the world market. Maruti

Suzuki Alto is capable of generating a good top speed along with a good acceleration. Overall, the car is

a complete package and should not be missed by any user.

Page 20: Maruti Suzuki India Ltd.

20 Maruti Suzuki India Ltd.

Maruti Eeco: Maruti Suzuki Eeco, a new age car. When we talk of the Maruti brand then there is sense of reputation that is attached with the people. There are lots to look forward to for the people and hence people can get all the major help from the brand itself. It is classy, trendy and affordable and hence has a mass appeal among the people.

The company made its first appearance in the year 1983 and it continues to rise above and giving out some of the best featured cars to the public. The Maruti Suzuki Eeco is a new age car and has all necessary features to cater to and people can certainly get all the necessary features from this car as well. There are lots to look forward to for the people and if you are looking for info and data then always make sure you have the best of the benefits. Internet can be of great help to the people and this is a feature that you can embrace in order to get the best of the info.

Maruti Suzuki Grand Vitara: For those who likes to lead a grand life.Maruti Suzuki India limited has

recently come out with a better and advanced version of their grand Vitara that is more suitable to the

market that exists in the Indian subcontinent. The Maruti Suzuki Grand Vitara is show cased all across

the country. This car is a utility vehicle that falls under the category of sports car. This model is

considered to be a strategic model amongst all the other models of the Maruti Suzuki.

Replacing the older models in the showrooms across the country the Maruti Suzuki’s new release Grand

Vitara 2.4 comes packed with numerous new features adding style and elegance along with a bolder

look. The amazing front look of the sports utility car is attributed by large head lamps, that are

encapsulated by front grille designed magnificently with horizontal slats and along with the company

logo that is located in the center region. The car comes with various body colors with lower grills and a

front aligned bumper. The rear view mirrors are colored and can be easily adjusted from the inside. The

car waistline casting gives it a more elegant look. The glasses of the sports utility model are colored

lightly. They can be operated without manual efforts as they have electronic modifications.

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21 Maruti Suzuki India Ltd.

A-Star: Maruti Suzuki A-Star, certainly a class apart. When we talk of a family car within a reasonable

budget then the first thing that comes to the mind is Maruti. This is a brand which over the years has

dished out various types of cars to the people and there are lots of options for the people to choose

from. There are lots of thoughts and innovations that go into the designing of the product and many

people, some of the best brains from around the world, work towards the betterment of the brand. In

India this is a brand that has seriously become popular among the people because of the quality of the

same.

The tag line for the brand is indeed catchy that the ad makers have made. India comes home in a Maruti

is the latest tag line going on air for this brand of the car. It is indeed a true that that Maruti Suzuki A

Star along with the Suzuki has been going great guns and giving out some of the best cars to the middle

class Indians who are actually aspiring for the effective and efficient family car.

Maruti Suzuki SX4 : The Maruti Suzuki SX4 is one of the latest offerings of sedans for Indian roads. It

marks a coming together of powerful engineering and styles for the century. For the first time there has

been an extremely concerted effort to reach out to the millions of people who would like to experience

technology with a budget restriction.

This is a car that has a powerful engine with high class interiors meant for comfort and luxury. There is a

strong and stylish exterior design that’s coupled with all the safety features needed on modern roads.

There is a very high rate of fuel efficiency that’s imperative for modern day driving. There is a design and

technology that makes for easy driving and ensuring every bit of convenience for all those who are

traveling even at long distances.

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22 Maruti Suzuki India Ltd.

The Maruti Suzuki SX4is an embodiment of style and engineering finesse. There is study and bold

European look given to it that has a curved bonnet and flared arches for the wheels. There is an elegant

grill design at the front that is also flanked by some incredible lights on both sides. The headlamps

continue well into the sides thus providing you with the best of illumination coverage even through dark

and rainy nights of driving. To make foggy winter time driving easier there is also a fog lamp that’s added

elegantly.

The rear side of the car has a strong and bold look. It is equally matched with the tail lights that are

affixed. You have a large boot capacity of 504 liters which makes traveling easier and gives you

considerable space as well.

You will have an unmatched driving experience with this car as it is powered with one of the best VVT 16

valve DOHC engine. It has an incredible fuel efficiency and mileage apart from high powered driving.

Additionally the car is also facilitated with a 4 speed automatic transmission that does not require a

change of gear. You will have the pleasure of a hands free experience.

Maruti Suzuki Omni :Maruti Suzuki Omni, a mini van fit for rough roads. When you talk of the

affordability and style Maruti has always lived up to the expectation and dished out some of the sate of

the art cars to the Indian public. The Maruti Suzuki Omni is a mini van that has been specially designed

for the Indian road conditions. It was designed and made by the Maruti Suzuki, which is of course an

Indian car maker. This particular car, Maruti Suzuki Omni was released in the country in year, 1984, and

was the second automobile released by the company after Maruti 800. in the early days this particular

car came with 786 cc engine and had a 5 seat arrangement for the passengers. However the 8 seater car

was launched later and it became very apt for families or small groups to set out for a picnic.

Once the car was launched all around Indian market it took the imagination of the people straight away

because of the quality and the performance and above all the affordability of the same also played an

important factor. If we go by the record then we will see that Maruti Suzuki Omni is certainly one of the

highest sold cars in India. With all the necessary safety measures and well equipped features Maruti

Suzuki Omni is certainly a multi utility vehicle for sure.

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23 Maruti Suzuki India Ltd.

Maruti Suzuki Gypsy King : Own a Gypsy King; feel like a king on the road. The car Maruti Gypsy is

basically a four – wheel drive SUV. It is based on the series vehicles that have a long wheelbase i.e.

Suzuki Jimmy SJ40/410. The car is manufactured in the country of India by the Maruti Suzuki. The model

was launched in the market of India in the year 1985, December. That model had 970cc F10A engine of

Suzuki. The sales, however, were not that high but it was able to gain popularity.

Maruti made an addition of an engine from the Esteem in the month of June, 1996. This new engine

displaced 1.3Land made a good 65 bhp. G13BA with all aluminum 8 – valve was the new engine. This

engine was combined with a new 5 – speed gear box. This was given the codename of MG413W and was

known by the name Gypsy King. So this is the story behind the Maruti Suzuki Gypsy King. The regular

Gypsy that had F10A engine was produced till the year of 2000. The Maruti Suzuki Gypsy King is

considered to be an Indian version of the Suzuki Jimmy. It falls among the best four wheelers that a

person can use to travel nearly anywhere. The built of Maruti Suzuki Gypsy King very tough and hence

can take on any terrain. This car provides not only great control but also offers the consumer good

mileage. The vehicle is designed in a way to answer the call of wild. The 5 – speed gear box present in

the vehicle allows it to have an impressive mileage on highways and also enables the car to go at a high

cruising speed. Besides providing better control this car also has greater power and more

responsiveness. This car is comparatively light in weight and hence it seldom does get stuck on muddy

or sandy tracks. It is a kind of vehicle that has been designed keeping in mind the conditions of the India

Maruti Suzuki Ritz : Maruti Suzuki Ritz: Stylish, clean and bold. Maruti Suzuki India has brought in

another world class rear door – Splash – that has been renamed as Maruti Suzuki Ritz and this is the fifth

universal model from Maruti Suzuki India having production version to some extent similar to SX4 and

Swift based on complete new platform. The car looks stylish, clean and bold having internal design

conspicuously deviating from the standard Maruti Suzuki feel and appearance. The features of Maruti

Suzuki Ritz include range of total new design for the market of India. Depending on the Swift type

platform, the excellence of Maruti Suzuki Ritz has its specialty in its high roofline. This enables the

occupants to seat in a comfortable manner. The mounted dash gearshift creates and on the whole

impression and offers a comfortable position of driving for the driver enabling him the opportunity of

gear shifting more easily.

The Ritz is elegant rather than square type in shape, however it is resolute in respect of configurability,

roominess and functionality. Its gear lever remains in mounted position and the driver’s seat can be

adjusted with height similar to the steering wheel. The suspension of Maruti Suzuki Ritz is very strong

and agile in spite of the height. The boot appears small, particularly front-to-rear, however, a large

Page 24: Maruti Suzuki India Ltd.

24 Maruti Suzuki India Ltd.

compartment is there hidden beneath the false floor along with spare wheel for space save concealed in

another level below that. The rear seats can be folded in a sideways movement, while for making space

in connection with descending backrest with cushion cranking forward. Surfaces in respect of the

dashboard having colored produces a casual and youthful look in the space for the passenger airbag and

the upper portion of the tool cluster. Along with materials of top-quality and a silver-metallic border on

the main console, they create a charming fresh atmosphere for the occupants. A big speedometer

located in the middle at the back of the steering wheel can be viewed easily and fitted with indicator

lamps around the same.

A liquid crystal display of digital type is fixed in the lower part of the speedometer and offers additional

information to the driver. In comparison to the front seats the rear seat is little bit taller which enables

all to get a better view of the outside and all the seats are cozy too. Inside space is meant for four

persons but five can be accommodated with little bit of squeezing. Lot of storage space comprising a

flip-lid box above the dashboard is there.

Generic Strategies @ Maruti

To cope up with the 5 competitive forces –there are Three Generic Strategies Maruti Suzuki has

applied:

1. To achieve cost leadership – To realize economies of scale upfront capital investment in

state-of-the-art equipment plant is required. Maruti Suzuki has set up two such state of

art manufacturing facilities in India

Gurgaon facility(300 acres) housing the ‘K’ Engine Plant

Manesar facility(600 acres)

Focus

Differentiation

Cost Leadership

Page 25: Maruti Suzuki India Ltd.

25 Maruti Suzuki India Ltd.

2. Differentiation- creating something that is perceived industry wide as unique.

Differentiation can take many forms-

Brand Name- Maruti Suzuki

Technology- The highly fuel efficient, technologically advanced K series engines have

been very well appreciated by the customers for their performance

Service- Best Service/highest no. of service centers

Dealer network- Highest

Quality- Value for performance

3. Focus is the moderator of the other two strategies:-

Cost Focus - Maruti also tried to offer a low price product to a small and specialized

group of buyers. This helped MUL to cut down prices just hours before TATA

introduced Indica.

Differentiation Focus - Maruti also has a niche of premium products available at a

premium price. Maruti kizashi and Maruti Vitara provides the possibility to charge a

premium price for superior quality.

Page 26: Maruti Suzuki India Ltd.

26 Maruti Suzuki India Ltd.

0

4

8

12

16

2004-05 2005-06 2006-07 2007-08 2008-09 2009-10 2010-11

Au

tom

ob

ile D

om

est

ic S

ale

s in

Mill

ion

s

Passenger Vehicles Two Wheelers Three Wheelers Commercial Vehicles

Marketing Environment

The automobile industry can be divided into the 4 categories.

1. Passenger Vehicles

2. Commercial Vehicles

3. Three Wheelers

4. Two Wheelers

The data gives the overview of the total domestic automobile sales in India along with the sales

volume of the various categories in the automobile industry from the year 2004-05 to 2010-11.

Automobile Domestic Sales Trends (Number of Vehicles)

Category 2004-05 2005-06 2006-07 2007-08 2008-09 2009-10 2010-11

Passenger Vehicles 1,061,572 1,143,076 1,379,979 1,549,882 1,552,703 1,951,333 2,520,421

Commercial Vehicles 318,430 351,041 467,765 490,494 384,194 532,721 676,408

Three Wheelers 307,862 359,920 403,910 364,781 349,727 440,392 526,022

Two Wheelers 6,209,765 7,052,391 7,872,334 7,249,278 7,437,619 9,370,951 11,790,305

Grand Total 7,897,629 8,906,428 10,123,988 9,654,435 9,724,243 12,295,397 15,513,156

Page 27: Maruti Suzuki India Ltd.

27 Maruti Suzuki India Ltd.

Domestic Sales

The cumulative growth of the Passenger Vehicles segment during April 2007 – March 2008 was

12.17 percent. Passenger Cars grew by 11.79 percent, Utility Vehicles by 10.57 percent and

Multi Purpose Vehicles by 21.39 percent in this period.

The Commercial Vehicles segment grew marginally at 4.07 percent. While Medium & Heavy

Commercial Vehicles declined by 1.66 percent, Light Commercial Vehicles recorded a growth of

12.29 percent.

Three Wheelers sales fell by 9.71 percent with sales of Goods Carriers declining drastically by

20.49 percent and Passenger Carriers declined by 2.13 percent during April- March 2008

compared to the last year.

Two Wheelers registered a negative growth rate of 7.92 percent during this period, with

motorcycles and electric two wheelers segments declining by 11.90 percent and 44.93 percent

respectively. However, Scooters and Mopeds segment grew by 11.64 percent and 16.63

percent respectively.

Exports

Automobile Exports registered a growth of 22.30 percent during the current financial year. The

growth was led by two wheelers segment which grew at 32.31 percent. Commercial vehicles

and Passenger Vehicles exports grew by 19.10 percent and 9.37 percent respectively. Exports of

Three Wheeler segment has declined by 1.85 percent.

16%4%

4%

76%

Domestic Market Share for 2010-11

Passenger Vehicles

Commercial Vehicles

Three Wheelers

Two Wheelers

Page 28: Maruti Suzuki India Ltd.

28 Maruti Suzuki India Ltd.

Market Share of Automaker in India

As per the SIAM 12/2009 report it can be inferred that Maruti is the market leader with a

market share of 45% followed by Hyundai (16%), Tata Motors (14%) and Mahindra and

Mahindra (8%). They are majorly the foreign players in the market. The market share of the

other small players is also given.

Page 29: Maruti Suzuki India Ltd.

29 Maruti Suzuki India Ltd.

The above given the graph reflects the drop in the market share of Maruti from year 2000 to

2012.This shows that the global players entering into the Indian market have eaten away the

market share of Maruti. The drop has been quiet significant from 55.5% in 2000 to 40.34% in

2012 year.

Herfindahl index

HHI Index a measure of the size of firms in relation to the industry and an indicator of the

amount of competition among them. Named after economists Orris C. Herfindahl and Albert O.

Hirschman, it is an economic concept widely applied in competition law, antitrust and also

technology management. It is defined as the sum of the squares of the market shares of the

largest firms within the industry, where the market shares are expressed as fractions. The result

is proportional to the average market share, weighted by market share. As such, it can range

from 0 to 1.0, moving from a huge number of very small firms to a single monopolistic

producer. Increases in the Herfindahl index generally indicate a decrease in competition and an

increase of market power, whereas decreases indicate the opposite.

Page 30: Maruti Suzuki India Ltd.

30 Maruti Suzuki India Ltd.

Manufacturer Domestic Sales 2010-11 S= % Market Share HHI = ∑S^2

Maruti Suzuki India 1,132,739 45.25% 0.2047526

Hyundai Motor India 356,717 14.25% 0.0203057

Tata Motors 319,712 12.77% 0.0163113

Mahindra and Mahindra 377,000 15.06% 0.0226805

GM India 110,804 4.43% 0.0019592

Ford India 83,887 3.35% 0.0011229

Toyota Motor 74,759 2.99% 0.0008919

Volkswagen India 32,627 1.30% 0.0001699

BMW India 6,246 0.25% 0.0000062

Mercedes-Benz India 5,819 0.23% 0.0000054

Audi India 3,003 0.12% 0.0000014

Total 2,503,313 100.00% 0.2682

A HHI index below 0.01 indicates a highly competitive index.

A HHI index below 0.15 indicates an un-concentrated index.

A HHI index of 0.15 to 0.25 indicates moderate concentration.

A HHI index above 0.25 indicates high concentration.

It can be clearly inferred form the HHI Index which is 0.2682 , the Passenger segment of

automobile sector is highly concentrated with four domestic giants mainly Maruti , Hyundai,

Tata Motors, and Mahindra and Mahindra. Apart from that there are many foreign players

who are fighting for the same pie in India.

Domestic Car Sales Model Wise from 2004 to 2010

The diagram below shows the sale figures of the various models launched in India by

different brands.

Page 31: Maruti Suzuki India Ltd.

31 Maruti Suzuki India Ltd.

Domestic Car Sales Model wise 2004-10

Model 2004/05 2006 2007 2008 2009 2010 2011

Audi A4 - - 102 1,050

(All Audi

models)

1,658 (All Audi

models)

3,003 ( all

models)

5,117

(Jan-

Nov, all

models)

Audi A6 105 (all

Audi

models-

'05)

300 (all

Audi

models)

349 (all

Audi

models)

111

(Jan-

Apr)

396

Audi A8 - - 172 1,050

(all Audi

models)

Audi Q5

Audi Q7 - - 350

Audi R8 - - - 15

Audi TT 5 (2005) na

Bentley 20 28

BMW 3 Series - - 946 1,075

(FY09)

1,155 2,220 (Jan-

Nov)

8,042

(Jan-

Nov)

BMW 5 Series - - 822 1,352

(FY09)

1,590 2,030 (Jan-

Nov)

BMW 6 series, X3

and X5

ca 40

(X5)

257 (all

models)

83 4 (6 series,

Mar)

BMW 7 Series - - 251 279

(FY09)

BMW X1

BMW X3, X5 and X6 16 (Jan)

Page 32: Maruti Suzuki India Ltd.

32 Maruti Suzuki India Ltd.

BMW Z4 Roadster 25

Chevrolet Aveo - - 5,624 1,174

(Jan)

746 (Feb) 364 (Jan)

Chevrolet Aveo U-

VA

- - 11,523 434 (Jan)

Chevrolet Beat 2,825 (Jan)

Chevrolet Captiva - - 607 2,134

(FY09)

201 (Feb) 72 (Jan)

Chevrolet Cruze 812 (Oct) 686 (Jan)

Chevrolet Forester

(discontd.)

260

(2003-

2005)

- - - - - -

Chevrolet Optra

Magnum

9 191 na 6,058

(inc. SR-

V

model)

1287

(Jan-

Mar)

89 (Feb) 51 (Jan)

Chevrolet Spark - - 22,060 7,265

(Jan-

Mar)

2,940 (Feb) 3,477 (Jan)

Chevrolet SRV

Chevrolet Tavera 18 622

(2005)

na 20,671 4,892

(Jan-

Mar)

945 (Feb) 1,512 (Jan)

Ferrari

Fiat Grande Punto - - - - ~9,000 (Jun-

Nov)

8,401 (all

models in

Apr-Jul)

Fiat Linea - - - 4,512

(FY09)

~ 12,000 (Jan-

Nov)

Fiat Palio Stile 791 (05-

06)

1,614 (06-

07)

3,303

Page 33: Maruti Suzuki India Ltd.

33 Maruti Suzuki India Ltd.

Fiat

Petra/Adventure

(discontd.)

454 (05-

06)

584 (06-

07)

Fiat 500 - - - ca 30 till

Sept

ca 65 till Jun

'10

Force Trax - - 7,053 -

Ford Endeavour 1 818

(05-06)

na 2,916 2,780

(FY09)

184 (Oct) 51,420

(all

models

Jan-

May)

Ford Fiesta ca 3 500 na 22,855

Ford Figo - - - - - 58,000 (till

Nov)

Ford Fusion

(discontd.)

329² na 2,678

Ford Ikon

(discontd.)

24 536 na 4,797

Ford Mondeo

(discontd.)

25² (05-

06)

0

Hindustan

Ambassador

12 740 na 8,487

Honda Accord 3 324

(05-06)

2,728 (06-

07)

2,133 4,108

(FY09)

948 (Jan-Apr) 288 (Jan)

Honda Brio

Honda City 37 545

(2005-

06)

40,464

(06-07)

40,536

(incl.

Marina

STW)

18,482 (Jan-

Apr)

4,485 (Jan)

Honda Civic na 16,262

(06-07)

16,723 2,386 (Jan-

Apr)

644 (Jan)

Honda CR-V 1 858 1,873 (06- 3,425 501 (Jan-Mar) 76 (Jan)

Page 34: Maruti Suzuki India Ltd.

34 Maruti Suzuki India Ltd.

(05-06) 07)

Honda Jazz 3,069 (Jun-Jul) 490 (Jan)

Hyundai Accent 24 383 na 8,274

Hyundai Elantra

(discontd.)

2 331

(2005)

1,683 (06-

07)

10 (Mar)

Hyundai Eon

Hyundai Getz Prime 5 483 na 16,787 9,442

(FY09)

Hyundai i10 - - 14,451

(2007)

106,110

(FY09)

24,990 (till

Mar 12)

Hyundai i20 - - - 4,991

(FY09)

4,940 (Oct)

Hyundai Santa Fe

Hyundai Santro Xing 103 301² 163,838

(06-07)

121,163 91,466

(FY09)

Hyundai Sonata 806

(2005)

506 577 486

(FY09)

232 (Jan-Apr) 29 (Jan)

Hyundai Terracan

(discontd.)

318³ -

Hyundai Tucson 884

(March-

Nov 05)

533 (incl.

Terracan)

188 50

(FY09)

13 (Jan-Apr)

Hyundai Verna na na 24,370 2,132

(Feb)

5,502 (Jan)

ICML Rhino - -

Jaguar 242 (incl. Land

Rover)

891 (Apr-Mar

'11) incl. Land

Rovers

Lamborghini

Page 35: Maruti Suzuki India Ltd.

35 Maruti Suzuki India Ltd.

Land Rover ca 30 na ~90

(2008)

242 (incl.

Jaguar)

35 (Jan)

Mahindra Bolero - - 51,009 55,924

(FY09)

Mahindra Max - - - 3,000

(Apr08-

Feb09)

Mahindra Scorpio 31,661

(05-06)

38,015

(06-07)

41,443 27,000

(Apr08-

Feb09)

3,200 (Mar) ca 44,000

('10-'11)

Mahindra Thar

Mahindra XUV500

Mahindra Xylo - - - 7,201

(FY09)

~10,500 (Jan-

Apr)

Maruti 800 116 262² 79,245

(06-07)

69,553 49,383

(FY09)

9,915 (Apr-Jul)

Maruti A-Star - - - 15,736

(FY09)

2,784 (Jun) 2,494 (Jan)

Maruti Alto 126 223² 200,000+

(Apr06-

Feb07)

227,173 218,127

(FY09)

240,000

Maruti Baleno

(discontd.)

6 521 na

Maruti DZire - - 5,658 61,952

(FY09)

8,995 incl.

SX4 (Jan)

Maruti Esteem

(discontd.)

18 379 na 12,485

Maruti Grand Vitara na na 795 270

(FY09)

Maruti Gypsy na na 3,132 7,219

(FY09)

Page 36: Maruti Suzuki India Ltd.

36 Maruti Suzuki India Ltd.

Maruti Kizashi 103 (Mar '11)

Maruti Omni 60 377² na 88,273

Maruti Ritz 6,214 (Jun)

Maruti Swift 34 463

(May-

Nov 05)

na 88,745 110,071

(FY09)

Maruti SX4 - - 31,192 1,953

(Feb)

Maruti Versa 4 291³ na 1,456 1,440

(FY09)

Maruti Wagon R 79 712² na 132,727 134,768

(FY09)

140,000 163,000 (Apr-

Mar '11)

Maruti Estilo 65 345² na 50,635

(Zen and

Estilo)

32,694

(FY09)

Mercedes C-Class 785 883 1,127 1,765 1,607 5,109 (All

models, Jan-

Nov)

6,698

(all

models

Jan-

Nov)

Mercedes E-Class 825 (05) 922 1,048 1,167 1,048 245 (Jan)

Mercedes S-Class 144

(2005)

248 518 561 467 22 (Jan)

Mercedes

CLS/SLK/SL/CLK/M

na 118 141

(incl. 80

M-class)

125 (models

other than C,E

and S class)

6 CBU

imports(Jan)

Maybach 3 ('04

and '05)

na na

Mitsubishi

Lancer/Cedia

2 509 na 2,582 1,570

(FY09)

Mitsubishi

Outlander

- - - 278

(FY09)

Page 37: Maruti Suzuki India Ltd.

37 Maruti Suzuki India Ltd.

Mitsubishi

Pajero/Montero

na na 1,676 1,814

(FY09)

Nissan 370Z 4 (Jan-Aug)

Nissan Micra ~6,000 (Jul-

Nov)

10,247

(H1)

Nissan Teana - - 347 58

(FY09)

207 (FY10) 179 (Apr-

Nov)

58 (H1)

Nissan X-Trail 253

(2005)

250 173 100

(FY09)

50 (Jul) 157 (H1)

Opel Corsa

(discontd)

8 369 na - - - - -

Porsche (various

models)

ca 100

(2005)

160 168 168

Premier Rio

Mahindra Verito

(Renault Logan)

- - 25,884 13,419

(FY09)

2,520 (Feb-

Apr)

555 (Jan)

Mahindra Reva

Renault Fluence 290

(Jun)

Renault Koleos

Rolls-Royce 5 (2005) 7 (2006) 12

(2007)

14

(2008)

<10 (2009) 80 (2010)

San Storm na na

Škoda Fabia - - 1,906 6,634 5,510 (Jan-

Mar) all

Škoda models

9,257

(H1)

Škoda

Octavia/Laura

9 559

(05-06)

11,433 10,944 7,459

(FY09)

3,519

(H1)

Škoda Rapid

Page 38: Maruti Suzuki India Ltd.

38 Maruti Suzuki India Ltd.

Škoda Superb na 769 586 694

(FY09)

541 (Apr-Jun) 2,078

(H1)

Škoda Yeti 1,310

(H1)

Tata Aria

Tata Indica 111 574

(05-06)

144,690

(06-07)

135,642 111,257

(FY09)

91,295 (Apr-

Jan '10)

11,448 (Jan)

Tata Indigo/Indigo

XL/Indigo CS

39 377

(05-06)

34,310

(06-07)

31,416 49,190

(FY09)

41,724 (Apr-

Jan '10)

7,258 (Jan)

Tata Marina 2 050 na

Tata Nano 21,535 (Jul-Jan

'10)

77,000

(till12/10)

Tata Safari 4 692

(05-06)

15,816

(06-07)

19,078 25,630

(Sumo+Safari:

Apr-Jan '10)

3,538

(Safari/Sumo

Jan)

Tata Sumo / Sumo

Victa

33 213

(05-06)

32,077

(06-07)

28,622

Tata Sumo

Grande/MKII

Tata Vista

Tata Xenon XT - - - 161

(FY09)

Toyota Camry 794

(2005)

1,001 (06-

07)

988 182

(Apr-

Jun)

44 (Apr-Jun) 120 (H1)

Toyota Corolla Altis 8 974

(2005)

na 6,204 9,172 4,901

(H1)

Toyota Etios 20,765

(H1)

Toyota Etios Liva 3,154 737

(Jun)

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39 Maruti Suzuki India Ltd.

Toyota Fortuner ~3,100 (Aug-

Dec)

5,475

(H1)

Toyota Innova 32 000

(2005)

na 48,069 42,740 25,307

(H1)

Toyota Land Cruiser

200

Toyota Land Cruiser

Prado

162

(2005)

na 141 109

(FY09)

Toyota Prius

Toyota Qualis

(discontd.)

31 759² na

VW Beetle ca 240 till Jun

'10

88 (H1)

VW Jetta - - 1,566

(all VW

models)

1,957 (Jan-

Aug: all VW

models)

975 (H1)

VW Passat - - 27,946

(Vento and

Polo)

383 (H1)

VW Phaeton 58 (till

Jun '11)

VW Polo 20,127

(H1)

VW Touareg - -

VW Vento - - - - - 17,555

(H1)

Volvo S80 - - ca 100

(all

Volvo)

ca 90 (

all Volvo

models)

Volco XC60

Volvo XC90 - -

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40 Maruti Suzuki India Ltd.

Competitive Landscape

BCG Matrix

Passenger Vehicle Growth Rate

Years

Number of

Vehicles

Growth

(Sales Current/Sales Previous)

Cumulative

growth in 4yrs CAGR(%)

2006-07 1,379,979 - - -

2007-08 1,549,882 1.12311999 - -

2008-09 1,552,703 1.001820139 - -

2009-10 1,951,333 1.256732936 1.826419822 16.25%

2010-11 2,520,421 1.291640637 - -

Relative Market Share

Company

Market Share

(%) Relative

Maruti 45.00% -

Hyundai 16.00% 0.356

TATA

Motors 14.00% 0.311

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41 Maruti Suzuki India Ltd.

Compan

y Year Sales Incremental Growth

(Sales Current/Sales Previous)

Cumulative

growth

in 4yrs

CAGR

Maruti

2006-

07 635629

- - -

2007-

08 711818 1.119863946

- -

2008-

09 722144 1.014506517 1.782075708

15.54

%

2009-

10 870790 1.205839832

- -

2010-

11 1132739 1.300817648

- -

Hyundai

2006-

07 186174

- - -

2007-

08 200412 1.076476844

- -

2008-

09 245297 1.223963635 1.916040908

23.53

%

2009-

10 289863 1.181681798

- -

2010-

11 356717 1.230639992

- -

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42 Maruti Suzuki India Ltd.

Tata

Motors

2006-

07 228220

- - -

2007-

08 218055 0.955459644

- -

2008-

09 207512 0.951649813 1.400893874 8.79%

2009-

10 260020 1.253035969

- -

2010-

11 319712 1.229566956

- -

The Tata Motors are at Dogs position and Hyundai is at Question mark position with respect to

the market leader (Maruti Suzuki). Dogs have low market share and a low growth rate and thus

neither generate nor consume a large amount of cash. This can be due to the Tata Nano failure

and Indica loosing market. Question marks are growing rapidly and thus consume large

amounts of cash, but because they have low market shares they do not generate much cash.

Hyundai has to bring new innovation into its product and brand lines in order to keep regular

cash flows.

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43 Maruti Suzuki India Ltd.

Porter Five Forces

1. Bargaining power of Buyers:

India is an emerging country with growing GDP of 7.74%. The country’s household income is

increasing which has lead to growth in its markets. The rise in the population has even

increased the demand needs of the country. The divide between the rich the poor is also

increasing which has attributed the foreign companies to fight for consumers in the country.

With the advent of many foreign companies entering into the country has lead to the variety of

options for the consumers which has lead to the decrease in the market share of the market

leader i.e. Maruti Suzuki India Ltd. which was having a market share of 55.5% in 2000 which

reduced to 44.1% in 2010. This also shows that the Indian middle class is rising with purchasing

power and changing tastes and preferences. Since the market leader still has a lead of more

than 25% which clearly states that buying power of company is still a bit leveraged. Even the

switching costs are very high for consumer.

Hence, we can clearly infer that the Bargaining Power of Buyers is Moderate.

2. Bargaining Power of Suppliers

The industry major costs are incurred in the designing and manufacturing of the metal forge

and fittings. Almost 70% of the cost incurred in it. Since the industry is growing at a much faster

rate than the steel industry where there is derived demand. Due to the cheap imports of Steel

from China the Indian steel industry is at bay. These factors determine to conclude that the

industry has a lot of options to minimize their costs.

Hence, we can clearly infer the threat bargaining power of suppliers is LOW.

3. Threat of Substitutes

The substitutes comprises of Indian Rail, Metro and Local trains that comprise of a major mode

of commuting for the masses in big cities. The Government as part of 10th Plan has initiated

several Metros in Kolkata, Delhi, Bangalore and Hyderabad. The State Board buses and private

transport buses are also huge threat to the industry. The other modes of transport are the

Commercial vehicles, Two Wheelers and three Wheelers which are a major threat to the

passenger car industry.

Hence, we can clearly infer the threat of substitutes is HIGH.

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44 Maruti Suzuki India Ltd.

4. Entry and Exit Barriers

The industry is a capital intensive by nature which clearly defines the entry and exit barriers.

The Government of India has to comply with the European ECE regulations to keep a check on

global pollution. The exit barriers are also capital intensive even today the Hindustan Motors

whose frontline Brand “Ambassador” is a dead state of product life cycle still they are not able

diversify or move out of the business.

Though the foreign companies have tried to enter India through completely knocked down

units where in the components manufactured outside are assembled back in India, however,

the business is vulnerable to the exchange rate volatility and the infrastructure lag within the

country. Hence, entry and exit barriers are HIGH.

Competitive Rivalry

Manufacturer Domestic Sales 2010-11 S= % Market Share HHI = ∑S^2

Maruti Suzuki India 1,132,739 45.25% 0.2047526

Hyundai Motor India 356,717 14.25% 0.0203057

Tata Motors 319,712 12.77% 0.0163113

Mahindra and Mahindra 377,000 15.06% 0.0226805

GM India 110,804 4.43% 0.0019592

Ford India 83,887 3.35% 0.0011229

Toyota Motor 74,759 2.99% 0.0008919

Volkswagen India 32,627 1.30% 0.0001699

BMW India 6,246 0.25% 0.0000062

Mercedes-Benz India 5,819 0.23% 0.0000054

Audi India 3,003 0.12% 0.0000014

Total 2,503,313 100.00% 0.2682

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A HHI index below 0.01 indicates a highly competitive index.

A HHI index below 0.15 indicates an unconcentrated index.

A HHI index of 0.15 to 0.25 indicates moderate concentration.

It can be clearly inferred form the HHI Index which is 0.2682 , the Passenger segment of

automobile sector is highly concentrate with four domestic giants like (Maruti , Hyundai, Tata

Motors and Mahindra and Mahindra ) and many foreign players who are fighting for the same

pie in India.

The overall CAGR of the Passenger Car industry is 16.24%. The number of brands of companies

which have there presence in India is 15-20 which clearly states that there is a oligopolistic

market where in all the companies are fighting for market share.

Hence, we can clearly infer that the competitive rivalry is HIGH in this industry.

The final verdict is that the industry is lucrative for several big companies to fight for market

share as the country population with its market evolving constantly and as well as the GDP is

growing.

Macro Environment Analysis

Political Environment

• Indian government auto policy aimed at promoting an integrated, phased and conducive

growth of the Indian automotive industry.

• Allowing automatic approval for foreign equity investment up to 100 per cent, with no

minimum investment criteria.

• Establish an international hub for manufacturing small, affordable passenger cars as well as

tractors and two wheelers.

• Ensure a balanced transition to open trade at minimal risk to the Indian economy and local

industry.

• Assist development of vehicles propelled by alternate energy sources.

• Laying emphasis on R&D activities carried out by companies in India by giving a weighted tax

deduction of up to 150 per cent for in-house research and R&D activities.

• Plan to have a terminal life policy for CV along with incentives for replacement for such

vehicles.

• Promoting multi-modal transportation and the implementation of mass rapid transport

systems.

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Economic Environment

• The Indian economy has grown at 8.5 per cent per annum.

• The manufacturing sector has grown at 8–10 per cent per annum in the last few years.

• More than 90 per cent of the CV purchase is on credit.

• Finance availability to CV buyers has grown in scope during the last few years.

• The increased enforcement of overloading restrictions has also contributed to an increase in

the number of CVs plying on Indian roads.

• Several Indian firms have partnered with global players. While some have formed joint

ventures with equity participation, others have entered into technology tie-ups.

• Establishment of India as a Manufacturing hub, for mini, compact cars, OEMs, and for auto

components.

Social Environment

• Growth in urbanization, 4th largest economy by PPP index.

• Upward migration of household income levels.

• Increase in PPP, led to the increase in market share of compact cars.

• 85% of Cars are financed in India (15% in China).

• Cars priced below USD 12000 accounts for nearly 80% of the market.

• Vehicles priced between USD 7000 –12000 form the largest segment in the passenger car

market.

• Indian customers are highly discerning, educated and well informed. They are price sensitive

and put a lot of emphasis on value for money.

• Preference for small and compact cars. They are socially acceptable, even amongst the well-

off.

• Preference for fuel efficient cars with low running costs. The Tata Indica has the lowest

running cost at US 8.5 cents per mile.

Technological Environment

• With the entry of global companies into the Indian market, advanced technologies, both in

product and production processes have developed.

• With the development or evolution of alternate fuels, hybrid cars have made entry into the

market.

• Few global companies have setup their R&D centers in India.

• Major global players like Audi, BMW, and Hyundai etc. have setup their manufacturing units

in India.

• Government initiatives regarding tax rebates have led to global players setting up their R&D

centers in India.

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• Govt. initiatives in establishing NATRIP network across the country will further lead to

enhancing R&D and technological advancements.

Ecological Environment

Automotive regulations in India

Status of Indian regulation no. of regulations

Fully / Partially aligned 43

In process of being aligned 32

Items /Regulations to be covered 39

Total 114

Physical infra structure such as roads and bridges affect the use of automobiles. If there

is good availability of roads or the roads are smooth then it will affect the use of

automobiles.

Physical conditions like environmental situation affect the use of automobiles. If the

environment is pleasant then it will lead to more use of vehicles.

Technological solutions helps in integrating the supply chain, hence reduce losses and

increase profitability.

With the entry of global companies into the Indian market, advanced technologies, both

in product and production process have developed.

With the development or evolution of alternate fuels, hybrid cars have made entry into

the market.

Few global companies have setup R&D center in India.

Major global players like Audi, BMW, etc. Have setup their manufacturing units in India.

Legal Environment

Legal provision relating to environmental population by automobiles.

Legal provisions relating to safety measures.

Confirms the government’s intention on harmonizing the regulatory standards with the

rest of the world.

Indian government auto policy aimed at promoting an integrated, phased and

conductive growth of the Indian automobile industry.

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48 Maruti Suzuki India Ltd.

Establish an international hub of manufacturing small, affordable passenger cars.

Ensure a balanced transition to open trade at minimal risk to the Indian economy and

local industry.

In India the Rules and Regulations related to driving license, registration of motor vehicles,

control of traffic, construction & maintenance of motor vehicles etc are governed by the Motor

Vehicles Act 1988 (MVA) and the Central Motor Vehicles rules 1989 (CMVR). The Ministry of

Shipping, Road Transport & Highways (MoSRT&H) acts as a nodal agency for formulation and

implementation of various provisions of the Motor Vehicle Act and CMVR.

In order to involve all stake holders in regulation formulation, MoSRT&H has constituted two

Committees to deliberate and advise Ministry on issues relating to Safety and Emission

Regulations, namely –

CMVR- Technical Standing Committee (CMVR-TSC)

Standing Committee on Implementation of Emission Legislation (SCOE)

CMVR- Technical Standing Committee (CMVR-TSC) –

This Committee advises MoSRT&H on various technical aspects related to CMVR. This

Committee has representatives from various organisations namely; Ministry of Heavy Industries

& Public Enterprises (MoHI&PE)), MoSRT&H, Bureau Indian Standards (BIS), Testing Agencies

such as Automotive Research of India (ARAI), Vehicle Research Development & Establishment

(VRDE), Central Institute of Road Transport (CIRT), industry representatives from Society of

Indian Automobile Manufacturers (SIAM), Automotive Component Manufacturers Association

(ACMA) and Tractor Manufacturers Association (TMA) and representatives from State

Transport Departments. Major functions the Committee is:

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o To provide technical clarification and interpretation of the Central Motor Vehicles

Rules having technical bearing, to MoRT&H, as and when so desired.

o To recommend to the Government the International/ foreign standards which can

be used in lieu of standard notified under the CMVR permit use of

components/parts/assemblies complying with such standards.

o To make recommendations on any other technical issues which have direct

relevance in implementation of the Central Motor Vehicles Rules.

o To make recommendations on the new safety standards of various components for

notification and implementation under Central Motor Vehicles Rules.

o To make recommendations on lead time for implementation of such safety

standards.

o To recommend amendment of Central Motor Vehicles Rules having technical

bearing keeping in view of Changes in automobile technologies.

CMVR-TSC is assisted by another Committee called the Automobile Industry Standards

Committee (AISC) having members from various stakeholders in drafting the technical

standards related to Safety. The major functions of the committee are as follows:

o Preparation of new standards for automotive items related to safety.

o To review and recommend amendments to the existing standards.

o Recommend adoption of such standards to CMVR Technical Standing Committee

o Recommend commissioning of testing facilities at appropriate stages.

o Recommend the necessary funding of such facilities to the CMVR Technical

Standing Committee, and

o Advise CMVR Technical Standing Committee on any other issues referred to it

The National Standards for Automotive Industry are prepared by Bureau of Indian Standards

(BIS). The standards formulated by AISC are also converted into Indian Standards by BIS. The

standards formulated by both BIS and AISC are considered by CMVR-TSC for implementation.

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Standing Committee on Implementation of Emission Legislation (SCOE) – This Committee

deliberates the issues related to implementation of emission regulation. Major functions of

this Committee are –

o To discuss the future emission norms

o To recommend norms for in-use vehicles to MoSRT&H

o To finalise the test procedures and the implementation strategy for emission

norms

o Advise MoSRT&H on any issue relating to implementation of emission

regulations.

Based on the recommendations from CMVR-TSC and SCOE, MoSRT&H issues notification for

necessary amendments / modifications in the in Central Motor Vehicle Rules.

In addition, the other Ministries like Ministry of Environment & Forest (MoEF), Ministry of

Petroleum & Natural Gas (MoPNG) and Ministry of Non-conventional Energy Sources are also

involved in formulation of regulations relating to Emissions, Noise, Fuels and Alternative Fuel

vehicles.

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Strategic Pricing Analysis

The prices of the cars of MSIL have generally been set to target the Lower middle-class and

middle class families in India. Their pricing strategy is based on their continuing vision of

“Putting India on Four Wheels”. Their prices are so designed as to enable people to upgrade

from 2-wheelers to 4-wheelers and already 4-wheeler owners to upgrade to a better 4-wheeler

offered by the company.

In 2007, though the company changed its Price strategy as it was being labeled as Low-Price

small-car manufacturer. They launched plans of a new Car in the Premium Car segment

(Kizashi) to remove this label attached to the company’s reputation.

The following chart shows the various Products and their Price ranges of the Cars of MSIL in

India.

The company has set its pricing in following manner given below:

1. Setting an Objective ( Maximum Market Share )- Maruti believes in maximizing the

market share as higher sales volumes will lead to the lower unit cost and higher long run

profit. The company is the market leader in India for last two decades.

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2. Determining the Demand –Maruti estimates the demand curve and also the price

elasticity of demand. Based on these two principles Maruti had several times lowered

their prices when the market starts stagnating.

3. Estimates Cost- In this industry the companies keep account of all the costs as 75% of

the cost is Raw Materials and the industry is capital intensive by nature.

4. Analyzing the Competitors – The company has always made price points through it can

enter into the price points of various within their own brand lines and as well as

between the brand lines of the competitors in order the capture the maximum

consumers.

5. Pricing Methodology (Value Pricing)-

6. Price Adaptations (Geographical Pricing ) – Maruti has always given differential pricing

as per metropolitan cities. There are price differentials Mumbai, Delhi, Kolkata and

Chennai. This differential pricing is in terms of the product form pricing and location

pricing. The company also gives allowance and discounts and as well as promotional

schemes.

Maruti as a market leader, MUL adopted aggressive pricing strategies.

(I) Company had products at various price points.

In the early 2000s' when the passenger car industry was witnessing stagnant growth, Maruti

slashed the prices of its various products, to revive the industry. Khattar said, "We believe that

Maruti Udyog should take the lead in getting the market up and going once again. This is why

MUL unleashed an aggressive pricing strategy." He called price-cut a, secondary evolution,,

which would attract more people to cars, thus, helping the overall growth of the market.

In early 2000. In spite of the increased sales tax and higher costs due to new technology inputs,

MUL, opted price cuts. Explaining the price cuts, Khattar said, “The focus was on offering new

upgraded vehicles at a low price. However' industry analysts perceived these price cuts as a

desperate measure to revive flagging sales and regain market share.

Maruti caters to all segments and has a product offering at all price points. It has a car priced at

Rs.1, 87,000.00 which is the lowest offer on road. Maruti gets 70% business from repeat buyers

who earlier had owned a Maruti car. Their pricing strategy is to provide an option to every

customer looking for up gradation in his car. Their sole motive of having so many product

offering is to be in the consideration set of every passenger car customer in India. Here is how

every price point is covered.

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53 Maruti Suzuki India Ltd.

Product line pricing – Maruti pricing is based on Product line pricing as above we can infer that

the Versa brand has several price points where the brand variants shall provide different within

a price range.

Optional Feature Pricing – Maruti also provides optional feature pricing example -Maruti 800

had A/C and Non A/C variants which have different price points. Thus the company caters to

huge segment of consumers.

(II) Offering one stop shop to customers or creating different streams.

Maruti has successfully developed different revenue streams without making huge investments

in the form of MDS, N2N, Maruti Insurance and Maruti Finance. These help them in making the

customer experience hassle free and helps building customer satisfaction.

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54 Maruti Suzuki India Ltd.

Maruti Finance: In a market where more than 80% of cars are financed, Maruti has strategically

entered into this and has successfully created a revenue stream for Maruti. This has been found

to be a major driver in converting a Maruti car sale in certain cases. Finance is one of the major

decision drivers in car purchase. Maruti has tied up with 8 finance companies to form a

consortium. This consortium comprises Citicorp Maruti, Maruti Countrywide, ICICI Bank, HDFC

Bank, Kotak Mahindra, Sundaram Finance, Bank of Punjab and IndusInd Bank Ltd.( erstwhile-

Ashok Leyland Finance).

Maruti Insurance : Insurance being a major concern of car owners. Maruti has brought all car

insurance needs under one roof. Maruti has tied up with National Insurance Company, Bajaj

Allianz, New India Assurance and Royal Sundaram to bring this service for its customers. From

identifying the most suitable car coverage to virtually hassle-free claim assistance it's your

dealer who takes care of everything. Maruti Insurance is a hassle-free way for customers to

have their cars repaired and claims processed at any Maruti dealer workshop in India.

True Value – Initiative to capture used car market: Another significant development is MUL's

entry into the used car market in 2001, allowing customers to bring their vehicle to a 'Maruti

True Value' outlet and exchange it for a new car, by paying the difference. They are offered

loyalty discounts in return. This helps them retain the customer. With Maruti True Value

customer has a trusted name to entrust in a highly unorganized market and where cheating is

rampant and the biggest concern in biggest driver of sale is trust. Maruti knows its strength in

Indian market and has filled this gap of providing trust in Indian used car market. Maruti has

created a system where dealers pick up used cars, recondition them, give them a fresh

warranty, and sell them again. All investments for True Value are made by dealers. Maruti has

build up a strong network of 172 showrooms across the nation. The used car market has a huge

potential in India. The used car market in developed markets was 2-3 times as large as the new

car market.

N2N: Car maintenance is a time-consuming process, especially if you own a fleet. Maruti's N2N

Fleet Management Solutions for companies takes care of the A-Z of automobile problems.

Services include end-to-end backups/solutions across the vehicle's life: Leasing, Maintenance,

Convenience services and Remarketing.

Maruti Driving School (MDS): Maruti has established this with the goal to capture the market

where there is inhibition in buying cars due to inability to drive the car. This brings that

customer to Maruti showroom and Maruti ends up creating a customer.

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55 Maruti Suzuki India Ltd.

Brand Ambassadors

Tag Lines for various Maruti brands:

1. Maruti Suzuki - Way of Life - The theme of the pavilion symbolizes the company's

philosophy of constantly trying to find what the customers want and creating products and

services to delight and enrich the customers' lives. The four critical pillars of Way of Life

namely Value, Spirited, Sporty and Straight Forwardness will be showcased though the four

neat zones of the pavilion.

2. Kizashi - A Sign of Great Things to Come

3. Grand Vitara - Play it Your Way

4. DZire - The Heart Car

5. Maruti SX4 - Men are Back

6. Maruti Swift - You're The Fuel

7. Ritz - Live The Moment

8. A-Star - Stop @ Nothing

9. Maruti EECO - Happiness Family Size!

10. Wagon R - For the Smarter Race

11. Maruti Gypsy -There is a Gypsy in everyone

12. Omni - Fits All

13. Zen Estillo - Take a Fresh View of Life

14. Alto - Lets Go.

15. Maruti 800 - Change your Life

Brand Ambassadors

1. R Madhavan for Wagon R - South Indian actor R Madhavan, who is also quite popular in

Hindi cinema, was chosen as the brand ambassador of Wagon R. The company felt that he

was a true personification of the WagonR brand. Brand WagonR stands for being

Contemporary, Pragmatic, Intelligent, Leader-like, Balanced and Caring. The same

attributes stand true for Madhavan as well. He would represent WagonR’s values,

strengthen the Brand further, and at the same time add youthfulness to the Brand.

The company brought on board an ambassador whom they felt could connect with their

target group i.e. basically urban upper middle and middle class families. Madhavan was well

known across the country and was not divided as a face of the North or the South and this

was an important fact while choosing him. Additionally, his popularity in South added to the

brand's popularity in the South Indian markets.

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56 Maruti Suzuki India Ltd.

After conducting a research, the company was sure that associating with a personality such

as Madhavan will certainly reinforce the brand values of WagonR with the TG at an all-India

level. Additionally, the tie-up would give a boost to WagonR’s KPI (Key Performance

Indicators) in key Southern cities such as Bengalaru, Hyderabad, Chennai, Cochin etc.

2. Zubin Antalia for Maruti Suzuki – Maruti Suzuki contributes towards road safety through its

Institute of Driving Training and Research (IDTR) and Maruti Driving School (MDS) initiatives

and has already trained around 450,000 persons in safe driving in the last few years.

Through the National Road Safety Mission, the company plans to train an additional

500,000 people in safe driving in the next three years across India. Of the 500,000 people to

be trained, at least 100,000 will be people from the underprivileged section of society, who

are keen to take driving as a profession.

Zubin Antalia, in the Maruti Suzuki-Autocar Young Driver contest, beat 32 other

competitors from across the country and was chosen as Maruti Suzuki's ambassador for

safe driving and promoting road safety awareness. Through this initiative, the company

wanted to encourage a safe driving culture among the young drivers today.

3. Farhan Akhtar for A –Star - The success of Rock On made Farhan popular among the

youth. He was chosen as the brand ambassador of A-Star to attract his new fan following as

Maruti was the only brand which could make ample cars as the 'demand' would be more

'rocking' than the 'supply'!

4. JohnAbraham for SX4 - John is one of the big names in the Bollywood circuit where

advertisements are concerned. His tough image coupled with films like Dhoom to his credit,

makes the handsome hunk an ideal model for most products. Prior to this, the actor has not

been associated with any car brand but signed up for all products associated with the motor

and bike industry, be it bikes or lubricants.

5. Abhishek & Amitabh Bachhan for Versa - Versa has versatile characteristics to ensure

driving pleasure, easy maneuvering, spacious interiors, safety and flexibility. The company

chose Big B as he is idolized by most Indians and is a respectful personality in Bollywood.

The Bachhans together epitomize the best of both worlds... just like the VERSA, which offers

the best combination of space and car-like drivability.

To be fair, the Big B magic did work and the ads created significant interest, drawing people

into the showroom. But perhaps the positioning itself was faulty as people were expecting a

larger than life car, just like the brand ambassador. As a result, Versa was re-positioned as a

family car, with the core proposition being, the joy of travelling together. Due to the new

positioning, Versa started doing well and witnessed an upswing.

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Future strategy of Maruti

FY2010-11. The GDP grew at 8.5 per cent, aided by recovery in agriculture and good

performance in the industry and services sector. As a consequence, the domestic car market

remained buoyant and posted a healthy growth rate of 29 per cent, higher than 26 per cent

achieved in the previous year (FY2009-10), which was substantially higher than what was

anticipated at the beginning of the year.

Despite the unexpected demand for cars and the capacity limitations in the Company, we could

produce and sell 1,271,005 units, a growth of 24.8 per cent over the previous year. This became

possible due to higher levels of productivity and many innovative practices at the shop floor

level. The vendors, despite being taken by surprise, also managed to support the Company in its

efforts to increase production. As a consequence, the Company was able to marginally improve

its market share.

Customers continued to rate the Company best in sales and service satisfaction, as measured

by JD Power surveys. The Company has now been rated best in service satisfaction for eleven

years in a row.

The Company has instituted projects to further strengthen its market position and profitability

and to build R&D capability and capacity for the future. Production capacity is being enhanced

with two more plants at Manesar. Each of these plants will have an installed annual capacity of

250,000 cars.

The Company developed in-house i-GPI (Integrated Gas Port Injection) Technology and

launched factory-fitted CNG variants for five of its models: Alto, WagonR, Eeco, Estilo and SX4.

This i-GPI technology delivers higher fuel efficiency compared to conventional CNG cars.

Besides, the loss of power compared to gasoline engine cars, a shortcoming of conventional

CNG technology, is negligible in the case of i-GPI. The Company believes that once CNG

availability improves across the country, it could become a popular option owing to its low cost

and environment friendliness.

Apart from launching new products, the Company added 131 new sales outlets to reach 933

outlets in 668 cities and increased its service reach to 1,395 cities with 2,946 outlets. The

Company’s network is now servicing about 1.2 million vehicles every month. With increasing

service load, the importance of training has taken priority. The Company has initiated tie–ups

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58 Maruti Suzuki India Ltd.

with 28 ITIs (Industrial Training Institutes) to enhance availability of technical manpower at

workshops.

On the environmental front, in FY2010-11 the Company made improvements on its energy and

water consumption at its manufacturing sites at Gurgaon and Manesar. Emission levels at both

sites were strictly monitored. To reduce emissions due to transportation, the Company is

working on a project to transport cars by rail.

The Company benefited from sales in both the top cities and the rural hinterland with the help

of its network reach. In the last four years, rural sales have grown to contribute 20 per cent of

total domestic sales. About 40 per cent of the Company’s sales outlets are in the rural format,

with a scaled down investment that enables viability on lower volumes. Thus focusing on this

segment also reaps benefits for longer duration for the company.

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59 Maruti Suzuki India Ltd.

Maruti Suzuki India unleashed all-new 'XA Alpha Concept' sports utility vehicle at the Auto Expo

2012 in New Delhi. It has been developed in-house by Maruti Suzuki's research and

development team. It is expected that XA Alpha Concept SUV will transform into production

vehicle by the end of 2013 and it is also expected that it will carry most of the design and styling

elements of the concept. It will be available in both petrol and diesel. The petrol variant will be

powered by K-series engine which is very fuel efficient. The diesel variant will be powered by

Fiat's tried and tested 1.3 litre diesel engine. In terms of styling the XA Alpha looks very

muscular featuring huge alloy wheels, thick c-pillar and L-shaped tail lamps. It is expected that

XA Alpha will replace the aging Gypsy and will compete with the likes of Ford EcoSport, Renault

Duster and Premier Rio.

Profit and Loss Account (Forecasted)

Parameters 2007-08 2008-09 2009-10 2010-11 2011-12 2012-13

1 Volumes (Nos)

Domestic 870,790.0

1,132,739.

0

1,313,977.

2 1,524,213.6

Export 147,575.0 138,266.0 160,388.6 186,050.7

Total

1,018,365.

0

1,271,005.

0

1,477,543.

3 1,717,644.1

2 Gross Sales

209,493.

0

230,852.

0 318,073.0 404,190.0 469,870.9 546,224.9

Vehicles 298,534.0 380,057.0 440,866.1 511,404.7

Spares, dies,

moulds 19,539.0 24,133.0 27,994.3 32,473.4

3 Excise duty 30,890.0 27,269.0 28,488.0 42,908.0 64,627.1 74,967.4

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60 Maruti Suzuki India Ltd.

4 Net sales (2-3)

178,603.

0

203,583.

0 289,585.0 361,282.0 405,243.8 436,437.3

5 Income from

services 759.0 970.0 1,404.0 1,715.0 2,250.5 2,953.1

6 Total operating

income 290,989.0 362,997.0 452,824.1 564,879.7

7 Other income 8,371.0 9,985.0 10,243.0 12,227.0 13,872.9 15,740.4

8 Total income

187,733.

0

214,538.

0 301,232.0 375,224.0 466,697.0 580,620.1

9 Consumption of

raw materials

130,342.

0

150,598.

0 224,134.0 287,943.0 350,022.7 435,465.0

10 Employee costs 3,562.0 4,711.0 5,456.0 7,036.0 8,828.2 11,076.8

11

Manufacturing,

Admin and other

costs 10,793.0 15,685.0 17,972.0 29,178.0 40,646.8 56,623.6

12

Selling and

distribution

expenses 5,602.0 7,382.0 9,160.0 9,600.0 11,488.1 13,747.5

13 Financial expenses 335.0 244.0 0.0 0.0

14 Depreciation 5,682.0 7,065.0 8,250.0 10,135.0 12,291.3 14,906.4

15 Total expenditure 265,307.0 344,136.0 423,277.1 531,819.3

16 PBT (8-15) 25,030.0 16,758.0 35,925.0 31,088.0 43,419.9 48,800.7

17 Current tax 7,509.0 4,592.0 11,230.0 8,101.0 13,026.0 14,640.2

18 Deferred tax 26.0 -118.0 -281.0 101.0 101.0 101.0

19 PAT (16-17-18) 17,308.0 12,187.0 24,976.0 22,886.0 30,292.9 34,059.5

Risk Factors

The Company operates in an environment which is affected by various factors some of which

are controllable while some are outside the control of the Company. The activity of risk

management in the Company is reviewed by the Audit Committee through a management

subcommittee, namely the Executive Risk Management Committee (ERMC). The ERMC consists

of the Managing Director & CEO and all executive officers of the Company. It reviews the risk

management activities on a regular basis in addition to scanning for any new risks that may

arise due to changes in the business environment. While the possibility of a negative impact

due to one or more such risks cannot be totally precluded the Company proactively takes

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61 Maruti Suzuki India Ltd.

reasonable steps and makes efforts to mitigate significant risks that may affect it. Some of the

risks that are potentially significant in nature and need careful monitoring are listed hereunder:

1. Macroeconomic Factors

2. Preparedness of value chain partners

3. Inappropriate product portfolio

4. Competition product launches

5. Talent acquisition & retention

6. Geographic concentration

7. Changes in government policy and legislation

Outlook

The market for passenger vehicles in India is estimated to grow to 4.5 million to 5 million units

by 2015- 16. Although rising inflation, interest rates and crude oil prices are concerns in the

short term, the Company is optimistic about the medium and long term. The Company is

gearing up for growth.

Initiatives to expand manufacturing capacity are underway. The Company’s products are well

received by customers. SMC’s design philosophy of aggressive and sporty cars, K-series

technology and the popularity of the Company’s diesel car offerings augur well for the future.

To supplement this, the Company is stepping up its R&D capability to work in a unified way with

SMC and offer a regular pipeline of new and refreshed models. The Company’s network of sales

and service outlets continues to be its strength. Network is set to expand in the future, and will

help tap opportunity as economic prosperity widens and deepens in the country. High

commodity prices and adverse currency movements continue to be the challenges. Besides

existing efforts to boost productivity, reduce waste and enhance value, the Company is working

on new initiatives like higher localization and hedging to reduce the impact of commodity prices

and currency.

The Company is conscious that talent will be the key to achieving the goals envisaged for the

medium term. Specific initiatives are being taken in the area of recruitment and development.

The Company is working closely with suppliers and dealers to prepare them for growth as well

as higher competitive intensity.