1

STUDENT DECLARATION
This is to certify that I have completed the Project titled Marketing Strategies of
Maruti Suzuki Ltd. under theguidance of Mrs.Charu Mohla in partial
fulfillment of the requirement for the award of Degree of Bachelor of Business
Administration at Maharaja Agrasen Institute of Management Studies, Delhi. This is
an original piece of work & I have not submitted it earlier elsewhere.

Date:

Signature:

Place:

Name: Arunabh Kumar

University Enrollment No. : 02414701714

CERTIFICATE FROM THE INSTITUTE GUIDE

This is to certify that the summer project titledMarketing Strategies of Maruti
Suzuki Ltd.is an academic work done by Arunabh Kumar submitted in the
partial fulfillment of the requirement for the award of the degree of Bachelor of
Business Administration at Maharaja Agrasen Institute of Management Studies, Delhi,
under my guidance & direction.
To the best of my knowledge and belief the data & information presented by him/her
in the project has not been submitted earlier.

Signature:
Name of the Faculty: Mrs.Charu Mohla

Designation: Assistant Professor

ACKNOWLEDGEMENT

I wish to thank all those with whom I have worked, interacted and whose thoughts
and insights helped me in furthering my knowledge and understanding of the project.

I would especially like to express my gratitude and sincere thanks to Director Dr.
C.S. Sharma and assistant professor Mrs.Charu Mohla whose excellent teaching
has left an undeniable print on my mind leading me to prepare this project report in a
better way and which would not have been possible without her support and active
guidance. I am highly obliged to them for their opportunity that they gave me to work
onMarketing Strategies of Maruti Suzuki Ltd.. The present report has made me
learn a lot about the marketing.

EXECUTIVE SUMMARY
Passenger cars market is a highly competitive market in the automobile sector and one
of the oldest company operating in the same is Maruti Udyog Ltd. From being the
undisputed leader in the A1 segment after its inception, to being the market leader
with a share of 83.1% in 1997-98, the companies share in the 2001-02 slipped to a
disappointing 47% but later in the year 2003 company again regained its strong
position with a share of 54%. For the year 2005-06 the market share of MUL is
predicted to be around 50%.
The reasons for these fluctuations were the advent of global and new competitors in
the market, i.e Hyundai, Honda, Tata, Mitsubishi etc. Delays in introducing new
models helped competition to nibble away at Marutis commanding market share.
Hyundai launched the Santro (September 1998), Daewoo, the Matiz (October 1998)
and Tata Motors5, the Indica (March 1999). All these models began to offer stiff
competition to Maruti. After the decline in is market share the company realized that
the profile of the Indian car market had changed. The A2 segment was growing faster
than the bread and butter Maruti 800 segment. Maruti also realized that leaving the
basic 800 model unchanged for over 15 years had been a strategic\ blunder.
Maruti realized the need to make up for lost time. In 1999, it launched two new
models, Baleno and Wagon R. Baleno was targeted at the premium segment, while
Wagon R, priced a little above the Zen, was positioned as a multi utility vehicle. By
the early 2000s, Maruti had finalized plans for a more complete product range. The
company announced it would launch one new model every 6-12 months with price
gaps of about Rs. 25,000. In 2000, Maruti introduced 'Alto' (premium small car)
especially for export market. Maruti also launched Versa, the first Multi Purpose
Vehicle, in October 2001. In the following years the company got involved in R & D
and thus launched its revised models of Esteem, Maruti 800, Zen etc. in spite of these
launches and increase in sales volume the companys leader position is under threat.
In the light of the facts stated above, the company should rethink its marketing
strategies so as to maintain its position and tackle competition, else it should be ready
to exit.
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On the basis of secondary data analysis, we have tried to bring out some concerns for
the company, the key issues that is should focus upon, the kind of market situation
that the company should expect in the market in the coming year and the possible
steps it can take so as to curb the threat posed by the rival companies.
An attempt has also been made to bring out the core competencies and strengths of
the company so that it can use the same to cover its weaknesses, face the threats and
grasp the opportunities. The macro-environment factors that act as influencers in the
automobile sector have also been brought out in the report.
About the marketing strategies
In current market scenario, the competition in AUTOMOBILE sector is the highest.
So to remain in the competition all automobile companies have to develop in terms of
technology, look, and other features. MUL as a Indian company is the market leader
in INDIA, but as the globalization is coming up and the govt is encouraging the FDI,
it is getting tougher for MUL to maintain its market share. As many MNC are coming
to INDIA with improved technology & features, MUL has to improve its existing
technology & have to add new features to rope down the existing as well as the new
customers. MUL has to add new products to its product mix. MUL has to go for more
promotion to catch up the MNCs.
With the changing economic environment the auto industry is heading for a complete
renaissance. The margin of the company is under the lens, so the companies are doing
what ever it can to improve its bottom line.
Most of the respondents come to know about products of the company in the current
market scenario i.e. 85% responds.

TABLE OF CONTENTS
TOPIC
Chapter-1 INTRODUCTION
OVERVIEW OF INDUSTRY AS A WHOLE
PROFILE OF THE ORGANIZATION

ORIGIN

RECENT ACHIEVEMENTS

MISSION & VISION

PRODUCTS

ORGANIZATION STRUCTURE

Chapter-2 FINDINGS

Chapter-3 RECOMMENDATIONS

BIBLIOGRAPHY

INTRODUCTION

INTRODUCTION
Overview of Industry as a whole
Industry Profile

The birth of the car as we know it today occurred over a period of years. It was only
in 1885 that the first real car rolled down on to the streets. The earlier attempts,

though successful, were steam powered road-vehicles.

The first self-propelled car was built by Nicolas Cugnot in 1769 which could attain
speeds of upto 6 kms/hour. In 1771 he again designed another steam-driven engine
which ran so fast that it rammed into a wall, recording the worlds first accident. In
1807 Franois Isaac de Rivaz designed the first internal combustion engine. This was
subsequently used by him to develop the worlds first vehicle to run on such an
engine, one that used a mixture of hydrogen and oxygen to generate energy.
This spawned the birth of a number of designs based on the internal combustion
engine in the early nineteenth century with little or no degree of commercial success.
In 1860 thereafter, Jean Joseph Etienne Lenoir built the first successful two-stroke gas
driven engine. In 1862 he again built an experimental vehicle driven by his gasengine, which ran at a speed of 3 kms/ hour. These cars became popular and by 1865
could be frequently espied on the roads.
The next major leap forward occurred in 1885 when the four stroke engine was
devised. Gottileb Damlier and Nicolas Otto worked together on the mission till they

10

fell apart. Daimler created his own engines which he used both for cars and for the
first four wheel horseless carriage. In the meanwhile, unknown to them, Karl Benz,
was in the process of creating his own advanced tri-cycle which proved to be the first
true car. This car first saw the light of the day in 1886.
The season of experiments continued across the seas in the United States where Henry
ford began work on a horseless carriage in 1890. He went several steps forward and in
1896, completed his first car, the quadricycle in 1896. This was an automobile
powered by a two cylinder gasoline engine. The ford motor company was launched in
1903 and in 1908 he catapulted his vehicle, model t ford to the pinnacle of fame.
Continuing with his innovations, he produced this model on a moving assembly line,
thus introducing the modern mass production techniques of the automobile industry.
The modern car, therefore comes from a long list of venerated ancestors, and its
lineage will, hopefully grow longer as we progress!

with the invention of the wheel in 4000 B.C., mans journey on the road of
mechanized transport had begun. Since then he continually sought to devise an
automated, labour saving machine to replace the horse. Innumerable attempts reached
conclusion in the early 1760s with the building of the first steam driven tractor by a
French captain, Nicolas Jacob Cugnot. It was however left to Karl Benz and Gottlieb

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Damlier to produce the first vehicles powered by the internal combustion engine in
1885. It was then that the petrol engine was introduced, which made the car a
practical and safe proposition. The cars in this period were more like the cars on our
roads today.
With cars came the era of speed, The first ever land-speed record was established
about a 100 years back, in 1898. Count Gaston de Chasseloup-Laubat of France drove
an electric car (in Acheres near Paris) at a speed of 39.24 miles per hour. This flagged
off the era of wheels racing, which lasted till 1964, after which jet and rocket
-propelled vehicles were allowed. Then onwards, it has been one big journey...on the
roads.
Hyundais market share has increased from 15% in 2002 to 17% in 2003. Though the
market share of Maruti Udyog is constant at 56%. Telco (Tata Motors) has also gained
market. But to gain second position in the market in just 5 years is really
commendable. Hyundai has been growing ever since its inception unlike other
multinationals who have been losing ground with each passing day.
An Overview: Automobile Industry in India
The automobile industry is one of the largest in terms of employment and value
addition. As a leader in product and process technologies for the manufacturing
sector, it has been accepted as one of the important drivers of economic growth.
Global trends indicated that the auto market has moved from the growth and
development phase to the consolidation phase. The Japanese automobile majors,
besides technological innovations, implemented some modern management
philosophies, which were gradually adopted by the automobile industry of the United
States and other European countries. Currently, almost fifty percent of the global
passenger car production comes from three countries, viz., the US (20%), Japan
(19%) and Germany (12%). In the commercial vehicle category, the share of the US is
46 per cent followed by Japan (11%) and China (9%).In both these categories of
vehicles, India's share in the total world production is 1 per cent.

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The first motorcar on the streets of India was seen in 1898. Then for the next fifty
years, cars were imported to satisfy domestic demand. Between 1910 and 20's the
automobile industry made a humble beginning by setting up assembly plants in
Mumbai, Calcutta and Chennai. The import/assembly of vehicles grew consistently
after the 1920's, crossing the 30,000 mark in 1930. In 1946, Premier Automobile Ltd
(PAL) earned the distinction of manufacturing the first car in the country by
assembling 'Dodge DeSoto' and 'Plymouth' cars at its Kurla plant. Hindustan Motors
(HM), which started as a manufacturer of auto components graduated to manufacture
cars in 1949. Indian roads were ruled by Ambassador Car from Hindustan Motors and
the Fiat from Premier Auto Ltd. for many of the initial years
In 1952 the GOI asked assembly plants, which did not have plans to set up
manufacturing facilities, to shut operations. As a result General Motors, Ford and
other assemblers closed operations in the country. The year was 1954 and this
decision of the government marked a turning point in the history of the Indian car
industry. The GOI also had a say in what type of vehicle each manufacturer should
make. Therefore, each product was safely cocooned in its own segment with no fears
of any impending competition. Also, no new entrant was allowed even though they
had plans of a full-fledged manufacturing program. The restrictive set of policies was
chiefly aimed at building an indigenous auto industry. However, the restrictions on
foreign collaborations led to limitations on import of technology through technical
agreements. In the absence of adequate technology and purchasing power, the car
industry grew at a snail's pace in the 60s. The demand for cars in 1960 was to the
tune of 15,714. In the next two decades the number increased to 30,989 i.e. a CAGR
of only 3.5 per cent.
In the early 80's, The GOI entered the car business, with a 74% stake in Maruti Udyog
Ltd (MUL), the joint venture with Suzuki Motors Ltd of Japan. The very face of the
industry was changed for ever in 1983 with the entry of public sector Maruti Udyog in
a joint venture with the Suzuki Corporation of Japan . Car sales grew by 42 per cent in
1985 after Maruti 800 was launched. Thanks to MUL car sales registered a CAGR of
18.6 per cent i.e. from 1981 to 1990.

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In 1985, the GOI announced its famous broad banding policy which gave new
licenses to broad groups of automotive products like two and four-wheeled vehicles.
Though a liberal move, the licensing system was still very much intact. MUL
introduced 'Maruti 800' in 1983 providing a complete facelift to the Indian car
industry. The car was launched as a "peoples car" with a price tag of Rs40, 000. This
changed the industry's profile dramatically. Maruti 800 was well accepted by middleincome families in the country and its sales increased from 1,200 units in FY84 to
more than 200,000 units in FY99. However in FY2000, this figure came down to
189,184 units, due to rising competition from MARUTI's 'Santro', Telco's Indica and
Daewoo's 'Matiz'.
MUL extended its product range to include vans, multi-utility vehicles (MUVs) and
mid-sized cars. The company has single handedly driven the sales of cars in the
country from 45,000 in FY84 to 409,951 cars by FY2000, cornering around 79.6%
market share.With increasing competition from new entrants, this market share has
plummeted to almost 62% in FY2000.
A brief 3-year downturn till 1993 and car sales bounced back to register a 17 per cent
growth rate in 1997.Since then, the economy slumped into recession and sales of cars
remained quite stagnant FY97 and FY99. The Financial year 2000 has, however, been
the turnaround year for the Auto industry with the economy looking up. The industry
achieved volume sales of 638,815 units as against 409,951 units in 1999, thus,
crossing the half million mark for the first time. Therefore, at present, the CAGR
between FY96 and FY2000 stands at 16.6 per cent. (Former finance minister,
Manmohan Singh's liberalization policy was major driver which led to industry
undergoing this complete transformation.) Overwhelmed by newer models from new
and existing players had to an impressive shift from a constrained supply situation to a
surplus one. Within the past decade, about 30 models have entered the Indian market
with a number of models still awaiting launch. The de-licensing of auto industry in
1993 opened the gates to a virtual flood of international automakers into the country
with an idea to tap the large population base of 950mn people. Also the lifting of
quantitative restrictions on imports by the recent policy is expected to add up to the
flurry of foreign cars in to the country.

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Many companies have entered the car manufacturing sector, to tap the middle and
premium end of car industry. The new entrants are Daewoo (Matiz), Telco (Indica)
and MARUTI (Santro) in upper end of economy car market. GM, Ford, Peugeot,
Mitsubishi, Honda and Fiat have entered the mid-sized car segment and MercedesBenz is in the premium end of market. Car manufacturers like Malyasia based Proton
are also in line to hit the Indian ramp.
The Indian passenger car industry is relatively recent in origins. Except the ubiquitous
Ambassador and the Premier Padmini's there was not much moving around with an
Indian tag. The restrictive policies of the Indian government did not allow foreign
players to set shop in India and in the absence of adequate technology and purchasing
power it resulted in the slow growth of the industry even after a long time since
independence. The demand for cars increased from 15,714 in FY60 to 30,989 in FY80
at a CAGR of only 3.5%. The entry of Maruti Udyog Ltd, a GoI JV with Suzuki of
Japan, in 1983 with a so-called "peoples" car and a more favorable policy framework
resulted in a CAGR of 18.6% in car sales from FY81-FY90.
After witnessing a downturn from FY90 to FY93, car sales bounced back to register
17% growth rate till FY97. Since then, the economy slumped into recession and this
affected the growth of the

automobile industry as a whole. As a result car sales

remained almost stagnant in the period between FY97 and FY99. However, with the
revival in the economy, FY2000 turned out to be a significant year for the industry in
which it recorded volume sales of

638,815 units as against 409,951 units in the

previous year. Thus, the CAGR for the period FY96 - FY2000 stands at 16.6%.
On the basis of price, the Indian car industry can be classified into economy or the
'small' car (up to Rs0.3mn), mid-size (Rs0.3-0.5mn), luxury car (Rs0.5-1mn) and
super luxury car segments (above Rs1mn). Economy segment dominates with a
market share of about 80% of total car sales in FY2000.
Taking into consideration the rise in expendable income levels and necessity of
personal transportation as a result of inefficient or deficient public transportation
means, the demand for cars is expected to increase. FY2000 was an indicator of the
growth phase to follow, registering a 20-year high growth rate of 56%. The second
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highest growth was recorded in 1985 at 42% when Maruti had entered the market.
Riding on the popularity of the small car segment, coupled with the boost in sales of
the mid size segment, total sales grew by 56%. However, such high level of growth is
highly unsustainable in the long run given the fact that there is an as yet unutilized
capacity in the industry. This would make the question of survival important and
carmakers would have to play their cards well to remain in contention. Moreover,
sales growth in FY2000 was calculated on a lower base of FY99.
Exports are expected to increase as a result of over capacity in the domestic car
industry and the government's policy to bring in a more liberal regime on the foreign
exchange front. The flood of new entrants into the car industry as a result of
liberalization has led to a complete transformation of the sector. The car segment is
flooded with new models from new and existing players, a visible shift from a
constrained supply situation to a surplus. In the last decade or so, as many as 30
models have invaded the market making it a case of embarrassment of
riches. Moreover a lot many models are waiting to hit the ramp by the end of the year.
The capacity of car production has increased substantially in the last three years and is
expected to grow manifold in the coming years. The low capacity utilization will
force a marketing war between the car manufacturers. The US$ 6.8 billion Indian car
industry has registered a CAGR of 17% between 1998-2003 and is projected by
ACMA (Auto Components Manufacturers Association of India) to grow at a 15%
CAGR till fiscal 2012. The car buyer will be the major beneficiary of the marketing
war in the segment as they will be able to get technologically better products at good
terms and conditions. But with an expected shake out, the threat of discontinuation of
a model is also high

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1.2: PROFILE OF THE ORGANIZATION

1.2.1 Origin:
The company was incorporated in 1981 to take over the assets of the erstwhile Maruti
Ltd. Maruti Ltd set up in June 1971 had been wound up by a High Court order in
1978. The assets of Maruti Ltd were then acquired by the Government under the
Maruti Ltd (Acquisition And Transfer of Undertakings Act, 1980).
The first product, Maruti 800 was launched in 1984. In 1985, the all-terrain vehicle
Gypsy was launched and Maruti sold its 50,000th vehicle. The Maruti 1000 was
launched in 1990 and the Zen in 1993.
The First Customer

Mr. Harpal Singh, Marutis first customer, proudly received the keys of the Maruti
800 car from the Prime Minister Smt. Indira Gandhi on December 14, 1983.
Car Market Scenario
When Maruti began operations in 1983, there were only two other car companies in
India and the total size of the Indian passenger car market was a measly 40,000 units
per year. From the start, Maruti caught the imagination of Indian car customers and
launched four new models, including a hatchback, a mini multipurpose van, an entry

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sedan and a SUV, over the next decade. Each of these models was an instant draw
with the Indian consumers. Suzuki Motor Corporation increased its stake on two
occasions (26>> 40 >> 50 >> controlling stake and brought it to 50 per cent in the
mid 1990s (and to 54% with privatization in 2002company manufactures passenger
cars at its factory in Gurgaon, Haryana. Its installed capacity of 350,000 vehicles is
expected to rise to 450,000 in the year 1999. The company's models include the 800cc
small car, Esteem, Zen and Gypsy.
In the car segment, it had a market share of 83% in FY98, with sales of 345,303 cars.
For the period April '98 to January '99, MUL car sales have dropped by 6.4% to
263,681 compared to 281,697 cars for the corresponding period for FY98.
The company is a significant exporter with exports to over 50 countries. During
FY98, exports also witnessed a drop of 26.87% to 24,757 cars. For the period April
'98 to January '99, MUL car exports dropped by 10% to 17,155 compared to 19,054
cars for the corresponding period in FY98.
In August '98, the company launched the diesel version of the Zen that is powered by
a 1527 cc engine supplied by Peugeot Citreon Motors, France. The company also
intends to launch a diesel version of the Gypsy and a new model in the 800 cc
segments.
The issue resulted in a major dispute with SMC dragging the GOI to the International
Court of Arbitration. At that time, the GOI was led by the United Front government.
The industry minister at that time, Mr. Murasoli Maran even started scouting for a
new partner to replace SMC. The issue was finally resolved in June 1998 when BJP
led government took over at the center. A compromise was worked out between the
two partners wherein it was decided that Bhaskarudu would retire on 31st December
1999 instead of the earlier scheduled time of 2002. Jagdish Khattar, executive director
was made the Joint Managing Director and was scheduled to take over as managing
director from Bhaskarudu in January 2000.
In December '98, MUL slashed the prices of its 800cc and Zen cars by about Rs24,
000 and Rs51, 000 respectively. This has helped MUL to restrict the slide in its
market share, due to entry of new car manufacturers. As a process of its
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disinvestments in PSU, the GOI is seriously considering disinvesting its holding

MUL, in the domestic market. But there have been no announcements regarding this
from the company.
Jagdish Khattar would have made an excellent poker player -- the managing director
of Maruti Udyog rarely lets any emotion show on his countenance. These days
though, aggression is clearly written on his face. He needs that aggression. Khattar got
an unenviable task on his hands.
When Khattar had taken charge at Maruti in August last year, he had pinpointed the
reason behind Maruti's rapidly dropping market share. Maruti depended just too
heavily on a single product -- the Maruti 800 (with the Omni, which was built on the
same 800 platform), which accounted for 75% of the unit sales of the carmaker as late
as 1997-98. Since the Maruti 800 (with the Omni) also accounted for 62% of the car
sales in the country, focusing on it seemed to make sense.
Only, by 1999, even as Khattar took over, the profile of the car market had begun
changing radically. The entry level, sub-Rs 2.5 lakh Maruti 800 segment was no
longer the biggest chunk of the market. Easy access to car finance and the entry of
rivals like the Daewoo Matiz, the Hyundai Santro, the Telco Indica and the Fiat Uno
in the Rs 3 lakh to Rs 4 lakh segment had turned that into the hottest portion of the
market, accounting for a whopping 40% plus, of the total car market in terms of unit
sales. While Maruti's Zen remained the leader in its price band, it had less than 50%
share of its segment. What's more, because the basic Maruti 800 had remained
unchanged for over 15 years, and even the Zen had been in the market for over five
years, the consumer perception was that Maruti was peddling old models. In essence,
the country's biggest carmaker was fast getting the same image that Hindustan
Motors' Ambassador and Premier Automobiles' Padmini had when Maruti first
entered the market.
Maruti has only one new weapon left that it can borrow from parent Suzuki's small
car armory -- the Alto. And the launch of the Alto could bring its own problems -- it
might further erode Maruti 800 share rather than add fresh sales.

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For Khattar, therefore, the pressure is mounting with the disinvestment clock ticking
away. And there seems no easy solution. If he can't get Maruti's market shares to
move up fast, its market value will drop even more. If it cuts prices to shore up market
share, it will be at the expense of profits -- and that will again push down the
carmaker's valuation. The Rs 20,000 price cut in the Maruti 800 alone could mean
almost Rs 376 crore in lost sales realizations over the full year. And his rivals in the
market are watching him closely to see what card he will play next. Watch this space.
December 1983 heralded a revolution in the Indian car industry. Maruti collaborated
with Suzuki of Japan to produce the first affordable car for the average Indian. At this
time, the Indian car market had stagnated at a volume of 30,000 to 40,000 cars for the
decade ending 1983. This was from where Maruti took over.
The sales figure for the year 1993 reached up to 1,96,820. The company reached a
total production of one million vehicles in March 1994 becoming the first Indian
Company to cross this milestone. It crossed the two million mark in 1997.
India's largest automobile company, Maruti entered the Indian car market with the
avowed aim to provide high quality, fuel -efficient, low- cost vehicles. Its cars operate
on Japanese technology, adapted to Indian conditions and Indian car users. Maruti
comes in a variety of models in the 800 segment.
To fend off growing competition, Maruti has recently completed a Rs. 4 billion
expansion project at the current site, which has increased the total production capacity
to over 3,20,000 vehicles per annum. It has further plans to modernize the existing
facilities and to expand its capacity by 1,00,000 units in the year 1998-99. The total
production of the company will exceed 4,00,000 vehicles per year.

In the small car segment it produces the Maruti 800 and the Zen.

The big car segment includes the Maruti Esteem and the Maruti 1000.

It also manufactures the Maruti Omni.

The latest addition to the Maruti able is the Classic, billed as the car that will lead
the way to the next millennium. Other models on their way include the Wagon R
and the Baleno.

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Achievements
The saga of this company has been an odyssey of opportunity, challenge, growth,
social levelling, mobility and the visible excitement it brought to an entire nation.
Though over 25 manufacturers offer nearly 80 models to Indian car buyers, Maruti
Suzuki continues to retain its leadership. With perceivable benefits of quality,
reliability, technology, performance, trustworthiness and service, it dominates the
largest market segment affordable, valuepacked, fuel-efficient cars and is scoring
significant successes in fast-growing upper segments as well. Maruti Suzuki also has
fully operational, Indias largest service network, spanning over 1200 towns and
cities. Maruti Suzukis greatest achievement has been the special niche it has carved
for itself with customers.
Awards and Achievements

Year 2009-10 "Platinum Dealer", Prestigious award for the best overall
performance which was won by us.Only 40 dealers were honoured with this
band among 800+ dealership outlets across India.

Back to back Awards from Maruti Suzuki India Ltd

Mr.Dinesh N C has won the Maruti Suzuki Emeging Star, Contest held in
Bangalore on 21st September 2010.

Mr.Hemanth Kumar H N has been 1st Runner up in Maruti Suzuki Sales

Captain Contest held in Bangalore on 22nd September 2010.

Ms. Divya Nayak has been awarded 3rd Place in Maruti Suzuki True Value
Selling Skill Contest held on 27th Sepember 2010.

Service: Award for lowest ICR(Insurance Claims Ratio) in the country

Service: Award for Best Customer Relationship Building activities.

Particulars

Year

Platinum Dealer Award

2009 - 2010

Winner of "Best Customer Relations Building Activity"

2009

Lowest "Insurance Claim Ratio Value"

2009

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COMPANYS MISSION & VISION

1) Companys Portfolio:
Maruti Udyog Limited (MUL),INDIAs finest and Asias largest automobile industry
was established in 1981 by an act of parliament.MUL, the first automobile company
in the world to be honored with an ISO 9000:2000 certificate, is a subsidiary of
Suzuki Motor Corp (holds a 54% equity stake). The Government of India remains a
significant equity stakeholder (10%).With its early mover advantage in Indian market;
Maruti retains a dominant Market share despite increasing competition.
2) Business Portfolio:
The Group's principal activity is to manufacture, purchase and sale of Motor Vehicles
and Spare parts. The other activities of the Group comprises of facilitation of PreOwned Car Sales, Fleet Management and Car Financing. The Group also provides
services like framing of customized car policies, economical leasing of cars,
maintenance management, registration and insurance management, emergency
assistance and accident management. The product range includes ten basic models
with more than 50 variants. The Group has operations in over 100 cities with more
than 150 outlets and also exports cars to other countries.
Vision:
Visions of any company are those values on which company works. As the MUL is
started by Governmental initiatives it tends to be more consumer oriented and hence
cost effective, but on the other hand Suzukis participation ensures not only need of
the profit, but of the need of maximum profit. The only way for this Noras dilemma
of selecting principals for companys working vision ,was to maximize profit and
reducing cost by maximizing output and sales Hence MUL declared its Vision asThe Leader in the Indian Automobile Industry, Creating Customer Delight1 and
Shareholder's Wealth2; eventually become a pride of India
Customer Delight1 is making sure that performance, after sales service and customer
support are best and beyond expectation. Shareholders wealth2 is the prime concern
for running business smoothly.MUL knows this and understands customer is king,
he can change the fortune of any company, hence goes companys brand line:
COUNT ON US!

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Mission:
Mission is the statement of an organizations purpose, what it want to accomplish in
the larger environment and its goals which are specific, realistic and motivating.
Missions are described over visions and visions demand certain objectives. The main
objectives/Missions of MUL are:

Modernization of the Indian Automobile Industry.

Developing cars faster and selling them for less.

Production of fuel-efficient vehicles to conserve scarce resources.

Production of large number of motor vehicles which was necessary for

economic growth.

Market Penetration, Market Development Similarly Product Development and

Diversification.

Partner relationship management, Value chain, Value delivery network.

1.2.4: Products of the Company

A-STAR

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Maruti Suzuki's compact A-Star, which will be launched in October, is expected to

surpass the earlier strict emission norms announced by the company.
Emission from the A-Star not only complies with the Euro 3 (Bharat-3) norms that are
operational in 13 Indian cities, including Delhi, but also geared to meet stringent
emission norms that will be implemented across Europe in the coming years.
The A-Stars CO2 emission will be even lower than 109 gm/km which we had
envisaged earlier. This is much lower than the European emission norms that require
cars to emit 120 gm/km in the future said Shinzo Nakanishi, MD, Maruti Suzuki.
India's Euro 3 norms is 5 years behind those currently enforced in Europe, while Euro
4 norms that are enforced outside the 13 Indian cities are 10 years behind European
benchmarks. While gaseous and particulate matter comprise Euro 4 gradation in India,
Europe's emission reports estimate the CO2 discharge levels only. Lower CO2 levels
in cars means the car has superior fuel efficiency, said Anomita Chowdhury, Associate
Director, Centre for Science and Environment.
Maruti Suzuki's decision to manufacture the A-Star car in India is part of parent
Suzuki's overall strategy to make India the manufacturing hub for the production of
small cars like the Alto, Swift, and Maruti 800. We may consider manufacturing the A
Star later in China which will cater to the Chinese market only. In that case we may
have to export auto components from India to China, said Nakanishi. The firm hopes
to export about one lakh units of the A-Star to Europe. In about 2-3 years from the
launch, we may export to S America and the SE Asian region, he said. As part of its
strategy to consolidate its position in the A2 segment, which will witness newer
players

like

Nissan,

Toyota, and Honda this

year onwards, Maruti
Suzuki has indicated it
will

launch

the

compact Splash next

year.
SWIFT DZIRE
Performance
24

The Esteems replacement is a Swift with a boot. Its available with the same engines
as its hatchback cousin which is the 1.3 litre petrol unit from the Esteem and the
fabulous DDIS multijet diesel motor from the Swift Diesel. Weight penalty over the
Swift is only around 30kgs, so performance levels are similar to the hatchback. The
petrol has all the action towards the top-end of the powerband and may feel a little
lethargic when fully loaded. The diesel however, is the one that makes the most of the
torque available. A slight hint of lag below 2000rpm, but after that the motor comes
into its own and picks up the pace considerably. The gearbox is again carried over
from the Swift, so it comes with a sweet shifting action with short and direct throws.
Ride & Handling
The rear suspension has been stiffened due to the added weight of the boot and the
Swift already had a slightly bumpy rear seat ride, this remains in the Dzire as well.
This means on rough patches, you will have to slow down unlike in the Logan which
you can drive without a care over bad roads. But the stiff settings pay dividends in
handling. You can push the car through corners, there is minimal body roll and the
EPS steering also feels precise that weighs up with speed.
Refinement
The engines both diesel and petrol are refined powerplants and you will not find any
reason to complain. The interiors look good and are made of good materials, but as in
the Swift, they may start to rattle fairly early in the cars life. The suspension doesnt
make its presence known even on rough patches.
SX 4

25

It is expected to be launched in Indian market in three months.The new Maruti SX4

sedan is expected to be built at Maruti's new manufacturing facility at Manesar.It will
be offered in the A3 segment, which currently accounts for 15 % of the Indian
passenger car market. Exepcted preice range is 6 lacs to 7 lacs .
Suzuki, a world leader in the compact cars achieved an image makeover with the
launch of Swift.Apart from India, Swift received the Car of the year award across the
world. The unveiling of the SX4 sedan at Geneva is Suzuki's effort to make its
presence felt in the premium sedan segment in front of a global audience.
ZEN ESTILO
Zen Estilo has the same engine
(1061cc, 64.8ps, 84Nm, 4-cylinder,

16-

valve, MPFI F10D Petrol) under

the

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.
VITARO

26

Grand Vitara is well equipped with its various safety and comfort features. With its
2.7 litre DOHC V6 engine capacity and with the low-end torque of 127 kw @ 6000
rpm, it can effortlessly run from muddy, dusty terrain to any normal highway. Its
safety features include rear door child safety locks, standard four-wheel ABS, power
assisted rack pinion steering system, high-tensile steel in a A, B, and C pillars, high
impact door beams, front and rear crumple zones etc.
Its comfort features include better space and three rows of seating arrangement.
It comes in different colors:

Cool Beige Metallic

Bluish Black Metallic

Grove Green Pearl Metallic

Pearl White

Cassis Red Pearl

MARUTI 800

Dimensions
Length
Width
Heigth
Wheelbase
Ground clearance
Min. turning radius
Weight
Unladen (std.)

3335 mm
1440 mm
1405 mm
2175 mm
170 mm
4.4 m
640 Kg
27

Transmission

Manual 4/5* forward,

all synchromesh 1 reverse

Engine
Type
Number of cylinders
Tyres
Std.
EX & DX

4 stroke cycle, water cooled

SOHC 1 C2 V/iC4V*
3
5.65-12-4 PR
Radials 145/70-R-12

OMNI
Specification

Length
Width
Height
Wheel base
Ground clearance
Min. turning radius
Kerb weight
Transmission

3370 mm
1410 mm
1640 mm/ 1835 mm*
1840 mm
165 mm
4.1 m
740 Kg/ 755 Kg*
Manual, 4 forward, all synchromesh
1 reverse

Engine
Type
Number of cylinders
Swept Volume
Maximum power
Maximum torque
Suspensions
Front
Rear
Brakes
Front
Rear
Tyres
Capacity
Fuel tank
Seating

4 stroke cycle water cooled

3
796cc
37.0 bhp@5000 rpm.
5.8 Kgm@2500 rpm
McPherson Strut
Leaf spring with shock absorbers
Drum
Drum
4.50-12-6PR ULT
36 Lts
5 / 8 seater options available

28

ZEN

Dimensions
Length
Width
Height
Wheelbase
Ground clearance
Min. turning radius
Engine
Type
No. of cylinders
Diesel / Non-MPFI
Fuel delivery Diesel
Transmission
Manual type
Automatic type
Transmission
Manual type
Automatic type
Suspension
Front
Brakes-booster assisted
Front
Rear

3495 mm
1495 mm
1405 mm
2335 mm
165 mm
4.9 m
Aluminum,

Water

SOHC/TUD5, IDI**
4, in-line
2 valves per cylinder
Rotary distributor type
5 forward, 1 reverse
3 speed with planetary geat*
5 forward, 1 reverse
3 speed with planetary gear*
McPherson Strut
Disc
Drum

ALTO

29

Cooled,

Specification
Length
Width
Height
Wheel base
Min. turning radius
Engine
Type

3495 mm
1495 mm
1460 mm
2360 mm
4.6 m
FC, 4 valves per cylinder,

Control
Number of cylinders
Piston displacement
Front

MPFI
16- bit Computer
3/ 4*
796cc/1061 cc*
Macpherson Strut with torsion type anti-

Rear

roll bar.
Coil spring with double action telescopic
shock absorbers.

Brakes - booster assisted

Front
Rear
Tyres
Capacity
Fuel tank

Disc
Drum
35 Lts

Wagon R

30

Specification
Length
Width
Height
Wheel base
Ground clearance
Min. turning radius
Kerb weight
Gross weight

3495 mm
1495 mm
1660 mm
2360 mm
165 mm
4.6 m
825 Kg/ 840 Kg
1225 Kg for LX, Lxi, Vxi,
1240 Kg of Ax

Transmission
Manual type

5 forward all syncromesh,

1 reverse gear
3 speed with planetary gear*

Automatic type
Engine
Number of cylinders

4 in-line, FC engine/
4 valves per cylinder.
1061 cc
62 bhp @ 6000 rpm
8.4 Kgm @ 3500 rpm

Swept volume
Maximum power
Maximum torque
Suspension
Front

McPherson Strut with torsion type roll

control device
Coil spring and gas filled shock absorbers

Rear

with three link rigid axle and isolated

trailing arms
31

Brakes - booster assisted

Front
Rear
Tyres
Capacity
Fuel tank

Disc
Drum
145/70 R13 (Radial)
35 Lts

BALENO

Dimensions
Length
Width
Height
Wheelbase
Min. turning radius
Weight
Kerb weight
Transmission

4225 mm/ 4375 mm*

1690 mm
1390 mm / 1460 mm*
2480 mm
4.9 m
975 Kg/1020 Kg*
Manual 5 forward,

Engine
Type

All Aluminum
Contemporary, 16 valve SOHC
4 in-line, 16
132 NM@3000 rpm
MPFI

Number of cylinders / valves

Maximum torque
Fuel Distribution
Brakes - Vaccum assisted hydraulic
Front
Rear
Tyres
Fuel tank

Ventilated disc
Drum, leading / trailing
165/80R-13
51 Lts.

32

SALES FIGURES
Maruti Suzuki sales in September 2009 New Delhi, October 01, 2009 The company
had sold a total of 71,000 vehicles in September 2008.
The sales figures for September 2009 are given below:
In September
Segment Models

2009 2008

Till September

2009-

Change 10

2008-

09

Change

April'08 March'09

A1

M800

3207 3467 -7.5%

15856 28786 -44.9% 49383

Omni, Versa

8297 7416 11.9%

44433 40970 8.5%

77948

52508 45621 15.1%

299829 243510 23.1%

511396

7356 7413 -0.8%

44225 34789 27.1%

75928

Alto, WagonA2

R, Zen, Swift,
A-star, Ritz

A3

SX4, D'zire

Total Passenger Cars

MUV

71368 63917 11.7% 404343 348055 16.2% 714655

Gypsy, Vitara 226

765

-70.5% 2155

3744

-42.4% 7489

Domestic

71594 64682 10.7% 406498 351799 15.5% 722144

Export

11712 6318 85.4%

Total Sales

83306 71000 17.3% 472917 382035 23.8% 792167

66419 30236 119.7% 70023

* A-star launched in November08, Ritz launched in May09, Grand Vitara 2.4

launched in July09.

33

1.2.5 Organization Structure

Maruti Suzuki India Limited (MSIL, formerly Maruti Udyog Limited), a subsidiary of
Suzuki Motor Corporation of Japan, is Indias largest passenger car company,
accounting for over 50 per cent of the domestic car market.
Maruti offer full range of cars- from entry level Maruti 800 & Alto to stylish
hatchback Ritz, A star, Swift, Wagon R, Estillo and sedans DZire, SX4 and Sports
Utility vehicle Grand Vitara.
Major corporate events (Milestone)
Year Events
1982

Tripartite agreement with the Indian government, Maruti and Suzuki Motor

1983
1998
2000
2003

Corporation for the production of small passenger cars

First cars roll out
Maruti holds over 70% of the Indian passenger car market
Launches Alto, designed specially for Indian roads
Suzuki Metal Indias foundry, a JV between Suzuki Motor Corporation of

34

2005

Japan and Maruti Udyog Ltd, comes on stream

Maruti Suzuki Automobiles India established in collaboration with Suzuki
Motor Corporation to build a new manufacturing plant with a total investment
of Rs15bn

1.3 Introduction to the Topic/Title/Problem Studied

Problems of the organization
The automobile industry occupies a prominent place of the Indian economy; the
automotive industry has a strong multiplier effect and is capable of being the driver of
economic growth. Indias biggest car maker Maruti Udyog Limited enjoyed a near
monopoly status, until the government liberalized the economy in 1991, this led to the
entry of foreign players like Hyundai, Fiat, Mitsubishi and Toyota. The research area
product related strategies examines the market related strategies adopted by Maruti
Udyog Limited in response to the intensive competition, for instance the company
introduced the hatchback SWIFT to shed its image of being a manufacturer of lowcost staid cars.
COMPETITION INFORMATION

Small cars
Premium cars
Luxury cars
Sport utility vehicles
Segments
Cars/ SUVs

Companies
Suzuki
Honda
Toyota
Mitsubishi
GM
Ford

Daimler-Chrysler
Skoda
Fiat
Hyundai
Tata
M&M

35

Motor cycles
Scooters
Scooterettes/Mopeds
Segments

Companies

Two-wheelers

TVS

Yamaha

Hero Honda

Kinetic

Bajaj Auto

LML

Buses
Trucks
Tractors
Ambulance
Defence vehicles
Construction equipments
Segment
CVs

Tractors

Companies
Tata

Swaraj Mazda

Ashok Leyland

Mahindra & Mahindra

Tatra

Volvo

Eicher-Mitsubishi
Escorts

New Holland

M&M

ITL-Renault

L&T

John-Deere

Punjab Tractors

Steyr

36

Hyundai

Established : 1996
Collaborators: Hyundai Corporation, South Korea
Product range: Hyundai Santro, Accent, Sonata, Terracan.
Unlike most other MNCs, Hyundai of South Korea decided to enter India with its
small car model, Santro, which it priced attractively at about $7000. Hyundai chose
to set up a fully owned subsidiary and hired some of the most reputed executives in
the Indian automotive industry. Hyundai also invested heavily in a modern car plant
near the city of Madras, in the southern part of India. The facility can manufacture
130,000 engines, transmission sets and components per annum. According to
Business India1, What makes HMIs (Hyundai Motor India) progress even more
impressive is that the Sriperambadur plant is not another knocked down (KD)
operation but an integrated manufacturing facility. The Santros that will roll out of
this plant will be manufactured from day one and not merely assembled. This is a
historic achievement. No company has begun operations in this manner, not even
Maruti Udyog, which initially imported CKD kits for the Maruti 800... The very
essence of Hyundais strategy is to localize heavily from day one to give it a very
early cost advantage, the number one priority in this highly price sensitive market.
The Santro has been a major success. Though not very elegant looking, the car has
enough leg and head room. Hyundai sold more than 75,000 vehicles during the period
April 1999 - March 2000 and looks set to cross the 100,000 figure in the current year.
During the period January-June, 2000, Hyundai sold 45,513 units, against 21,884 in
1999. Encouraged by the success of the Santro, Hyundai has recently launched the
upmarket Accent model. Recently, Hyundai exported a big consignment of 760 cars
(350 units of Santro and 410 of Accent) to Algeria. Hyundai has also announced

37

plans to export engine and transmission sets to the parent company in Korea and to
Turkey.

38

TATA Motors
Established: 1954
Collaborators:
Tata Group, India
International Automotive Design, UK
Robert Bosch GmBH, Germany
I.DE.A, Italy
Le Moteur Moderne, France
Product range: Tata Sierra, Estate, Sumo, Indica, Indigo.
Founded in 1945, the Tata Engineering and Locomotive Company (Telco) is one of
the leading players in the Indian automobile industry.

In its early years, Telco

manufactured only commercial vehicles, through a technical collaboration with

Mercedes Benz of Germany. Starting with the 1980s, Telco has moved into light
commercial vehicles, pick-up trucks, multi-utility vehicles, large cars and finally,
small cars. The Tata Mobile pick-up truck launched in 1988 was probably a turning
point in Telcos history. The model failed to build volumes, but gave Telco engineers
confidence in their design capabilities. Telco then launched its big cars, Tata Sierra
(1991) and Tata Estate (1992). Both these cars have been more or less phased out, as
Telco decided to take a plunge into the mass market small car segment.
FIAT (Controlled By TATA Motors.)
Established: 1997:
Collaborators: FIAT Group, Italy Premier Automobiles Ltd, India
Product range: Fiat Uno, Sienna, Sienna Weekend, Palio
The Italian car maker has maintained a presence in India since the
1950s through its tie up with the Walchands, a leading Indian business group. In the
recent past, Fiat has wrested management control from the local business group and
decided to play a more active role.
Fiat has been one of the few MNCs to launch quite early on, a reasonably priced small
car, the Uno. The model has a 999cc engine and is currently priced at about Rs. 3
lakhs. Though it is an old model, having been launched in 1983 in Europe, and lacks
the sophistication and finesse of competing models, it has the potential to build
39

volumes. Unfortunately, Fiat encountered production problems during the launch

phase. Fiat has recently launched a more upmarket model, the Sienna, priced higher
than the Maruti Swift Dzire. The Sienna has been positioned as the booted version of
Fiat's best selling, Palio model. Analysts expect Fiat to also launch the Palio, which
will compete against the Santro, Zen Estilo and Indica.
FORD
Established : 1996
Collaborators:
Ford Motor Co., USA
Product range: Ford Escort, Ikon, Mondeo.
Ford entered India through a 50-50 joint venture with the local Mahindra & Mahindra
group. Now the Indian unit has become a wholly owned subsidiary of Ford. The
entry model, which Ford chose was Escort, priced in the range Rs. 7 - 8 lakhs. While
it established Ford's reputation for quality, volumes failed to pick up because of the
high price. Fords head of Indian operations admitted in an interview1 , Our Escort
which in most markets is a family car is an ultra luxury car in India. So, we have to
change our mindset.
As of now, it looks unlikely that Ford will enter into a head to head clash with other
players in the small car segment. Ford Motor India feels, with the way it has built the
brand in India and created a new segment through Ikon, Ford does not need to go into
the lower end of the market.
TOYOTA
Established: 1937
Collaborators: Toyota Motor Corporation
Product range: Toyota Qualis, Corolla and Camry.
Toyota, Japan's largest car manufacturer and one of the top three automobile
companies in the world, has launched Qualis, a version of its Kijang, an 8 -10 seater
multi utility vehicle. The company is currently importing critical components such as
the gearbox. Priced at about $15 18,000, Toyota has set only modest sales targets to

40

start with. It plans to sell 22,000 vehicles in the first year of operations. By the fourth
year, volumes are expected to grow to 50,000.
Toyota officials explain that it makes sense to gain experience and understand the
Indian market before launching a conventional passenger car. Toyota also argues that
a shakeout is likely in the Indian market and that it would prefer to wait for the
process to be completed before making heavy investments. Toyota executives point
out that in both Indonesia and Thailand, it had made strategic late entries but by 1998
99 had emerged as the market leader.
GENERAL MOTORS
Established: 1996
Collaborators: General Motors Corp. USA Hindustan Motors
(C.K. Birla Group), India
Product range: Opel Astra, Corsa, Corsa Swing and Optra
The world's largest car maker entered India through a 50:50 joint venture with the
local CK Birla group of companies. This group manages Hindustan Motors, one of
India's oldest car companies. Set up in 1994, with a total investment of about $100
million, GMs operations are based in the western Indian state of Gujarat.
GMs entry model was the Astra, designed by its German subsidiary, Opel. The Astra
has been positioned as a luxurious, elegant, safe, premium offering which reflects the
excellence of German engineering. Owing to its high price range of Rs. 7 - 10 lakhs,
the Astra has, not surprisingly, failed to build volumes. During 1999-2000, GM could
sell only 3047 cars. GM has recently launched another model, the Corsa, priced
between Rs. 5 and 7 lakhs.

GM has positioned it as a vehicle for the

'uncompromising buyers,' who are prepared to pay more.

HONDA SIEL
Established: 1997 Collaborators:
Honda Motor Company, Japan SIEL Group, India
Product range: Honda City, Accord.
Honda, which has a tremendous reputation for quality and customer satisfaction,
entered India with its City model, positioned as a low cost car for Asia. The City has
41

powerful engines and delivers good performance. Honda sources kits from Thailand
for assembly in India. Though it has cut costs by providing a functional, no frills
interior, the car remains priced beyond the reach of most Indian customers. It sells
only about 1000 units per month and is unlikely to sell in large numbers, given its
current price structure of Rs. 6 - 9 lakhs. Meanwhile, Honda has announced plans to
launch one of its most popular models in the world, the Accord.
SKODA AUTO INDIA PRIVATE LIMITED
Established: 1989
Collaborators: VW, Audi and SEAT
Product range: Octavia
Another cautious entrant into the Indian car market is Volkswagen through its
subsidiary, Skoda, which has invested in a plant with a capacity of 10,000 cars. The
company has indicated that it will not increase this capacity for the next five years. In
its first full year of operations, Skoda expects to sell 6000 vehicles. This is projected
to increase to 10,000 by the third year. Skoda will also depend heavily on imports of
key components. Skoda officials explain that the project will be implemented in a
slow start fast growth fashion.
Yet another player, Mitsubishi, has confined itself to the upper end of the market. Its
products like the Lancer and Pajero are premium vehicles which are unlikely to sell in
large numbers in the near future.
CONCEPTUAL DISCUSSION
MARKETING STRATEGY OF MARUTI SUZUKI (PVT) LIMITED
The marketing strategy of the Maruti Suzuki Pvt. Ltd. can be measured from the
following story:
Efficient Production and Distribution Capabilities: Just three months after it
launched Swift, Maruti Udyog Limited has already sold over 8,000 units of the car
and added another 5,000 next month. There's a four-month waiting period for the
1,298-cc hatchback -- the company claims more than 9,000 bookings before the car
was launched. And that's even while competitors -- Corsa Sail, Hyundai Getz and Fiat
42

Palio -- are available off the shelf. Not surprisingly, MUL now has a lot riding on the
car: there's over Rs 440 crore (Rs 4.40 billion) invested in the project (Rs 250 croreodd is MUL's share). Not only is the company hoping that the Swift will help expand
the market for the B-plus segment (premium hatchbacks), it's also counting on Swift
to make a style statement -- that Suzuki can deliver good-looking cars on Indian
roads. For a company that has been known more for its value-for-money proposition
-- from the 800 to the Esteem -- that's important. "It's not as if our cars weren't style
statements. It's just that with Swift, we have made a break from the past," reveals a
company official.
The buzz around Swift began in December 2004 -- five months before its launch. All
new WagonRs and Maruti Omnis came with stickers and sunshields that proclaimed
"My next car is a Swift." Unlike most car launches, where the look of the vehicle is
kept under wraps until the last possible moment, photos and specs were made
available at showrooms several months earlier. Models of the car were placed on high
platforms at busy intersections in Delhi; while cars were on display in malls. "It works
well for those who don't have the inclination to really go to a dealer and check out the
car," says a company official. The launch was staggered over three to four days in 15
cities across the country, coinciding with the worldwide launch of the car. MUL also
made good use of its Rs 20 crore (Rs 200 million) marketing budget. For the first
time, it opted for an in-film placement -- Swift appeared in the Bollywood hit Bunty
Aur Babli, which was released on the same day as the car launch, May 27. And it
trained 1,000 salespeople -- called "energisers" -- to exclusively sell the Swift.
Perhaps the Swift's biggest plus is its price. Introduced at Rs 387,000 for the base
model, it was close to about Rs 50,000 less than its competitors. Even the top-end
version was Rs 70,000 cheaper than the Hyundai Getz GLS. MUL does not want to
give this pricing advantage away. Although it hiked prices by Rs 10,000 in early June,
advance bookings were honoured at the introductory price. And since the car is priced
at just under Rs 400,000, Delhi residents pay only 2 per cent road tax, compared to 4
per cent for a car that costs more than Rs 400,000.
Suzuki Motor Corporation's expansion plans, which set the Japanese company on a
collision course with the government, could turn out to be a big push for the
automobile components industry. The 250,000 cars per annum assembly unit
43

announced by Suzuki could result in an investment of up to Rs 7,500 crore (Rs 75

billion) by the components industry. The entire sourcing for the venture is proposed to
be done locally. Though Maruti Udyog, which will own 70 per cent of the venture, is
yet to announce its investment in the project, the automobile components industry
expects it to be around Rs 2,500 crore (Rs 25 billion). As every rupee spent in a car
project needs to be backed by a downstream investment of Rs 3 in components,
vendors say the industry could see an investment of Rs 7,500 crore. "We are very
bullish on this development, though we are yet to do our calculations on what the
Suzuki Motor investment means to us exactly," Surinder Kapur, chairman of the Sona
Group, one of the largest vendors of Maruti Udyog, told Business Standard. Any new
demand can be met only by adding fresh capacity. "The automobile components
industry has to make substantial investments in increasing capacity to meet the
additional demand," said Dilip Chenoy, director-general, Society of Indian
Automobile Manufacturers. McKinsey & Co had in a recent study said the Indian
automobile component industry had the potential to become a $33-40 billion industry
by 2015. Suzuki's expansion plans could turn out to be a big push in that direction.
Having successfully completed the supply of fuel neck and real axle for Maruti
Udyog Ltd (MUL) vehicles during last fiscal, Jay Bharat Maruti Ltd (JBML), the Rs
422-crore manufacturer of components for automotive applications, is now working
on another expansion programme. The company is also planning to set up a coating
facility and additional welding lines. Further, it has also decided to expand its existing
capacity to meet the increased demand of MUL. "At present, the company is working
on a major expansion plan for new model of Maruti YN4 and will be setting up
facilities for manufacturing of the rear axle in technical collaboration with Yorozu
Corporation, Japan," a JBML official told the researcher. However, declining to
divulge the details on investments involved in the expansion project and the
implementation schedule, he said, "the details for the finalisation of technical
collaboration and expansion project are still being worked out in constant
consultations with Maruti Udyog. We will announce them as and when they were
finalised." The official said that Maruti Udyog has recorded first ever sales of
4,72,122 vehicles in its 20 years of operations with 30 per cent growth over the
previous year. "Our performance is mainly attributable to performance of MUL, our
main customer. During last fiscal, we have recorded an increase of 35.39 per cent in
44

sales over the previous year." Stating that the company has already started commercial
supplies of fuel neck to MUL during last fiscal, the JBML official said the test trials
have been conducted for rear axle and the commercial supplies would start during the
first half of current fiscal. Expressing concern over the unprecedented hike in steel
prices, the official said the steel prices during last fiscal increased by almost 40 per
cent. According to him, reduction in import duty on components, strengthening of
rupee against dollar, thus making import cheaper, and signing of free trade agreement
with other countries would further add to the concerns.
The unit sales of the company during 2005-06 grew faster than the rest of the
domestic car industry, and was the highest ever in Marutis history. Gross Sales
Revenue grew by 11 per cent over the previous year. Net Profit increased by 39 per
cent compared to 2004-05. The ratio of Net Profit to Net Sales was 9.9 per cent
compared to 7.8 per cent in 2004-05. During the year, work on the companys new
ventures proceeded as per plan.
Latest Faculities
This state-of-the-art facility, located in Manesar in Haryana, begins with an initial
capacity of 100,000 units per year. This will be over and above the capability of over
600,000 units a year in our existing facility in Gurgaon, Haryana. The new car plant at
Manesar, together with Suzuki Motor Corporations new plant in Sagara, Japan, has
been designed to meet the Suzuki groups global aspirations in the future. As such, the
Manesar plant comes equipped with many sophisticated systems and processes to
ensure high quality and productivity on the shop floor.
The company is also committed to upgrading facilities at the existing plant in
Gurgaon. The total investment by Maruti and Suzuki in the new car plant, the diesel
engine and transmission facility, upgradation of the existing plant and in launching
new models will be close to Rs 6000 crore. The other major venture the diesel
engine plant --- is also on course to begin operations in this calendar year. The plant
will manufacture state-of-the-art, 1.3 litre diesel engines for cars. It will start with an
initial capacity of 100,000 diesel engines per year. This will enable Marutis entry into
the significant diesel car segment of the domestic passenger car market. These new
facilities will strengthen the companys leadership position in the domestic passenger
45

car market. At the same time, they symbolize Suzuki Motor Corporations continued
commitment to India.
Impressive Global Hold
The company will launch a new export model during 2008-09. This compact car
model, while serving the Indian market, would be for export mainly to Europe. The
company will target to export 100,000 units of this model annually. A few months
ago, Suzuki Motor Corporation and Nissan Motor Company decided to widen the
scope of their global strategic alliance. As a first step, they agreed to collaborate in
manufacturing by utilizing the facilities of the company. In the new scenario, India
and Maruti have acquired a very important role in this alliance. The increased scale of
operations on account of the Nissan contract is likely to further improve cost and
quality competitiveness at the Maruti facilities, which in turn will benefit customers in
the domestic market. The company shares the Government of Indias vision of
making India a global hub for compact cars. With Maruti emerging as a contract
manufacturer for Nissan, India takes one step forward in realizing that vision.
Most Efficient Research and Development
While Suzuki and Maruti remain committed to excellence in manufacturing, both
companies are also increasing collaboration in R & D. Suzuki Motor Corporation sees
a major role for Maruti in the area of R & D for cars in Asia. Building on the success
of the Swift experience, where Maruti engineers trained in Japan worked closely with
their Suzuki counterparts to design and develop a new model, the effort will be
empower Maruti to independently develop cars to suit preferences of Indian
customers. The focus will be on tapping the vast talent pool available in India and
develop people through extended training at Suzuki Motor Corporation, Japan. This,
combined with augmentation of R & D facilities, will help Maruti acquire a
preeminent position in Suzukis global R & D set-up.
Marutis Strategy to Come Up With New Models & Surprise Marketers
The company is aiming at sales of one million cars per year in 2010. Investment in
new facilities and in R & D, as outlined above, are both part of the strategy to achieve
the ambitious sales goal. In addition, the company will launch a series of new models
to be able to attain the one million sale target. It plans to launch five new models in
46

the next five years to meet the needs of Indian customers. This will be over and above
face-lifts of any existing models and launch of new variants. To sell one million cars
in a year, the company will have to expand the network of sales outlets as well as
service workshops across the country. This process, which gathered pace in recent
years, is likely to accelerate in the next few years. Besides increasing the number of
outlets, the company will also revamp the quality of infrastructure and service at these
outlets.
Grabbing Compact Car Opportunity
The company believes that the low penetration rate of cars in India and the relatively
lower percentage of first time buyers present a tremendous opportunity for growth.
Therefore, the companys optimism stems from positive macro economic factors,
including significant GDP growth, bias towards lower taxes,

a young population,

focus on roads and rural infrastructure and growing consumerist aspirations. Like
China before it, the Indian car market may be on the threshold of explosive growth.
This growth is likely to be driven by the entry-level segment. Over 25 million Indians
have bought two wheelers in the past five years, and will boost demand once they
upgrade to four wheels. The company, with a range of models in the entry level and
compact segments, is best placed to tap this opportunity. Suzuki Motor Corporation
has been the leader of the minicar market in Japan for over three decades. It has the
right technology and the right products to tap the compact car opportunity in India.
The expansion of their sales and service network, innovative and focused marketing
initiatives, aggressive cost reduction and productivity improvement programmes, their
tie-ups with regional finance companies and banks to expand the reach of organised
finance, are all efforts to reach out to entry level customers.
Showed Great Social Responsibility
The company is conscious of its responsibility as a corporate citizen. During the year,
the company has expanded the number and reach of Maruti Driving Schools across
the country. Equipped with driving simulators and specially trained instructors, these
schools provide a comprehensive theory-cum-practical curriculum modeled on the
best international driving schools. They have been very well received, especially
among women learners.
47

The recent decision of Suzuki to set up a separate joint venture for the manufacture of
diesel engines and a new plant had raised concerns that MUL may not be able to
benefit substantially from any future expansion plans. However, government
intervention before the crucial board meeting to decide on the joint venture assured
MUL a substantial 70% stake in the joint venture for the new vehicle manufacturing
plant. MUL has been enjoying good growth in sales this fiscal with overall sales in the
Apr-Oct period growing by 20.6% YoY to 302871. Going forward too, we expect
MUL to enjoy good sales growth given its wide distribution network, high customer
recall and attractive pricing. We maintain our Out Performer rating on the stock with a
target of Rs444.

Maruti Udyog Limited has led Indias car market for more than a quarter of a century.
First established in 1981, the company is now a fully-fledged subsidiary of the Suzuki
Motor Corporation. Its principal activities include the manufacture and sale of motor
vehicles and spare parts via a 300-strong dealer network scattered across India. The
year 2002 saw Maruti add finance, leasing, insurance, and pre-owned car businesses
to its portfolio, increasing the scale of its operations and prompting a review of its
processes and systems. Oracle Consulting was engaged to install a number of Oracle
E-Business Suite modules and integrate them with Marutis existing systems. The
eight-month project involved managing up to 50 people, including Maruti staff,
Oracle consultants, and employees of third-party organizations. Oracle also assisted

48

Maruti with change management, a critical part of the process to ensure quick user
acceptance.

Great Management Control

Prior to employing Oracle, Maruti used a number of home-grown systems to manage
its various lines of business. Many of these disparate systems could not talk to each
other, requiring staff to enter data multiple times and consolidate information to
generate management reports. The addition of four new business sectors in 2002
created further pressures, requiring constant monitoring and human intervention to
keep the system operating across the hundreds of locations Maruti serves within India.
To support this growth and improve efficiency, the company decided to revamp its
information technology systems to provide end-to-end visibility into the organization.
We were looking for a flexible, expandable system that was easy to manage, said
Rajesh Uppal, chief general manager, information technology, Maruti Udyog. This
would reduce the complexity of the IT environment and our reliance on certain people
to maintain the systems. And because our business is undergoing a period of rapid
expansion, it was important to have a standard system that could scale easily.
To minimize the impact of the system change on its business, Maruti decided on a
phased migration to Oracle E-Business Suite. As a first step, the company decided to
replace its financial, purchasing, and human resources systems with Oracle
Financials, Oracle Procurement, and a range of Oracle Human Resources
applications. Oracle Consulting was selected to supervise the implementation,
including determining Marutis requirements and developing a project plan, designing
the system, deploying the software, managing the various parties involved, and
providing post-implementation support.
Tight Project Management
As with all Oracle Consulting-led deployments, consultants sat down with Maruti
managers and key business users to scope out their requirements. A steering
committee was set up to guide the implementation and ensure consultants had
recourse to senior executives for advice. The project plan delineated the
responsibilities of each party and incorporated monthly milestones and testing
deadlines. Oracle Consulting ensured a fast, problem-free installation by employing
49

Oracles Business Flow Acceleratorsan implementation approach that leverages

predefined business flow templates to reduce the time and cost associated with
application deployments. A key project challenge was interfacing the Oracle modules
with Marutis legacy systems, including direct item procurement, dispatch systems,
the time card system for attendance, and the Hyperion business intelligence platform.
The integration had to be completed without any impact on the companys business,
which frequently deals in large volumes. For example, Maruti generates more than
2,000 invoices each day and any lengthy interruptions could have disastrous impacts
on cash flow further down the line.
Great Future Plans
After the success of the financials, procurement, and human resources deployment,
Maruti is considering expanding its Oracle footprint. The company is evaluating
Oracle Advanced Supply Chain Management and Oracle Enterprise Asset
Management. We would like to automate supply chain management and integrate
this process with the Oracle ERP system, said Uppal. We are also looking at linking
more systems with Oracle, so we can access real-time information across all our
businesses. I expect Oracle Consulting to play a role in future projects.
A Critical Analysis of Marketing Strategy of Maruti Suzuki
Strategy and timing are the Himalayas of marketing. Everything else is the Catskills.
- Al Ries
Maruti has been successful in capturing the car market because of the excellent
product it has produced. The market research conducted by Maruti Suzuki showed
that Indian cars were overcrowded, with turbans and sarees to be accommodated. The
idea was to create a voluminous compact car. The tall boy model was taken from the
Atoz and it was redesigned to meet Indian conditions. The car also gives high
mileage. The engine delivers adequate torque i.e. the ability to pull loads even at very
low speeds---this proves to be very essential for slow and traffic-heavy Indian
conditions. The most important is the seating, which is, high and gives road
command.
Maruti Suzuki was competing with Maruti Suzuki in the small car segment and it
offered technology that other car makers thought was too advanced for the slow
50

growing Indian market. Maruti has now built up a reputation such that it is the first
preference of anybody who has driven or ridden in it.
The marketing strategy employed by Maruti Suzuki can be studied with insights into
their STP analysis and Marketing Mix.
Pest Analysis
[In order to understand the conditions under which the Maruti products were launched
in the Indian market, its necessary to analyze the factors that influenced its
effectiveness.
Political Conditions

Maruti Suzuki entered India when liberalization was at its peak. As a result,
everyone was very open to the idea of foreign companies collaboration (Maruti
India + Suzuki Japan) setting up base in India.

The government insisted on the Companies using 70% local content in the
manufacture of the cars as they would have generated tremendous revenue for
India. Maruti Suzuki achieved this in a very short time.

A positive EXIM policy also has helped Maruti Suzuki to boost its top line with
Exports of Maruti Suzuki products to other countries.

Economic Conditions

The economic conditions during the launch of Maruti Suzuki were very relaxed
and liberal. Maruti Suzuki was launched when the country had just opened its
doors to liberalization. So there were no strict norms or bylaws that the company
had to adhere by.

The resources available in India were utilized by the multinationals (Suzuki),

which generated considerable revenue for the government.

A booming banking sector and a phenomenal growth in Auto Loans market has
made Maruti Suzuki more affordable.

51

Social Conditions

A rise in Middle class and concept of small nuclear families has propelled a
demand of B-Segment cars. Maruti Suzuki provides an exact choice for this
demand leading to its high growth.

Technological Conditions

Since Maruti Suzuki manufacturers everything from the smallest of screws to the
biggest of machines in its factory it is able to maintain the efficiency of the
machines. Maruti Suzuki therefore manufactures cars under best of conditions
with the best of machinery. As a result, the cars manufactured are of top quality.

STP Segmentation, Targeting, Positioning

Marketing is not an event, but a process . . . It has a beginning, a middle, but never an
end, for it is a process. You improve it, perfect it, change it, even pause it. But you
never stop it completely.
- Jay Conrad Levinson
Segmentation
Segmentation is based upon considerable evidence that a single marketing approach
or formula will not work for all members of the community to be served.
Geographic
The region of interest of Maruti Suzuki is whole India with special focus on Type A
and fast growing Type B cities across India.
Demographic
Age Anybody of age between 20 40 yrs.
Income Anybody with an income of over 4 lakh p.a.
Occupation Millennials employed as professionals, managers and those want to buy
their first car.
Social Class Middle class, Upper middle, Lower Upper and Upper uppers.
Psychographic

52

Personality Dreamers, those who want to achieve big, ambitious, price conscious,
took their first step towards success and value driven.
Behavioral
Benefits Quality, Style, Price (economical)
User status Potential users and first time users
Buyer Readiness Stage Those who are aware, informed, interested and intend to
buy
Targeting
In evaluating the market segments Maruti Suzuki has looked at two factors - The
segments overall attractiveness and the companies resources. As is very clearly seen
Maruti Suzuki has opted for a selective specialization kind of targeting. Maruti Suzuki
has selected a number of segments each objectively attractive and appropriate. There
is minimal synergy among the segments but each is a cash cow. This multi segment
strategy has had the effect of diversifying the firms risk.
Having Bollywood celebrities to endorse its cars paid off for Maruti Suzuki.
Bollywood celebrities like Sunny Deol as a brand ambassador targets two sections of
the society. Firstly, his glamorous and sophisticated image appealed to the elite
effecting their purchase decisions. Secondly, his adorable persona appealed to the
middle class buyers who wanted a good car for the big investment they were making
and for people who were graduating from the second hand car.
The low price tag of Maruti Suzuki initiated a price war among all companies and
forced Tata Indica to pre-pone its launch. The initial low price tag and strengthened by
a solid marketing initiatives in

form of print advertisements provided a solid

foundation for Maruti Suzuki in India which showed in its sales of 17000 units in just
5 months.
Maruti Suzuki has identified its target market based on its pricing strategy. Swift aims
to be the price leader in B-Segment cars. It has always priced its base model lower
than Zen or Indica giving all the features which they give in their higher models. With
a constant change in its positioning strategy, Maruti Suzuki Swift has succeeded in
53

identifying its target market every time and emerging as the fastest selling car in its
own segment. With the invent of Swift, Maruti Suzuki is looking towards entire new
segment of consumers and all set to target it to emerge as the market leader in BSegment cars.
Positioning
Since its inception, Swift has undergone a lot of changes in terms of its positioning.
First it was Swift, then Swift VXI, and then came finally Swift VDI.
When Swift was initially launched it was positioned as The Complete Family Car.
Since Swift was launched in B-Segment, it had Santro and Tata Indica as its biggest
competitors in that segment. The stylish Tall Boy Design of Swift together with its
slogan helped it to position itself as one of the cars to look upon. With a constant
change in its positioning, Maruti Suzuki always tried to keep alive the buzz associated
with Swift.
Maruti Suzuki repositioned Swift as Sunshine Car (smart car for young people)
from earlier complete family car. This was done because the competitors were
coming out with similar products and then Maruti Suzuki started what they call as
Emotional Positioning. This repositioning of Swift also helped it to target the
segment of first time car buyers. Even the print ads at this time were designed in a
way to project Swift as the first car for the fastest growing consumer segment of India
at that time, The Young Professionals, of the service industry that combined with
various loan facilities were too eager to buy their first car. This led to a phenomenonal
growth in its sales and further strengthening its position as a brand in consumer mind.
Thus the repositioning of Swift gave it an edge over its competitors and also to
emerge as a tough rival to Maruti 800 as The First Car.
MARKET SITUATION
Segment A1: After almost 18 years, the 800 is on its last legs. The dies that have been
stamping out the body panels will not be able to do so much longer. But the A1
segment, in which the 800 is the only product and sell 2 lakh units a year. This car
accounted for companys 30% domestic sales volume.

54

The current dies, imported from Japan, were good for stamping out the body
panels of a million 800s. Now, two overhauls later, they are expected to be around
for another 2-3 years. The dies can be replaced, but it is a costly affair.

The competition from the larger A2 segment cars and Marutis strategy of
positioning its other model ALTO as an alternative to Maruti 800 has affected
the sales of Maruti 800.

Easier finance schemes have shifted Customer preferences towards other

segments.

The second hand cars have eaten into the market for A1 segment cars. If a
customer can get a good SANTRO or WAGONR at a price of a new Maruti 800
they may opt for the same.

The competitor companies like TATA is planning to come with their Rs. 1 Lakh
car in coming time which could directly affect Marutis A1 segment sales.

Segment A2:

The competition from the larger A2 segment cars has affected the market share
of Maruti where it has major share in the market.

Easier finance schemes have shifted Customer preferences towards larger cars.

Segment A3:

In Segment A3 Esteem sales are on a continuous decline even though price have
been reduced considerably.

Baleno sales have not picked up despite several attempts at sales promotions.

Segment C:

The sale of versa has increased after major price reductions but still way behind
sale of competitors like Qualis, Sumo, etc.

Rural Market:
Rural India, with its poor and at times non-existent roads, has been dominated by
rugged multi-utility vehicles from Mahindra & Mahindra and the Tatas for a long
time.

55

According to a 2001 study conducted by the National Council for Applied Economic
Research (NCAER), there are as many middle-income and above households in the
rural areas as there are in the urban areas and about twice as many lower middleincome households.At the highest income level there are 2.3 million urban
households as against 1.6 million households in rural India. The study also says the
number of middle- and high-income households in rural India is expected to grow
from 80 million in 2001 to 111 million by 2007.
Rural people have strange notions about a car - that the EMI (equated monthly
instalments) would range between Rs 4,000 and Rs 5,000. That, plus another Rs
1,500-2,000 for monthly maintenance, another Rs 1,000 for fuel (would be the cost of
using the car).
Second Hand Car Market:
This concept revolves around the total total lifetime value of a car.
If a buyer spends Rs 100 on a car during its entire life, one-third of that is spent on its
purchase. Another third went into fuel. And the final third went into maintenance.
Earlier, Maruti was getting only the first one-third of the overall stream
People kept their cars longer as it is not easy to trade in an old car, thanks to
information asymmetry that prevails in the second hand car market. In addition the
difficulty in financing for second hand cars and lack of credible firms in this market
added on to the customer reluctance to deal in second hand cars. (Used car market in
developed markets was 2-3 times as large as the new car market. In India, that ratio
was 1:1)
As the Indian market matured, customers began to change cars faster. So the question
is, if a car is going to see three users in, say, a life span of 10 years, how can I make
sure that it comes back to me each time it changes hands?

Strategy Formulation
A1 Segment: To phase out the Maruti 800 with the Alto as the alternative.
56

But the problem is the price differential between the air-conditioned 800 and the Alto
LX. AC 800 comes for Rs 2.26 lakh, while the Alto LX costs Rs 2.65 lakh (after the
price reductions in the recent past). So there is still a Rs 40,000 difference.
A team of engineers of Maruti Udyog (MUL) should be formed, the team would have
to meet a few of the company's 268 vendors. The teams job would be to bring down
the price of the 800 cc Alto LX model by Rs 40,000 to the price of the Maruti 800.
PUSH 800 in smaller centers and rural areas.
Maruti 800 is showing a decline after being largest selling car for several years. The
firm is not in a position to bring down its cost, so they are looking for other means to
it more affordable. Hence they are also trying to push the cars in smaller centers and
rural markets.
A2 Segment: Introduction of new features in all the models of Segment A2 at no
extra price like completely redesigned headlamps, tail lamps and a new flowing
chrome grille with provision for front fog lamps. Offering special up gradation
package for the Lxi. Variants of the different Brands in this segment. These packages
would be worth Rs.14,000 which would include Body colored bumpers, Wooden
finish interiors, Alloy wheel caps, Body colored Door vision set.
For enhancing sales in the A2-segment, every time any of his 3.2 million owners of
800 or the Omni decide to trade in their car, and upgrade. His dealers will give them
loyalty discounts to get them to upgrade to a Maruti A2 segment car. With support
from parent company, Suzuki Motors, Maruti Udyog Ltd (MUL) may work on
developing a new compact car in the A2 segment for both the domestic and the export
market.
Segment A3:
After having lost market share to Tata Motor's Indica and Hyundai's Santro in the
compact segment, Maruti can decide to protect its share of the profitable mid-size
segment
Esteem To Be Priced Lower

57

The base model of Esteem Diesel (without power steering) comes for Rs 4.83 lakh
(all prices are ex-showroom Delhi) against Rs 5.22 lakh earlier, while the loaded
version will come for Rs 5.09 lakh, down from Rs 5.48 lakh. At its prevailing price
the Esteem diesel is just a little more expensive than the Tata Indigo diesel (Rs 5.02
lakh) Hence the price reduction of loaded version can be reduced to Rs. 5 lakhs to be
less than competitors price.
Baleno to Be Further Discounted
Baleno Vxi to be offered at a comparable price than the other Segment A3 cars like
Hyundai Accent GVS, Ikon Zxi (Rs 6.06 lakh) . Baleno Vxi presently priced at Rs
6.29 Lakh should be discounted to price of Rs. 6 lakhs this can be done at the cost of
power windows, power mirrors, rear defoggers.
For the second hand car market:
Maruti has created a system where dealers pick up used cars, recondition them, give
them a fresh warranty, and sell them again.
This way MUL will create a number of new revenue streams without making large
investments. Dealers make all investments for True Value. MUL should aim at
convincing 183 authorized dealers, selling Maruti cars through 241 outlets, to open at
least one True Value outlet each within two years.
Taxis & Government Vehicles: Maruti should plan to displace the good old
Ambassador from the taxis and government vehicles segment. This is one area where
sales can increase tremendously. MUL has CNG-powered, environmentally fit
vehicles, which are best, suited as taxis and government cars.
MUL can offer discounts in the form of rebate to taxi owners to buy Maruti cars. If
this strategy is able to convert old cars into new green Maruti, MULs sales will
leapfrog by at least 10 per cent."
Taxi customers can get rebate of 8% on the assessable value of the vehicle. In
absolute value, this ranges from approximately Rs. 10,000 on Omni to Rs. 28,000 on

58

Baleno. This rebate would be available on all the vehicles having seating capacity up
to seven including the driver.
Vehicles for Corporate:
Offering CNG fitted Versa as a vehicle to be used for Pick up & drop service for their
employees. A 5% discount (Rs 22,000 on Versa Dx2) would be offered to these
corporates on a bulk purchase of more than ten Versas. This would help increase the
sales of Maruti Versa. by 15% ( 3500 units).
Hence on the basis of this the pricing strategy is given as:
PRICE

HIGH

HIGH

MEDIUM

LOW

PREMIUM

HIGH VALUE

SUPER VALUE
GOOD

PRODUC

MEDIU

OVERCHARGI

Vitara
MEDIUM VALUE

NG

Zen,

Esteem , Baleno
RIP OFF

Versa
FALSE

Alto
ECONOMY

ECONOMY

Maruti

QUALIT
Y

LOW

Wagon

R, VALUE

800,

Omni
Rural Market:
To counter that apprehension discussed in the market situation, the company should
work on a novel idea.
For EMI: Maruti has tied up with State Bank of India (SBI). Today, organized
finance is available in just 50-60 towns in India, but MUL has dealerships in 180
cities. The SBI deal gives MUL access to about 9,000 SBI branches and another 5,000
branches of its affiliate banks A typical two-wheeler loan lasts 2-3 years, charges a
high rate of interest, and has a monthly payment of around Rs 2,000. Now, SBI and its
affiliate banks are offering 5-7 year loans for the 800. They will charge a far lower
rate of interest - around 9.5% - and the monthly installment will be just Rs 2,800.

Fuel How much you spend on fuel is in your hands.

59

Maintenance: As far as the maintenance cost is concerned, company will charge a

little extra in the EMI and offer free maintenance.
Extra Benefit: With the State Bank of India, MUL can come out with a scheme
where installments can be paid every six months - after the rabi and kharif harvests.
This makes the total cost per month to keep a car to be around 3500 as compared to
the notional 7000 earlier which makes it a good option.
Vendor rationalization: The cost reduction strategy of the company has also been
successful partly because of a cost reduction with vendors. Maruti will work closely
with current vendors to cut down costs at the vendor end. The company seeks to
reduce costs by 10% per vehicle in the period.
Objective:
To attain a sales turnover of Rs.14800 Crore in 2005-06 with a Net Profit of Rs.380
Crore. The explanation for the above stated objective is as follows: Average
Realization per Car: Rs.2,70,000 Average Number of Units to be sold in 2005-06
548350 units
(The average realization is the sale value realized by Maruti by selling one unit of the
product for e.g. for selling one unit Maruti 800, Maruti realizes 1.7 lacs as sales
revenue.)
The total number of units would be spread over a period of 12 months.
The sales has been spread over the twelve month period on the basis of the month
wise sale trends during the past few years.
Total
Marc Annual
Segments April May June July Aug
Segment

Sep

Oct

Nov

Dec

Jan

Feb

h Sales
1053

A1
12762 11518 12375 10987 10020 11190 13378 10302 9068 11069 9244 8 132449
Segment 22190 24308 21583 26258 24093 25186 26834 26373 23873 29918 2681 3056 307992

60

A2
Segment

A3
1510 1737 1440 2685 2843 3382 2964 3848 3435 3705 2476 2823 32847
Segment
C
Total
Sales

5538 5809 5621 5887 6197 6479 7022 6193 6023 6893 6262 7138 75062
4479 5106
42000 43371 41019 45817 43153 46237 50198 46715 42398 51586
S.W.O.T ANALYSIS OF THE ORGANIZATION

548350

STRENGTHS:
Well Established Co. since 1983.
Joint venture of Suzuki Motor Corporation, Japan.
Trusted brand in India.
Only producer of the A1 segment car in India currently.
Strong distribution network all over India.
It has the maximum number of service stations all over the country, with services
available in the remote areas too.
Easy availability of spare parts at low cost.
Cars known for there efficiency, efficiency in term of maintenance cost and
running cost.
Tie up with SBI to provide financial services in the rural areas too.
Other services like True Value, Maruti Insurance and Maruti Finance which help
to provide the turn key services to the customers.
Large share in total car exports to Europe.
WEAKNESS:
The company does not offer diesel version of there brands.
The numbers of models offered in A3 and C segment are very less.
The models offered by the company are very old and looks outdated in
comparison to the new cars available in the segment.
61

 The company has low brand recognition in A3 and C segment.

Not perceived as a luxury car manufacturer but as a small car manufacturer.
OPPORTUNITY:
Opportunity exists in the A3 segment, which has recorded a double digit growth of
15% in Indian market.
The company can sign in contracts with MNCs for providing them with the cars
for purpose of pick and drop. This way the sales of Versa can be improved.
The company can come out with a CNG fitted kit model for cars for taxi purpose.
Coming out with diesel variants of the different Brands.

THREATS:
The Rs. 1.5 lakh car to be launched by Tata and TVS India.
Launch of new cars like Getz, Fusion in the upper A2 segment.
Price reduction and heavy discounts by other car manufacturer like Hyundai, Ford
in the A3 segment.
Introduction of new models of international players in the C segment. Eg.
INNOVA.
Launch of base model Santro for 2.8 lacs, closer to Marutis Altos price and a
threat for Marutis A1segment

62

FINDINGS

63

FINDINGS
Most of the respondents were choosing the option 17% responds only brand 35%
responds demand supply factor, 23% responds only quality and 25% responds
others major factor to increase the sale Maruti products.
Most of the respondents were choosing the option 75% responds Maruti is
growing and has good future, 20% responds maruti is like any other automobile
company and 5% responds cant say Maruti Suzuki has a future growth.
Most of the respondents were choosing the option 53% responds made industry
more competitive Foreign Automobile Companies affect the prospects of the
domestic players in the Indian market.
Most of the respondents were choosing the option 77% responds infrastructure
assessment & development maruti marketing major weakness.
The competition in AUTOMOBILE sector is the highest. So to remain in the
competition all automobile companies have to develop in terms of technology, look,
and other features. MUL as a Indian company is the market leader in INDIA, but as
the globalization is coming up and the govt is encouraging the FDI, it is getting
tougher for MUL to maintain its market share. As many MNC are coming to INDIA
with improved technology & features, MUL has to improve its existing technology &
have to add new features to rope down the existing as well as the new customers.
MUL has to add new products to its product mix. MUL has to go for more promotion
to catch up the MNCs.
The study, which I conducted on the In-depth Analysis of MUL. in the area of
Marketing has been a very gratifying experience at the outset, the objectives were to
cover the whole marketing strategies adopted by MUL. The entire report has been
effort to do just that.
Through out the study I found MUL USE modern technology in their maruti car. As a
result they give better performance than other maruti car in the market & required less
maintenance. MUL also provides good after sale service to the customer .

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RECOMMENDATIONS

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RECOMMENDATIONS
In order to provide all the shots in the armoury of their employees the company
should implement these policies at level:
1.

The company should arrange for inter corporate programmes so that the best
practises or concepts would be interchanged.

2.

The company should provide their employee to go in for management

programmes from top management schools in gain new ways of doing thing.

3.

The firms will have to set up small experimental shops where an organisation
can house its best talent to pursue experiment innovate develop cutting edge
products, dream up new and better ways of running a business in order to
develop positive value addition to the organisation.

4.

The company should arrange for games etc in order to create a forum of
informal interaction between customer and employees. These meeting will help
employees develop new skills or get an idea for a new product etc.

5.

An separate column in the appraisal form should be there for new skill acquired.
Then on the basis of 2 or 3 new skill acquired he should be appraised and also
the compensation be raised. This will go a long way in motivating employees in
developing new competencies.

6.

The organisation environment should be made conducive like the introduction

of flexi-time, the accessibility of the work place 24 hours.

7.

The training programme should be serviced from outside. Various leaders in

various fields should be invited as faculty or for guest lecture.

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BIBLIOGRAPHY

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BIBLIOGRAPHY

1. M. Mahnot, Passenger Cars, Market forecast and indicators 2005 -2015

2. Philip Kotler, Marketing Management, pp. 470 502
3. M.Rajshekhar,Cover Story Defence As Offence,Businessworld (November 17,
2006)
4. Girish Rao, Maruti charts growth via leasing, fleet management, The Economic
Times, 25th March 2006.
5. Lancelot Joseph, First in class, Business India, 26th May 2006.
6. www.marutiudyog.com
7. www.siamindia.com
8. www.agencyfaqs.com
9. http://www.cybersteering.com/pulmain/motoring/download/News050101.rtf
10. http://www.vedpuriswar.org/articles/Indian%20Cases/Maruti%20Udyog%20in
%202003.pdf
11. http://www.vedpuriswar.org/book/the_car_industry.htm
12. http://fecolumnists.expressindia.com/print.php?content_id=66943
13. http://expressindia.com/budget/05/fullstory.php?content_id=80266
14. http://www.sharekhan.com/articles/UnionBudgetSpeech04.htm
15. http://www.indiainbusiness.nic.in/india-profile/automobile.htm
16. http://www.marketingteacher.com/Lessons/lesson_PEST.htm

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