A PROJECT REPORT ON

MARKETING STRATEGY OF MARUTI UDYOG LTD.

SUBMITTED TO

Guru Ramdas Ins ! u " #$ Mana%"m"n & T"'(n#)#%* +GRD IMT, In partial fulfilment of Master in Business Management +MBA)

UTTARAK-AND TEC-NICAL UNI.ERSTIY/ DE-RADUN +UK,

Su0m! "d 0*1 S-UB-ENDU PANDEY R#)) n#123435655574 Ba '(127553288

Su0m! "d #1 Mr. S-AILENDRA PUNDIR S"n!#r L"' ur"r GRD2IMT

MARKETING STRATEGY OF MARUTI UDYOG LTD

Declaration
I hereby declare that the work which is being presented in the project entitled MARKETING STRATEGY OF MARUTI in partial fulfillment of re uirement of the award for degree of MASTER OF BUSINESS ADMINISTRATION is an original work carried out by s(u0("ndu 9and"* under !uper"ision of Mr. An:! G#") +Ass!s an sa)"s mana%"r.,

Da "d1 +S(u0("ndu Pand"*, MBA +Y"ar,

T(!s !s # '"r !$* (a (" a0#;" s a "m"n mad" 0* (" 'and!da " !s '#rr"' # (" 0"s #$ m* :n#<)"d%".

Pr#="' Gu!d" Mr. S(a!)"ndra Pund!r

ACKNO>LEDGEMENT

I would like to place on the record the tremendous help that I ha"e recei"ed from persons who contributed towards gi"ing this report its present form# I wish to e$press my deep gratitude to Mr. An:! G#") for acting as a guide and pro"iding me with continuous support and guidance# %his report could not ha"e fruition without the inputs and the words of ad"ice from him for which we shall always remain grateful to him# I am also thankful to all the faculty members for their cooperation and guidance#

+S(u0("ndu Pand"*,

INTERNAL GUIDE CERTIFICATE

I ha"e the pleasure in certifying that Mr. S(u0("ndu 9and"*& is a bonafide student of 'rd !emester of the Mas "r?s D"%r"" !n Bus!n"ss Adm!n!s ra !#n #$ GRD2IMT & Dehradun under (ni"ersity )oll *o# +,+-.---/, 0e has completed her project work entitled MARKETING STRATEGY OF

MARUTI UDYOG LTD. under my guidance#

I certify that this is his original effort 1 has not been copied from any other source# %his project has not been submitted in any other uni"ersity for the purpose of award of any Degree# %his project fulfils the re uirement of the curriculum prescribed by U ara:(and T"'(n!'a) Un!;"rs! */ Dehradun& for the said course# I recommend this project for e"aluation 1 consideration for the award of degree to the student#

S!%na ur"1 Nam" #$ (" Gu!d"1 Da "1

Pr"$a'"
)esearch work constitutes the back bone of any management education program# A management graduate has to do the research uite fre uently during the entire life span# %he idea this research has concei"ed as a part of the summer training program after two semester of full time MBA course at GRD IMT/ DE-RADUN. %his work %o study what are strategies adopted by MA)(%I has been done to check the effecti"eness are these strategies and know what is effecti"e promotion strategy of MA)(%I and find out the e$porting planning for Maruti 2ars# I will be e$tremely satisfied if the effort is appreciated#

CONTENTS
2hapter %itle Acknowledgement 3reface %itle 3age *o# i) ii) iii)

4# 2ompany profile /# Mission and "ision '# 3roduct 3rofile of Maruti ,# 9bjicti"e of the company .# )esearch Methodology 8# 9bjecti"e of the study 5# Data Interpretation :# ;imitations +# 2onclusion 4-# Bibliography

5 6 44 4/ 4'748 4574: 4+ //478. 88 8578: 8+

Company Profile
Maruti (dyog ;imited <M(;) was established in =eb 4+:4 through an Act of 3arliament& to meet the growing demand of a personal mode of transport caused by the lack of an efficient public transport system# It was established with the objecti"es of 7 moderni>ing the Indian automobile industry& producing fuel efficient "ehicles to conser"e scarce resources and producing indigenous utility cars for the growing needs of the Indian population# A license and a ?oint @enture agreement were signed with the !u>uki Motor 2ompany of ?apan in 9ct 4+:'& by which !u>uki ac uired /8A of the e uity and agreed to pro"ide the latest technology as well as ?apanese management practices# !u>uki was preferred for the joint "enture because of its track record in manufacturing and selling small cars all o"er the world# %here was an option in the agreement to raise !u>ukiBs e uity to ,-A& which it e$ercised in 4+:5#=i"e years later& in 4++/C !u>uki further increased its e uity to .-A turning Maruti into a non7go"ernment organi>ation managed on the lines of ?apanese management practices# Maruti created history by going into production in a record 4' months# Maruti is the highest "olume car manufacturer in Asia& outside ?apan and Dorea& ha"ing produced o"er . million "ehicles by May /--.# Maruti is one of the most successful automobile joint "entures& and has made profits e"ery year since inception till /---7-4# In /---7-4& although Maruti generated operating profits on an income of )s +/#. billion& high depreciation on new model launches resulted in a book loss#

%he E"olution
MarutiBs history of e"olution can be e$amined in four phasesF %wo phases during pre7liberali>ation period <4+:'7:8& 4+:874++/) And two phases during post7liberali>ation period <4++/7+5& 4++57 /--/)& followed by the full pri"ati>ation of Maruti in ?une /--' with %he launch of an initial public offering <I39)#%he first phase started when Maruti rolled out its first car in December 4+:'# During the initial years Maruti had ::' employees& a capital of )s# 8-5 mn and profit of )s# 45 mn without any ta$ obligation# =rom such a modest start the company in just about a decade <beginning of second phase in 4++/) had turned itself into an automobile giant capturing about :-A of the market share in India# Employees grew to /--- <end of first phase 4+:8)& '+-- <end of second phase 4++/) and .5-- in 4+++# %he profit after ta$ increased =rom )s 4:#85 mn in 4+:, to )s# 8:.,#., mn in 4++: but started declining during 4++57 /--4#

During the pre7liberali>ation period <4+:'74++/) a major source of MarutiBs strength was the wholehearted willingness of the Go"ernment of India to subscribe to !u>ukiBs technology and the principles and practices of ?apanese management# ;arge number of Indian managers& super"isors and workers were regularly sent to the !u>uki plants in ?apan for training# Batches of ?apanese personnel came o"er to Maruti to train& super"ise and manage# MarutiBs style of management was essentially to follow ?apanese management practices# %he 3ath to !uccess for Maruti was as followsF <a) %eamwork and recognition that each employeeBs future growth and prosperity is totally dependent on the companyBs growth and prosperity <b) !trict work discipline for indi"iduals and the organi>ation <c) 2onstant efforts to increase the producti"ity of labour and capital <d) !teady impro"ements in uality and reduction in costs <e) 2ustomer orientation <f) ;ong7term objecti"es and policies with the confidence to reali>e the goals <g) )espect of law& ethics and human beings# %he path to success translated into 3ractices that MarutiBs culture appro$imated from the ?apanese management 3ractices#

India Four Wheeler Industry

%he =our7Hheeler Industry in India has not uite matched up to the performance of its counterparts in other parts of the world# %he primary reason for this has been the all7per"asi"e regulatory atmosphere pre"ailing till the opening up of the industry in the mid74++-s# %he "arious layers of legislati"e Acts sheltered the industry from e$ternal competition for a long time# Moreo"er& the industry was considered low7priority as cars were thought of as unaffordable lu$uryI# 3ost ;iberali>ation& the car market in India ha"e been in a burgeoning stage with all types of cars flooding the market in order to meet the demands of Indian customers who are increasingly e$posed to state of the world automobiles and want the best when it comes to purchasing a car#

It is e$pected that by /-'-& the Indian car market will be the 'rd largest car market across the globe# %he main encouraging factors for the success story of the car market in India are the increase in the opportunity for new in"estments& the rise in the GD3 rate& the growing per capita income& massi"e population& and high ownership capacity# %he liberali>ation policies followed by the Indian go"ernment had been in"iting foreign players to participate in the car market in India# %he recent trend within the new generation to get work in the software based sector has led to the rise in the income le"el and change in the lifestyle significantly& which has further led to the increase in the demand for lu$urious cars among them# %he car Market in India is crowded with all "arieties of car models like the small cars& mid7si>e cars& lu$ury cars& super lu$ury cars& and sports utility "ehicles# Initially the most popular car model dominating the 2ar Market in India was the Ambassador& which howe"er today ga"e way to numerous new models like 0yundai& 0onda& Mercedes7Ben>& BMH& Bentley and many others# Moreo"er& there are many other models of cars in the pipeline& to be launched in the car market in India# !ome of the leading brands dominating the car market in India at present are 0industan Motors& )e"a Electric 2ar 2o#& =iat India 3ri"ate ;td#& Daimler 2hrysler India 3ri"ate ;td& =ord India ;td#& and 0onda !iel 2ars India ;td#& General Motors India& 0yundai Motors India ;td#& !koda Auto India 3ri"ate ;td# and %oyota Dirloskar Motor ;td# !ince the demand for foreign cars are increasing with time& big brands like Mercedes Ben>& @olkswagen& Aston Martin& =errari& and )olls7)oyce ha"e long since made a foray into the Indian car market#

Facts about Indian Car Market

Although the Indian automobile industry has come a long way since the deregulation in 4++'& India does not rank well among its global peers in

many respects& "i>#& the contribution of the sector to industrial output& number of cars per person& employment by the sector as a percentage of industrial employment& number of monthsJ income re uired to purchase a car& and penetration of cars#

Figure:-3assenger "ehicle stock per 4-- people India is far behind

from other countries with just 8#+ cars per 4-- persons& while (nites !tates has 58#+ cars on per 4-- persons# Among de"eloping countries& )ussia also stands ahead than India and 2hina with 48#' cars per 4-persons# %wo things that stunted growth of the Indian automobile industry in the past ha"e been low demand and lack of "ision on the part of the original e uipment manufacturers <9EMs)# 0owe"er& the demand has picked up after the liberali>ation of the regulatory en"ironment& and global 9EMs who enjoy scale economies both in terms of manufacturing and research and de"elopment <)1D) entered the Indian market# %his has resulted in a significant shift in the way business is conducted by suppliers& assemblers and marketers#

Vision
%he leader in the India Automobile Industry& 2reating 2ustomer Delight and !hareholderBs HealthC A pride of India

Mission
%o pro"ide ma$imum "alue for money to their customers through continuous impro"ement of products and ser"ices# Maruti has a network of '+4 sales

outlets across /'- cities all o"er India# %he ser"ice network co"ers 4&44' towns and cities& bolstered by /&4,/ authori>ed ser"ice outlets# %he companyJs change in strategy and emphasis on de"eloping effecti"e marketing communications was their highlights#

Pr#du' Pr#$!)" #$ Maru !

MARUTI 8 - C!A"#$ %&UR 'IF$

It has gone beyond being just a carC it has actually changed the lifestyles of countless people& by bringing the joy of motoring to millions across the length and the breadth of the country# !tanding testimony to this claim is the fact that more than / millions Maruti :--s ha"e been sold till date# %oday& India best selling continues to be the final word on "alue and economy at the entry7le"el segment# A'T& - '$T() #& %he alto is a great combination of economy& practicality and styling# A runaway success on the roads of Europe& it e$emplifies the benchmark in build& uality and reliability in a compact car# %his is testified by the /, hour endurance record set on August '& /--' of co"ering '-:/ kms in /, hours at an a"erage speed of 4/: kmph#

WA#&" R-I")*IRI$+ $"#I"$$RI"# %he Hagon )B! original tall body design& spaciousness& ergonomically designed interior and fle$ible seating all set it apart from other cars# It complements the buyers uni ue personality enables him to li"e a multi7 dimensional life by the sheer e$cellence of its engineering and its "ersatility# ,$" -)URR$"+$R T& T!$ "$W ,$" If you are looking for a car with drop 6 dad looks and unmatched performances& then you need look beyond the Ken# Hith its new contemporary and aggressi"e look& the Ken preser"es its core "alues of dri"er appeal& unmatched reliability and economy#8----- satisfied customers in India and around the world bear testimony to this fact# &M"I - FIT) A'' %he 9mni is truly IndiaBs 9riginal Multipurpose @ehicle# %oday it is a"ailable in si$ a"atars 6 . seater& : seater& cargo& ambulance& 2*G and ;3G# It meets di"erse needs across different user segments and can double up both as a people carrier and a goods carrier# %his faithful workhouse is easy on the pocket& yet tough on the job# V$R)A - T!$ .&% &F TRAV$''I"# T&#$T!$R E uipped with twin A2& large sliding doors and fle$ible seating& the @ersa encourages families and friends to enjoy long dri"es and gateways together# In spite of being so spacious& its design allows for easy manoeu"rability in the city#

$)T$$M - *$RF&RMA"C$/ 0UA'IT% A"+ FU$' $FFICI$"C% (ndoubtedly one of IndiaBs fa"ourite entry 6 le"el 2 class "ehicles& the esteem is the perfect combination of power& comfort and economy#

ItBs also the preferred choice of rally dri"ers across the country for its performance and reliability# %he Esteem offers the option of an :. bhp petrol engine for those who desire power and a .5 bhp diesel for those who "alue economy# *ot surprisingly& it tops its class in uality sur"eys# )WIFT- %&U AR$ T!$ FU$' %he hot looks& se$y interiors& the automatic climate control& the air bags& the power steering moreo"er& all so affordable# %he wait is o"er# !wift has entered M(;s portfolio# Hhat are you waiting forL A-)TAR-)T&* 1 "&T!I"# 3owered by state of art ++: cc engine& itBs the best fuel efficient car in its category with& mileage coming around /-km per litre#

)2-3 - M$" AR$ 4AC5 )e"olutionary European design& world class dri"e by wire #Most spacious in its class& !teering mounted audio controlsC with ma$imum ground clearance& high on safety with dual airbags# )WIT +,IR$- T!$ !$ART CAR A car ha"ing e"erything you desire stunning looks& lu$urious interiors& enough power to capture your heart# ?ust slide in desire and take it for a spin# Its sure steals many of hearts including yours# Rit6 - 7'i8e the Mo9ent:

Model of /--+ known by the name !u>uki splash ha"ing attracti"e back with ma$imum ground clearance#

OBJECTIVE OF THE COMPANY

MarutiBs marketing objecti"e is to continually offer the customer new products and ser"ices thatF )educe the customers cost of ownership of their carsC and anticipate and address the 2ustomerBs needs and preferences in all aspects and stages of car ownership& to pro"ide what they refer to as the'8- degree customer e$perience#%hey sell ten models with more than .- "ariants in segments A& B& 2& and utility "ehicle segment of the Indian passenger car market# 9f these& they manufacture nine models and import the Grand @itara as a completely built unit from !u>uki in ?apan# %heir models and "ariants are designed to address the changing demands of the market and are periodically upgraded in technology& styling and features# %o take ad"antage of the brand recognition associated with their products& they retain the brand name of the product through "arious stages of product upgrades o"er time# =or e$ample& the "ersion of the Maruti :-- brand currently sold in

the market is a significantly upgraded "ersion& in terms of technology& design and styling& of the Maruti :-- launched in 4+:'#

#RA+$ CAR
A#Maruti :-A# 9M*I B# Ken B# Hagon ) B# Alto 2# Esteem 2# Baleno 2# @ersa 2# !HI=% (tility @ehicle GM3!M DI*G (tility @ehicle G)A*D @I%A)A

R"s"ar'( M" (#d#)#%*

R"s"ar'( is common parlance refers to a search for knowledge research is a scientific in"estigation# )esearch is a mo"ement from known to unknown# According to learnerBs dictionary of current English& research is A careful in"estigation or in uiry especially through search for new fact in any branch of knowledge According to )edman and Mory& research is !ystematic effort to gain new knowledgeB )esearch is an academic acti"ity and as such& the term should be used in a technical sense# It comprises defining and as such& the term should be used in a technical sense# It comprises defining and redefining problems& formulating hypothesis or suggested solutionF collecting& organi>ing and e"aluating data making deduction and conclusion to determine whether they fit the formulating hypothesis# )esearch Methodology may be defined as a way to systematically sol"e the research problem# )esearch mythology constitutes of research method& used in conte$t of research study and e$planation of using a particular method or techni ue and way other techni ues are not used# It also includes the reason for taking up a particular problem& the data collection & its analysis and interpretation# =or this particular the steps of research methodology are as gi"en belowF 4# !tate of problem /# E$tensi"e literature sur"ey '# Designing of study followed or the methodology

,# Data collection .# Analysis of data 8# 2onclusion and interpretation of research

O0="' !;" #$ (" s ud*

%he major objecti"es of my study are as followsF

4# =ind out the marketing strategies of MA)(%I (DM9G ;td# /# %o check out the Marketing mi$ strategies of MA)(%I# 3roduct strategies# 3lace strategies# 3rice strategies# 3romotion strategies#

'# E$porting strategies# ,# =ind out the B2G matri$ for maruti udyog ltd# .# =ind out the key success factor of maruti udyog and o"erall business strategies of MA)(%I (DM9G ;td

+ATA I"T$R*R$TATI&"

3*s:Product Price Place Promotion

*roduct )trategy: 3ortfolio of 4/ products =i"e product lines

3roduct ;ine 3roducts A47 :-A/7 Alto& Ken& Hagon 6)& !wift& A7star A' 7De>ire& !$,&!(@ @itara& Gypsy 2 7 2lass 9mni& @ersa

*rice )trategy:%he price of the Maruti car is between )s# /4---- to )s# 4.-----# Maruti 6 :-- is the lowest price car of this company# Alto& 9mni& Hagon )& are also the low price car of the company& Ken 1 Esteem are the mid price car of the company# But Grand @itara is the high price model of the company# %he price of car is decided according to its product "ariety& uality& design etc#

*lace strategy:8-- *ew car sales outlets co"ering '+' cities# /8. Maruti %rue @alue outlets spread across 488 cities#/8/: Maruti Authori>ed !er"ice !tations& co"ering 4//cities# %ie up with Adani group for e$porting /--&--- units through Mnudra port Gujarat

)uggested *lace strategy:,-- new car sales outlets in ne$t three years# !4.- new true "alue shops in ne$t three years# 4/-- new Maruti Authori>ed !er"ice !tations in ne$t three years# %ie up with other distributors for E$ports#

*ro9otion )trategy: Ad"ertising %@ Ads 3rint Ads

 )adio Ads Ghar AA Gaya 0industan India 2omes 0ome in Maruti !u>uki# Information Ad"ertising& alternati"e Ad"ertising 9ptions B%; 7 !ponsorships %@ shows 7 IndiaBs Got talent 3lace Ad"ertising 6 Bill boards !ales 3romotions 3roduct warranties 3remiums <gifts) %rade shows . /&8/:%he number of workshops that pro"ide customers with maintenance support in 4//- cities#

)W&T Analysis:-

)TR$"#T!)
Bigger name in the market %rust of 3eople Maruti (dyog ;td# is the market leader for more than decade# 0as a great dealership chain in the market# Better after sales ser"ice ;ow maintenance cost of "ehicle a

W$A5"$))$)
E$ports are not that good# ;esser diesel models in the market compare to others Global image is not that big

&**URTU"ITI$)
Great opportunities to go global with success of !wift and !N, all o"er# Introduction of more diesel models# %he diesel car segment is growing# 9pportunity to grow bigger by entering into bigger car markets# Already a market leader so great opportunity to be the king of market in e"ery stage of industry

T!R$AT)
=oreign companies entering marketC so a bigger threat from M*2s# %o the market share& as many big names are coming in the Industry# %here is hardly any diesel models )s# 4 lakh 6 )s# 4#. lakh car#

*ort;olio Analysis
MATRI2 o; MARUTI )U,U5I

!%A)F %he 2ompany has long run opportunity for growth and profitability# %hey ha"e high relati"e market share and high Growth rate# !HI=%& !HI=% DE!I)E A*D KE* E!%I;9 is the fast growing and has potentialto gain substantial profit in the market# O(E!%I9* MA)DF there are also called as wild cats that are new products with potential for success but there cash needs are high and cash generation is low# In auto industry of MA)(%I !N,& G)A*D @I%A)A& A!%A) there has been impro"e the organi>ation reputation# As they want successful not only in Indian market but as well as in global market#

2A!0 29HF It has high relati"e market share but compete in low growth rate as they generate cash in e$cess of their needs# MA)(%I :--& A;%9 A*D HAG*9) ha"e fallen to ladder ' 1 , due to introduction of KE* E!%A;I9 and A !%A)# D9GF %he dogs ha"e no market share and do not ha"e potential to bring in much cash# BA;E*9& 9MI*I& @E)!A %here businesses ha"e li uidated and trim down thus %he strategies adopted are that are har"est& di"est and drop# B2G matri$ can ser"es as a simple tool for "iewing a corporationBs business portfolio at a glance & and may ser"es as a starting point for discussing resource allocation among strategic business units#

T!$ *R&+UCTI&" *R&C$)) AT MARUTI

SABPTWLVSAERASEIENEHLSM INSPECTION STE#SPTP LRY# N$ ISPATCH FROM VEN ORS

TI!SCCIIBIONLNLEI""YL S

)trategy
%heir strategy is to capture the rural market by employing women who belong to their local community through which their product can reach to local consumers# %heir strategy is to pro"ide work for women to create awareness among confined consumers#

*rocess
%hey started with 3roject !hakti in which their basic aim is to educate a rural person about their products through women who belongs to their own local community and who can communicate well in their language with them# In this way many educated women get work in rural sector and on the other hand 0;; 2orporate !ocial )esponsibility <2!)) also increases towards society by introducing educati"e programs for the benefit of the rural sector#

5$% )TRAT$#IC I"ITIATIV$) 4% MARUTI

A< TUR" AR&U"+ )TRAT$#I$) MARUTI F&''&W$+

Maruti was the undisputed leader in the automobile utility7car segment sector& controlling about :,A of the market till 4++:# Hith increasing competition from local players like %elco& 0industan Motors& Mahindra 1 Mahindra and foreign players like Daewoo& 3A;& %oyota& =ord& Mitsubishi& GM& the whole auto industry structure in India has changed in the last se"en years and resulted in the declining profits and market share for Maruti# At the same time the Indian go"ernment permitted foreign car producers to in"est in the automobile sector and hold majority stakes# In the wake of its diminishing profits and loss of market share& Maruti initiated strategic responses to cope with IndiaBs liberali>ation process and began to redesign itself to face competition in the Indian market# 2onsultancy firms such as A% Dearney 1 McDinsey& together with an internationally reputed 9D consultant& Dr# Athreya& ha"e been consulted on modes of strategy and organi>ation de"elopment during the redesign process# %he redesign process saw Maruti complete a )s# ,--- mn e$pansion project which increased the total production capacity to o"er '&5-&--- "ehicles per annum# Maruti e$ecuted a plan to launch new models for different segments of the market# In its redesign plan& Maruti launches a new model e"ery year& reduce production costs by achie"ing :.7+-A indigeni>ation for new models& re"amp marketing by increasing the dealer network from 4.- to '-- and focus on bulk institutional sales& bring down number of "endors and introduce competiti"e bidding# %ogether with the redesign plan& there has been a shift in business focus of Maruti# Hhen Maruti commanded the largest market share& business focus was to sell what we produce# %he earlier focus of the whole organi>ation was Iproduction& production and productionI but now the focus has shifted to Imarketing and customer focusI# %his can be obser"ed from the changes in mission statement of the organi>ationF 4+:,F I=uel efficient "ehicle with latest technologyI# 4+:5F I;eader in domestic market and be among global players in the o"erseas marketI# 4++5F I2reating customer delight and shareholders wealthI# =ocus on customer care has become a key element for Maruti# Increasing Maruti ser"ice stations with the scope of one Maruti ser"ice

station e"ery /. km on a highway# %o increase its market share& Maruti launched new car models& concentrated on marketing and institutional sales# Institutional sales& which currently contributes to 57:A of MarutiBs total sales# 2ost reduction and increasing operating efficiency were another redesign "ariable# 2ost reduction is being achie"ed by reaching an indigeni>ation le"el of :.7+- percent for all the models# %his would sa"e foreign currency and also stabili>e prices that fluctuate with e$change rates# 0owe"er& change in the mindset was not as fast as re uired by the market# Maruti planned to reduce costs& increase producti"ity& uality and upgrade its technology <Euro I1II& M3=I)# In addition& it followed a high "olume production of about ,--&--"ehicles Pyear& which entailed a smooth relationship between the workers and the managers# 3ost4+++& the market structure changed drastically# ?ust before this change& Maruti had wasted two crucial years <4++874++:) due to go"ernmental inter"entions and negotiation with !u>uki of ?apan about the break7up of the share holding pattern of the company# %here was a change in leadership& Mr# !ato of !u>uki became the 2hairman in ?une 4++:& and the new Mr# ?# Dhatter was appointed as the new ?oint MD# Dhatter was a belie"er in consensus decision making and participati"e style of management# As a result of the internal turmoil and the changes in the e$ternal en"ironment& Maruti faced a depleting market share& reducing profits& and increase in in"entory le"els& which it had not faced in the last 4: years# After their fall in market share they redesigned their strategies and through their parent company !u>uki they learned a lot# %he organi>ational learning of Maruti was moderately successfulC the cost was relati"ely ine$pensi"e as Maruti had its strong ?apanese practices to fall back upon# Hith the program of organi>ational redesign& rationali>ation of cost and enhanced producti"ity& Maruti bounced back to competition with .-#:A market share and ,-A rise in profit for the =M/--/7/--'#

4< CURR$"T )TRAT$#I$) F&''&W$+ 4% MU' 3)I2I*G !%)A%EGM 7 2A%E)I*G %9 A;; !EGME*%!

Maruti caters to all segments and has a product offering at all price points# It has a car priced at )s#4& :5&---#-- which is the lowest offer on road# Maruti gets 5-A business from repeat buyers who earlier had owned a Maruti car# %heir pricing strategy is to pro"ide an option to e"ery customer looking for up gradation in his car# %heir sole moti"e of ha"ing so many product offering is to be in the consideration set of e"ery passenger car customer in India# 0ere is how e"ery price point is co"ered#
Sl%No% BRAN VARIANTS PRICE IN ELHI &R'%( 1 "RAN VITARA XL7 16,97,000.00 2 MAR#TI BALENO LXi 5,72,000.00 VXi 6,42,000.00 3 MAR#TI ESTEEM LX 4,66,000.00 VX 5,39,000.00 4 MAR#TI VERSA DX 4,19,000.00 DX2 4,58,000.00 5 MAR#TI SWIFT LXi 3,95,000.00 VXi 4, 05,000.00 ZXi 4, 85,000.00 6 MAR#TI WA"ON)R LX 3, 35,000.00 LXi 3, 62,000.00 AX 4,63,000.00 VXi 3,87,000.00 VXi ABS 4,20,000.00 7 MAR#TI "YPSY ST 5,06,000.00 HT 5,29,000.00 8 MAR#TI *EN D 3,58,000.00 LX 3,41,000.00 LXi 3,68,000.00 VXi 3,93,000.00 9 MAR#TI OMNI CARGO 2,05,000.00 CARGO LPG 1,83,000.00 5 SEATER 2,27,000.00 8 SEATER 2,21,000.00 XL 5 SEATER 2,19,000.00 XL 8 SEATER 2,31,000.00 10 MAR#TI ALTO STANDARD 2,38,000.00 LX 2,74,000.00 LXi 2,94,000.00 11 MAR#TI +,, STD. P!" 2,14,000.00 A#C P!" 2,37,000.00

II# 9==E)I*G 9*E !%93 !093 %9 2(!%9ME)! 9) 2)EA%I*G DI==E)E*% )E@E*(E !%)EAM! Maruti has successfully de"eloped different re"enue streams without making huge in"estments in the form of MD!& */*& Maruti Insurance and Maruti =inance# %hese help them in making the customer e$perience hassle free and helps building customer satisfaction# Maruti =inanceF In a market where more than :-A of cars are financed& Maruti has strategically entered into this and has successfully created a re"enue stream for Maruti# %his has been found to be a major dri"er in con"erting a Maruti car sale in certain cases# =inance is one of the major decision dri"ers in car purchase# Maruti has tied up with : finance companies to form a consortium# %his consortium comprises 2iticorp Maruti& Maruti 2ountrywide& I2I2I Bank& 0D=2 Bank& Dotak Mahindra& !undaram =inance& Bank of 3unjab and IndusInd Bank ;td# < erstwhile7Ashok ;eyland =inance)# Maruti InsuranceF Insurance being a major concern of car owners# Maruti has brought all car insurance needs under one roof# Maruti has tied up with *ational Insurance 2ompany& Bajaj Allian>& *ew India Assurance and )oyal !undaram to bring this ser"ice for its customers# =rom identifying the most suitable car co"erage to "irtually hassle7free claim assistance itJs your dealer who takes care of e"erything# Maruti Insurance is a hassle7free way for customers to ha"e their cars repaired and claims processed at any Maruti dealer workshop in India# %rue @alue 6 Initiati"e to capture used car market Another significant de"elopment is M(;Js entry into the used car market in /--4& allowing customers to bring their "ehicle to a JMaruti %rue @alueJ outlet and e$change it for a new car& by paying the difference# %hey are offered loyalty discounts in return# %his helps them retain the customer# Hith Maruti %rue @alue customer has a trusted name to entrust in a highly unorgani>ed market and where cheating is rampant and the biggest concern in biggest dri"er of sale is trust# Maruti knows its strength in Indian market and has filled this gap of pro"iding trust in Indian used car market# Maruti has created a system where dealers pick up used cars& recondition them& gi"e them a fresh warranty&

and sell them again# All in"estments for %rue @alue are made by dealers# Maruti has build up a strong network of 45/ showrooms across the nation# %he used car market has a huge potential in India# %he used car market in de"eloped markets was /7' times as large as the new car market# */*F 2ar maintenance is a time7consuming process& especially if you own a fleet# MarutiBs */* =leet Management !olutions for companies& takes care of the A7K of automobile problems# !er"ices include end7to7end backupsPsolutions across the "ehicleBs lifeF ;easing& Maintenance& 2on"enience ser"ices and )emarketing# Maruti Dri"ing !chool <MD!)F Maruti has established this with the goal to capture the market where there is inhibition in buying cars due to inability to dri"e the car# %his brings that customer to Maruti showroom and Maruti ends up creating a customer# III# )E39!I%I9*I*G 9= MA)(%I 3)9D(2%! Hhene"er a brand has grown old or its sales start dipping Maruti makes some facelifts in the models# 9ther changes ha"e been made from time to time based on market responses or consumer feedbacks or the competitor mo"es# 0ere are the certain changes obser"ed in different models of Maruti# 9mni has been gi"en a major facelift in terms of interiors and e$teriors two months back# A new "ariant called 9mni 2argo& which has been positioned as a "ehicle for transporting cargo and meant for small traders# It has recei"ed a "ery good response from market# A "ariant with ;3G is recei"ing a "ery good response from customers who look for low cost of running# @ersa prices ha"e been slashed and right now the lowest "ariant starts at '#' lacs# %hey decreased the engine power from 48--cc to 4'--cc and modified it again considering consumers perception# %his was a result of intensi"e sur"ey done all across the nation regarding the consumer perception of @ersa# Esteem has gone through three facelifts# A new look last year has helped boost up the waning sales of Esteem#

Baleno was launched in 4+++ at 5#/ lacs# In /--/ they slashed prices to 8#, lacs# In /--' they launched a lower "ariant as Baleno ;Ni at .#,8 lacs# %his was to reduce the price and attract customers# Hagon7) was percei"ed as dull bo$y car when it was launched# %his made it a big failure on launch# %hen further modifications in engine to increase performance and a facelift in the form of sporty looking grills on the roof# *ow itBs of the most successful models in Maruti stable# Ken has been modified four times till date# %hey had come up with a limited period "ariant called Ken 2lassic# %hat was limited period offer to boost short term sales# Maruti :-- has so far been face lifted two times# 9nce it came with M3=i technology and other time it came up with changes in front grill& head light& rear lights and with round cur"es all around# I@# 2(!%9ME) 2E*%)I2 A33)9A20 MarutiBs customer centricity is "ery much e$emplified by the fi"e times consecuti"e wins at ? D 3ower 2!I Awards# =ocus on customer satisfaction is what Maruti li"es with# Maruti has successfully shed off the public7 sector laid back attitude image and has inculcated the customer7friendly approach in its organi>ation culture# %he customer centric attitude is imbibed in its employees# Maruti dealers and employees are answerable to e"en a single customer complain# %here are instances of cancellation of dealerships based on customer feedback# Maruti has taken a number of initiati"es to ser"e customer well# %hey ha"e e"en changed their showroom layout so that customer has to walk minimum in the showroom and there are norms for ser"ice times and deli"ery of "ehicles# %he Dealer !ales E$ecuti"e& who is the first interaction medium with the Maruti customer when the customer walks in Maruti showroom& is trained on greeting eti uettes# Maruti has proper customer complain handling cell under the 2)M department# %he Maruti call center is another effort which brings Maruti closer to its customer# %heir Market )esearch department remains on its toes to study the changing consumer beha"iour and market needs# Maruti enjoys se"enty percent repeat buyers which further bolsters their claim of being customer friendly# Maruti is in"esting a lot of money and effort in building customer loyalty programmes#

@# 29MMI%%ED %9 M9%9)IKI*G I*DIA Maruti is committed to motori>ing India# Maruti is right now working towards making things simple for Indian consumers to upgrade from two7wheelers to the car# %owards this end& Maruti partnerships with !tate Bank of India and its Associate Banks took organi>ed finance to small towns to enable people to buy Maruti cars# )s# /.++ scheme was one of the outcomes of this effort# Maruti e$pects the compact cars& which currently constitute around :-A of the market& to be the engine of growth in the future# )obust economic growth& fa"ourable regulatory framework& affordable finance and impro"ements in infrastructure fa"our growth of the passenger "ehicles segment# %he low penetration le"els at 5 per thousand and rising income le"els will augur well for the auto industry# Maruti is busy fine7tuning another inno"ation# Hhile researching they found that rural people had strange notions about a car 7 which the EMI <e uated monthly instalments) would range between )s ,&--- and )s .&---# %hat& plus another )s 4&.--7/&--- for monthly maintenance& another )s 4&--- for fuel <would be the cost of using the car)# %o counter that apprehension& the company is working on a no"el idea# 2ontrol o"er the fuel bill is in the consumerJs hands# But& maintenance need not be# !ays DhattarF IHhat the company is doing now is saying how much you spend on fuel is in your hands anyway# As far as the maintenance cost is concerned& if you want it that way& we will charge a little e$tra in the EMI and offer free maintenance#I @I# DI!I*@E!%ME*% A*D I39 9= MA)(%I (DM9G ;IMI%ED It was a long and tough journey& but a rewarding one at the end# A reward worth )s/& ,/, crore& making it the biggest pri"ati>ation in India till date# %he si>e of MarutiBs sell7 off deal is proof of its success# 9n the in"estment of )s 88 crore it made in 4+:/& when Maruti (dyog ;imited <M(;) was formally set up& the sale represents a staggering return of '. times %he best part of the deal is the )s 4&--- crore control premium the Go"ernment has been able to e$tract from !u>uki Motor 2orporation for relin uishing its hold o"er IndiaBs largest car company# *ow looking at

the strategy point of it 6 for !u>uki& of course& complete control of M(; means a lot# Maruti is its most profitable and the largest car company outside ?apan# !u>uki will now be in the dri"erBs seat and will not ha"e to mind the whims and fancies of ministers and bureaucrats# Decisions will now become uicker# %he response to changing market conditions and technological needs will be faster& says ?agdish Dhattar& managing director& M(;# After the disin"estment !u>uki became the decision maker at M(;# %hey flowed fund in India for the major re"amp in M(;# Ouoting from the report that appeared in %he Economic %imes& ,th April /--.& 7 %he Indian car giant Maruti (dyog ;imited has finali>ed its two mega in"estment plans Q a new car plant and an engine and transmission manufacturing plant# Both the projects will be implemented by two different companies# At its meeting the companyJs board appro"ed a total in"estment of )s'&/54#+ crore for these two "entures& which will be located in 0aryana# %he abo"e signifies when G9I was a major stakeholder in the M(; strategies which lead to in"estment ha"e had a bureaucracy factor in it but after the disin"estment strategy followed is a %93 D9H* approach with a fast implementation# !u>ukiJs proposed two7wheeler facility in India& would start making motorcycles and scooters by the end of /--. through a joint "enture& in which Maruti has .4 per cent stake# %he two7wheeler unit will ha"e a capacity of /.-&--- units a year# %he disin"estment followed by I39 gi"es the insight in the fact that now all the strategic decisions are taken by Maruti !u>uki 2orporation# Disin"estment had helped by remo"ing the red tape and bureaucracy factor from its strategic decision making process# @II# )EA;I!A%I9* 9= IM39)%A*2E 9= @E0I2;E MAI*%E*A*2E !E)@I2E! MA)DE% In the old days& the companyJs operations could be boiled down to a simple three7bo$ flowchart# 2omponents came from the J"endorsJ to the JfactoryJ where they were assembled and then sent out to the JdealersJ# In

this scheme& you know where the companyJs re"enues come from# %he new scheme is more complicated# It re"ol"es around the total lifetime "alue of a car# Hork on this began in 4+++& when a M(; team& wondering about new re"enue streams& tra"elled across the world# !ays )#!# Dalsi& general manager <new business)& M(;F IHhile car companies were mo"ing from products to ser"ices& trying to capture more of the total lifetime "alue of a car& M(; was just making and selling cars#I If a buyer spends )s 4-- on a car during its entire life& one7third 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 one7third of the o"erall stream# As the Indian market matured& customers began to change cars faster# !ays DalsiF I!o the uestion was& if a car is going to see three users in& say& a life span of 4- years& how can I make sure that it comes back to me each time it changes hands L !o Maruti has changed gears to take a big share of this final one7third spent on maintenance# Maintenance market has a huge market potential# E"en after ha"ing fifty lakh "ehicles on road Maruti is only catering to appro$imately /---"ehicles through its ser"ice stations e"ery day# =or this they are conducting free ser"ice workshops to encourage consumers to come to their ser"ice stations# Maruti has increased its authori>ed ser"ice stations to 4.85 across 4-'8 cities# E"ery regional office is ha"ing a separate ser"ices and maintenance department which look after the growth of this re"enue stream# @III# 3;AMI*G 9* 29!% ;EADE)!0I3 Maruti is the price dictator in Indian automobile industry# ItBs the low cost pro"ider of car# %he lowest car on road is from Maruti stable i#e# Maruti :--# Maruti achie"es this through continuous impro"ements in operational efficiency and producti"ity# %he company has set itself <and its "endors) the target of a .-A impro"ement in producti"ity and a '-A reduction in costs in three years# %he ability to keep lowering the prices sets Maruti apart from other players in the league# Maruti spread the o"erheads o"er a larger base#

%he impressi"e sales and profits were the result of major efforts within the company# Maruti also increased focus on "endor management# Maruti consolidated its "endor base# %his has pro"ided its "endors with higher "olumes and higher efficiencies# Maruti does that by working with "endors& assuring them that for e"ery drop in price& "olumes will go up# Maruti is now encouraging its "endors to de"elop )1D capability for speciali>ed components# Based upon such acti"ities& product competiti"eness in the market will further increase# Maruti also made strides in applying I% to manufacturing# A new @ehicle %racking !ystem impro"ed efficiency on the shop floor and enhanced uality control# %he e *agare system& adopted from !u>uki Motor 2orporation& smoothened MarutiBs ?ust in %ime operations# 2) MA?9) =(%()E !%)A%EGIE! I# 30A!I*G 9(% KE* I* /--5 %he launch of !wift and phasing out Ken is a strategic mo"e# Alto was launched keeping in mind that it will take o"er Maruti :-- market in future# 3erhaps being the flagship product phasing out of Maruti :-faced lots of resistance from dealers all o"er# Another reason behind not phasing out Maruti :-- was the fear of brand shift of customers to other competitorBs product# !wift was launched in May& /--. in the price band starting from , lacs# Before launch of !wift Maruti management had decided that they will phase out Ken since it had already came up with two modifications# %he major reason behind this decision was cannibali>ation of Hagon) and !wift due to o"erlapping of price band# It is a rational decision to kill a product before it starts facing the decline stage in product cycle# Maruti is offering )s# '---#-- more margins to dealer on the sale of Hagon7) as compared to Ken# %his is to let dealer push Hagon ) instead of Ken# II# MA)(%I 3;A*! =9) A BIG DIE!E; =9)AM %he new car manufacturing company& called Maruti !u>uki Automobiles India ;imited& will be a joint "enture between Maruti (dyog and !u>uki Motor 2orporation holding a 5- per cent and '- per cent stake

respecti"ely# %he )s4&./,#/ crore plant will ha"e a capacity to roll out 4 lakh cars per year with a capacity to scale up to /#. lakh units per annum# %he new car manufacturing plant will begin commercial production by the end of /--8# Maruti would set up a diesel engine plant at Gurgaon in line with its plan to become a major player in diesel "ehicles in a couple of years# %his has been done in the wake of major competition from %ata Indica and meets the growing demand of diesel cars in India# Hhile the annual growth in the diesel segment was 4' per cent in the last three years& it was 4+7/per cent in the first uarter <April7?une) of the current fiscal# Maruti has currently an insignificant presence in diesel "ehicle# It will manufacture new generation 2)DI <common rail direct injection) engines in collaboration with =iat7GM 9pel and engines will be of 4/-- cc# %he plant with a capacity to produce one lakh diesel engines would be operational in /--8# At present& 3eugeot of =rance& supplies diesel engines for MarutiJs Ken and mid7si>ed Esteem models# %his will further reduce the imported component in Maruti "ehicles& making them more competiti"e in the Indian market# III# MA)(%I 3;A*! =9) A *EH E*GI*E A*D %)A*!MI!!I9* 3;A*% %he engine and the transmission plant will be owned by !u>uki 3ower train India ;imited in which !u>uki Motor 2orporation would hold .4 per cent stake and Maruti (dyog holding the balance# %he ultimate total plant capacity would be three lakh diesel engines# 0owe"er& the initial production would be 4 lakh diesel engines& /-&--- petrol engines and 4#, lakh transmission assemblies# In"estment in this facility will be )s#4&5,5#5 crore# %he commercial production will start by the end of /--8# I@# I*DIA A! EN39)% 0(B =9) MA)(%I %hree years back as an e$periment& based on the increasing design capabilities of suppliers in countries like India& McDinsey did an e$ercise to figure out just how much money could be sa"ed if automobiles were to be made in o"erseas locations like India& Me$ico and !outh Africa 77 an automobile B39& so to speak# %he result was

staggeringF the industry stands to gain R 4.- billion annually in cost sa"ings& and an additional R 45- billion annually in new re"enues once demand shoots up following the drop in prices& and the combination of which means a /. per cent increase in e$isting re"enue le"els# According to the study& o"er +- per cent of automobiles today are sold in the countries they are made in& so thereJs a lot of money to be made by shifting the production o"erseas# %ill recently& just 4--&--- cars produced in low7cost countries were e$ported to high7cost ones 77 presumably this figure is going up now that Altos from Maruti& !antro from 0yundai& Indicas from %ata Motors& and Ikons from =ord& among others& are being regularly e$ported out of India# Met& as McDinsey points out& since it just costs R .-- and just three weeks <and both figures are falling) to ship out a car to anywhere in the world& why produce cars in high7wage islandsL If a car was produced in India instead of in ?apan& the study says& it will cost //7/' per cent less& after factoring in higher import duties for componentsPsteel& lower le"els of automation& and transport costs# In August& /--' Maruti crossed a milestone of e$porting '--&--"ehicles since its first e$port in 4+:8# Europe is the largest destination of MarutiBs e$ports and coincidentally after the first commercial shipment of ,:- units to 0ungary in 4+:5& the '--&-- mark was crossed by the shipment of .54 units to the same country# %he top ten destination of the cumulati"e e$ports ha"e been *etherlands& Italy& Germany& 2hile& (#D#& 0ungary& *epal& Greece& =rance and 3oland in that order# %he Alto& which meets the Euro7' norms& has been "ery popular in Europe where a landmark /--&--- "ehicle were e$ported till March /--'# E"en in the highly de"eloped and competiti"e markets of *etherlands& (D& Germany& =rance and Italy Maruti "ehicles ha"e made a mark# %hough the main market for the Maruti "ehicles is Europe& where it is selling o"er 5-A of its e$ported uantity& it is e$porting in o"er 5- countries# Maruti has entered some uncon"entional markets like Angola& Benin& Djibouti& Ethiopia& Morocco& (ganda& 2hile& 2osta )ica and El !al"ador# %he Middle7East region has also opened up and is showing

good potential for growth# !ome markets in this region where Maruti is& are !audi Arabia& Duwait& Bahrain& Oatar and (AE#

%he markets outside of Europe that ha"e large uantities& in the current year& are Algeria& !audi Arabia& !rilanka and Bangladesh# Maruti e$ported more than .4&--- "ehicles in /--'7-, which was .+A higher than last year# In the financial year /--'7 -, Maruti e$ports contributed to more than 4-A of total Maruti sales# @# MA)(%I EME)GI*G A! )1D 0(B =9) !(K(DI M9%9) 29)39)A%I9* ?apanese auto major !u>uki is all set to con"ert Maruti (dyog ;tdBs research and de"elopment <)1D) facility as its Asia hub by /--5 for the design and de"elopment of new compact cars& according to a top official of the firm# %he countryBs leading car manufacturer will make substantial in"estments to upgrade its research and de"elopment centre at Gurgaon in 0aryana for e$ecuting design and de"elopment projects for !u>uki# %his includes localisation& modernisation and greater use of composite technologies in upcoming models# %he company will be hiring more software engineers and technocrats to handle !u>ukiBs )1D projects# In"estment would be more in terms of manpower than in infrastructure& which is already in place# Apart from working on inno"ati"e features& the )1D teams will focus on latest technologies using 2AD72AM tools to roll out new models that will meet the needs of M(;Bs di"erse customers in the future#

The reasons as to =hy it can be good ;or R>+ is that:=irstly the cost in"ol"ed in )1D and infrastructure is low in India as compared to other countries# Also the technical skills are abundantly a"ailableC again at a cheaper cost# !econdly& India is growing as an e$port hub along with the Indian market growing aggressi"ely into becoming an attracti"e one for in"estors# %hirdly& !u>ukiBs in"estment in India& is also important as it has completely di"ested now as a result M(; will now become a 4--A subsidiary of !u>uki in the coming year#

5$% )UCC$)) FACT&R) ?@<The 0uality Ad8antage

Maruti !u>uki owners e$perience fewer problems with their "ehicles than any other car manufacturer in India <?#D# 3ower IO! !tudy /--,)# %he Alto was chosen *o#4 in the premium compact car segment and the Esteem in the entry le"el mid 7 si>e car segment across + parameters#

?A<A 4uying $BCerience 'ike "o &ther

Maruti !u>uki has a sales network of '-5 state7of 7the7art showrooms across 4:+ cities& with a workforce of o"er 8--- trained sales personnel to guide M(; customers in finding the right car#

?D<0uality )er8ice Across @ DE Cities

In the ?#D# 3ower 2!I !tudy /--,& Maruti !u>uki scored the highest across all 5 parametersF least problems e$perienced with "ehicle ser"iced& highest ser"ice uality& best in7ser"ice e$perience& best ser"ice deli"ery& best ser"ice ad"isor e$perience& most user7friendly ser"ice and best ser"ice initiation e$perience# +/A of Maruti !u>uki owners feel that work gets done right the first time during ser"ice# %he ?#D# 3ower 2!I study /--, also re"eals that +5A of Maruti !u>uki owners would probably recommend the same

make of "ehicle& while +-A owners would probably repurchase the same make of "ehicle#

?3<&ne )toC )hoC

At Maruti !u>uki& customers will find all car related needs met under one roof# Hhether it is easy finance& insurance& fleet management ser"ices& e$change7 Maruti !u>uki is set to pro"ide a single7window solution for all car related needs#

?F< The 'o= Cost Maintenance Ad8antage

%he ac uisition cost is unfortunately not the only cost customers face when buying a car# Although a car may be affordable to buy& it may not necessarily be affordable to maintain& as some of its regularly used spare parts may be priced uite steeply# *ot so in the case of a Maruti !u>uki# It is in the economy segment that the affordability of spares is most competiti"e& and it is here where Maruti !u>uki shines#

?E<'o=est Cost o; &=nershiC

%he highest satisfaction ratings with regard to cost of ownership among all models are all Maruti !u>uki "ehiclesF Ken& Hagon )& Esteem& Maruti :--& Alto and 9mni#

?G< Technological Ad8antage

It has introduced the superior 48 S , 0ypertech engines across the entire Maruti !u>uki range# %his new technology harnesses the power of a brainy 487bit computer to a fuel7efficient ,7"al"e engine to create optimum engine deli"ery# %his means e"ery Maruti !u>uki owner gets the ideal combination of power and performance from his car#

C&M*$TITIV$ F&RC$) I" I"+IA" *A))$"#$R CAR MAR5$T

2ritical Issues and =uture %rends %he critical issue facing the Indian passenger car industry is the attainment of breake"en "olumes# %his is related to the uantum of in"estments made by the players in capacity creation and the selling price of the car# %he amount of in"estment in capacities by passenger car manufacturers in turn depends on the production
T-rea. from .-e ne/ player'0 In1rea'in2

TUMost of the major global players are present in the Indian marketC few more are e$pected to enter# TU=inancial strength assumes importance as high are re uired for building capacity and maintaining ade uacy of working capital# TUAccess to distribution network is important# TU;ower tariffs in post H%9 may e$pose Indian companies to threat of imports#
Ri3alry /i.-in .-e in45'.ry0 Hi2 %here is keen competition in select segments# <compact and mid si>e segments)#

TU*ew multinational
Mar6e. '.ren2.- of '5pplier'0 Lo/

TUA large number of automoti"e components suppliers# TUAutomoti"e players are rationali>ing their "endor base to
Mar6e. '.ren2.- of 1on'5mer'0 In1rea'in2

TUIncreased awareness among consumers has increased e$pectations# %hus the ability to inno"ate is critical# TU3roduct differentiation "ia new features& impro"ed performance and after sales support is critical# TUIncreased competiti"e intensity has limited the pricing power of
T-rea. from '57'.i.5.e'0 Lo/ .o me4i5m

TUHith consumer preferences changing& inter product substitution is taking place <Mini cars are being replaced)

Marketing strategies of the car manufacturers# !etting up integrated manufacturing facilities may re uire higher capital in"estments than establishing assembly facilities for semi knocked down kits or complete knocked down kits# In recent years& e"en though the ratio of sales to capacity <an important indicator of the ability to reach break7e"en "olumes) of the domestic car manufacturers ha"e impro"ed& it is still low for uite a few car manufacturers in India# India is also likely to increasingly ser"e as the sourcing base for global automoti"e companies& and automoti"e e$ports are likely to gain increasing importance o"er the medium term# 0owe"er& the growth rates are likely to "ary across segments# Although the Mini segment is e$pected to sustain "olumes& it is likely to continue losing market shareC growth in the medium term is e$pected to be led largely by the 2ompact and Mid7range segments# Additionally& in terms of engine capacity& the Indian passenger car market is mo"ing towards cars of higher capacity# %his apart& competition is likely to intensify in the !(@ segment in India following the launch of new models at competiti"e prices#

Maruti !u>uki is one of IndiaJs leading automobile manufacturers and the market leader in the car segment& both in terms of "olume of "ehicles sold and re"enue earned# (ntil recently& 4:#/:A of the company was owned by the Indian go"ernment& and .,#/A by !u>uki of ?apan# %he Indian go"ernment held an initial public offering of /.A of the company in ?une /--'# As of May 4-& /--5& Go"t# of India sold its complete share to Indian financial institutions# Hith this& Go"t# of India no longer has stake in Maruti (dyog# Maruti (dyog ;imited <M(;) was established in =ebruary 4+:4& though the actual production commenced in 4+:' with the Maruti :--& based on the !u>uki Alto kei car which at the time was the only modern car a"ailable in India& itsJ only competitors7 the 0industan Ambassador and 3remier 3admini were both around /. years out of date at that point# %hrough /--,& Maruti has produced o"er . Million "ehicles# MarutiBs are sold in India and "arious se"eral other countries& depending upon e$port orders# Models similar to MarutiBs <but not manufactured by Maruti (dyog) are sold by !u>uki and manufactured in 3akistan and other !outh Asian countries# %he company annually e$ports more than .-&--- cars and has an e$tremely large domestic market in India selling o"er 5'-&--- cars annually# Maruti :--& till /--,& was the IndiaJs largest selling compact car e"er since it was launched in 4+:'# More than a million units of this car ha"e been sold worldwide so far# 2urrently& Maruti Alto tops the sales charts and Maruti !wift is the largest selling in A/ segment# Due to the large number of Maruti :--s sold in the Indian market& the term IMarutiI is commonly used to refer to this compact car model# %ill recently the term IMarutiI& in popular Indian culture& was associated to the Maruti :-- model# Maruti !u>uki India ;imited& a subsidiary of !u>uki Motor 2orporation of ?apan& has been the leader of the Indian car market for o"er two decades# Its manufacturing facilities are located at two facilities Gurgaon and Manesar south of *ew Delhi# MarutiBs Gurgaon facility has an installed capacity of '.-&--- units per annum# %he Manesar facilities& launched in =ebruary /--5 comprise a "ehicle assembly plant with a capacity of

4--&--- units per year and a Diesel Engine plant with an annual capacity of 4--&--- engines and transmissions# Manesar and Gurgaon facilities ha"e a combined capability to produce o"er 5--&--- units annually# More than half the cars sold in India are Maruti cars# %he company is a subsidiary of !u>uki Motor 2orporation& ?apan& which owns .,#/ per cent of Maruti# %he rest is owned by the public and financial institutions# It is listed on the Bombay !tock E$change and *ational !tock E$change in India# During /--57-:& Maruti !u>uki sold 58,&:,/ cars& of which .'&-/, were e$ported# In all& o"er si$ million Maruti cars are on Indian roads since the first car was rolled out on December 4,& 4+:'# Maruti !u>uki offers 4. models& Maruti :--& 9mni& Esteem& Baleno& Alto& @ersa& )it>& Gypsy& A !tar& Hagon )& Ken Estilo& !wift& !wift D>ire& !N,& and Grand @itara# !wift& !wift d>ire& A star and !N, are maufactured in Manesar& Grand @itara is imported from ?apan as a completely built unit <2B()& remaining all models are manufactured in Maruti !u>ukiJs Gurgaon 3lant# !u>uki Motor 2orporation& the parent company& is a global leader in mini and compact cars for three decades# !u>ukiBs technical superiority lies in its ability to pack power and performance into a compact& lightweight engine that is clean and fuel efficient# Maruti is clearly an employer of choice for automoti"e engineers and young managers from across the country# *early 5.&--- people are employed directly by Maruti and its partners# %he company "ouches for customer satisfaction# =or its sincere efforts it has been rated <by customers) first in customer satisfaction among all car makers in India for nine years in a row in annual sur"ey by ? D 3ower Asia 3acific# Maruti !u>uki was born as a go"ernment company& with !u>uki as a minor partner to make a peopleJs car for middle class India# 9"er the years& the product range has widened& ownership has changed hands and the customer has e"ol"ed# Hhat remains unchanged& then and now& is MarutiBs mission to motorise India#

3ressure started mounting on Indira and !anjay Gandhi to share the details of the progress on the Maruti 3roject# !ince countryJs resources were made a"ailable by mother to her sonJs pet project# A delegation of Indian technocrats was assigned to hunt a collaborator for the project# Initial rounds of discussion were held with the giants of the automobile industry in ?apan including %oyota& *issan and 0onda# !u>uki Motor 2orporation was at that time a small player in the four wheeler automobile sector and had major share in the two wheeler segment# !u>ukiJs bid was considered negligible# In the initial rounds of discussion the giants had their bosses present and in the later rounds related to the technical discussions e$ecuti"es of these automobile giants were present# 9samu !u>uki& 2hairman and 2E9 of the company ensured that he was present in all the rounds of discussion# 9samu in an article writes that it subtly massaged their <Indian delegation) egos and also con"inced them about the sincerity of !u>ukiJs bid# In the initial days !u>uki took all steps to ensure the go"ernment about its sincerity on the project# !u>uki in return recei"ed a lot of help from the go"ernment in such matters as import clearances for manufacturing e uipment <against the wishes of the Indian machine tool industry then and its own socialistic ideology)& land purchase at go"ernment prices for setting up the factory Gurgaon and reduced or remo"al of e$cise tariffs# %his helped !u>uki conscientiously nurse Maruti through its infancy to become one of its flagship @ento# %hey intend to continue to focus on the small car segment& while offering products in most segments of the Indian passenger car market# %hey aim to achie"e their principal objecti"es by pursuing the following business strategiesF Maintain and enhance their product rangeF %hey intend to utili>e !u>ukiBs e$pertise in small car technology to produce new "ariants of their e$isting models and to upgrade their products with contemporary technology and features# Increase reach and penetrationF %hey plan to continue to utili>e their e$tensi"e sales and ser"ice network to increase the reach& in terms of geographical spread& and penetration& in terms of sales "olumes& of their products across India#

Increased a"ailability of automobile financeF %hey continue to seek opportunities to e$pand the si>e of the Indian passenger car market& especially in the small car segment& through facilitating easy a"ailability of automobile finance# %o that end& they ha"e recently entered into an agreement with the !tate Bank of India# !ecure repeat purchases by offering a '8- degree customer e$perienceF 9n the basis of their belief that securing repeat purchases from an e$isting customer re uires less e$penditure than ac uiring a new customer& they aim to pro"ide customers with a one7stop shop for automobiles and automobile7related products and ser"ices# 2ontinue to benchmark their manufacturing capabilitiesF %hey plan to continue to benchmark our manufacturing capabilities with the most efficient car manufacturing facilities of !u>uki and its subsidiaries# 2ontinue to reduce costs to offer more competiti"e productsF 2ost competiti"eness has been& and continues to be& central to their strategy as the leading manufacturer in the small car segment to e$pand the si>e of the market by offering competiti"ely priced& high uality products# %he components of this strategy areF 0igher le"els of locali>ation @endor participation in cost reduction 2ost reduction on warranties )eduction in initial in"estment cost )eduction in number of "ehicle platforms Achie"e further cost reduction through higher producti"ity ;ower cost of ownershipF %hrough their business strategies& they seek to reduce the consumerBs cost of ownership of their cars& which comprises the cost of purchase& the cost of fuel and maintenance&including spare parts and repairs& during the life of the "ehicle& insurance& and resale "alue#

"$W I"ITIATIV$) I" MARUTI )U,U5I 'IMIT$+

?one stoC shoC to 9eet all your needs<
In an effort to become a complete car company& Maruti has entered the car insurance business as well# It offers the customer all the ad"antages of settling insurance claims directly with any of the companyBs authori>ed dealers# %his business pro"ides complete fleet solutions to corporate and institutions# Branded Maruti */*& this ser"ice includes the followingF customi>ed car policies& economical car leasing& maintenance& ser"icing& registration& insurance& emergency assistance& accident management and e"entual re7sale of cars# MA)(%I =I*A*2E Maruti =inance offers the best finance packages to consumers across the entire Maruti range# %he ser"ice is being e$tended across the country in a phased manner# MA)(%I GE*(I*E A22E!!9)IE! A single point of contact& 0assle7free transactions& Emergency Assistance &@irtually 2ashless )epairs 3ost accident repairs and insurance support at any dealer workshop# MA)(%I %)(E @A;(E Maruti has taken its first steps in the pre7owned car business under the brand name of Maruti %rue @alue# (sing their technological e$pertise& network support and the e$perience they ha"e gained in the last 4: years& the company ensures the customers gets great "alue and completes the transaction >ero hassles#

E@TENDED >ARRANTY
, years or :-&--- kms 2an bought anytime during primary warranty& best at time of purchase# A*M%IME MA)(%I Maruti !u>uki has also set up state7of7the7art call centers <operational in Delhi& Gurgaon& Mumbai& 2hennai& Bangalore and 0yderabad) Branded Anytime Maruti& this /, hour help7line clarifies all doubts and ueries regarding !u>uki any time of the day or night#

'IMITATI&")
aH +ue to ti9e and 9oney constraint/ study =as restricted to =eb onlyH bH +ata collection 9ethod =as secondary and =eb based only cH Co9Cany don(t =ant to disclose their core strategies dH )econdary data is not su;;icient to ;ind out the o8erall Clan and 9arketing strategies o; any o; the co9Cany

C&"C'U)I&"
%he price of a car is just one7third of what it cost you o"er its lifetime# )unning and maintaining it make up the other two7thirds# %ake into account resale "alue and its real cost becomes clear# Maruti !u>uki stands for "alue as much as it stands for performance# In spite of rising input costs& we try our best to keep prices down# %heir running costs and resale "alues are unbeatable too# *othing matches the delight their cars deli"er# In the ?D 3ower 2!I study /--.& :.A of Maruti !u>uki owners stated that they would definitely recommend the car they dri"e to someone else# In fact& you donBt buy a Maruti !u>uki# Mou in"est in it# After the rash of new cars launches the past two years& the relati"e lull in the auto industry is showing up in the customer satisfaction indices# According to the /--. four7wheeler %otal 2ustomer !atisfaction <%2!) study conducted by the specialist di"ision of %*! Automoti"e& the automobile ownership e$perience or customer ownership e$perience has declined in all areas compared to /--,# %he study is one of the largest syndicated automoti"e studies in India&

representing the responses of more than 5&--- new car buyers# %he comprehensi"e study co"ers o"er .- models with customer e"aluations taken in the key areas of sales satisfaction& product uality& "ehicle performance and design& after7sales ser"ice& brand image& and cost7of ownership# %he %2! inde$ score pro"ides a measure of satisfaction and loyalty a gi"en model enjoys with its customers# According to %*! Automoti"e& the decline is predominantly for older& small and entry mid7si>e car models# %he ageing of these models seems to be posing a stiffer challenge for manufacturers to sustain past performance le"els at a time when customer e$pectations are rising sharply#

R$C&MM$"+ATI&" A"+ )U##$)TI&"

Great opportunities to go global with success of !wift and !N, all o"er# Introduction of more diesel models# %he diesel car segment is growing# 9pportunity to grow bigger by entering into bigger car markets# Already a market leader so great opportunity to be the king of market in e"ery stage of industry

4I4'I&#RA*!%
BOO!S S$%&$'(i) &*&('+'*$ &*, B-.i*'.. P/0i)1 21 T3/+&. L. 43''0'* 5. D&6i, H-*('% 7%i.3 R&*(&%&8&* NEWS PAPERS THE ECONO "C T" ES THE T" ES O! "ND"A MA"A*INES B9S"NESS "ND"A "ND"A TODA: INTERNET WEBSITES ;;;..)%i2,.)/+ ;;;.(//(0'.)/+ ;;;.+&%-$i .-<-=i .)/+