Maruti Udyog Limited

Maruti Suzuki India Limited , commonly referred to as Maruti, is

a subsidiary company of JapaneseautomakerSuzuki Motor
Corporation.It has a market share of 44.9% of the
Indianpassenger car market as of March 2011. Maruti Suzuki
offers a complete range of cars fromentry levelMaruti
800andAlto,to hatchback Ritz,A-Star,Swift,Wagon-
R,EstilloandsedansDZire,SX4,in the 'C' segmentMaruti
Eeco,Multi Purpose vehicleErtigaand SportsUtility vehicleGrand
Vitara. It was the first company in India to mass-produce and
sell more than a million cars. It is largelycredited for having
brought in an automobile revolution to India. It is the market
leader in India,and on 17 September 2007, Maruti Udyog
Limited was renamed as Maruti Suzuki India Limited.The
company's headquarters are on Nelson Mandella Rd,New
Delhi.In February 2012, thecompany sold its 10th million
vehicle in India.

The old logo of Maruti Suzuki India Limited. Later the logo of
Suzuki Motor Corp. was alsoadded to it 'ToMunsiyarion
aMaruti 800',UttarakhandHimalayasMaruti Suzuki is India
and Nepal's leading automobile manufacturer and the market
leader in thecar segment, both in terms of volume of vehicles
sold and revenue earned. Until recently,18.28% of the company
was owned by theIndian government,and 54.2%
bySuzukiof Japan. The BJP-led government held aninitial
public offeringof 25% of the company in June 2003. Asof 10
May 2007, the government of India sold its complete share to
Indian financial institutionsand no longer has any stake in
Maruti Udyog.Maruti Udyog Limited (MUL) was established in
February 1981, though the actual productioncommenced in
1983 with the Maruti 800, based on theSuzuki Altokei
carwhich at the time wasthe only modern car available in India,
its only competitors- theHindustanAmbassadorandPremier
Padminiwere both around 25 years out of date at that point.
Through2004, Maruti Suzuki has produced over 5 Million
vehicles. Maruti Suzukis are sold in India andvarious several
other countries, depending upon export orders. Models similar
to Maruti Suzukis(but not manufactured by Maruti Udyog) are
sold bySuzuki Motor Corporationandmanufactured
inPakistanand otherSouth Asiancountry.The company exports
more than 50,000 cars annually and has an extremely large
domesticmarket in India selling over 730,000 cars
annually.Maruti 800,till 2004, was the India's largestselling
compact car ever since it was launched in 1983. More than a
million units of this car havebeen sold worldwide so far.
Currently,Maruti Suzuki Altotops the sales charts but
MarutiSuzuki's Swift has taken over this titles by 19000 models
in April 2012.The company imports iesel engines for all maruti
Suzuki cars from the fiat motors the great Italian
company.TheGerman car company Volkswagen has a 19.9%
non-controlling shareholding in Suzuki MotorCorporation
Joint ventures
Relationship between the Government of India,under
theUnited Front (India)coalitionandSuzuki Motor
Corporationover thejoint venturewas a point of heated debate
in the Indianmedia till Suzuki Motor Corporation gained the
controlling stake. This highly profitable jointventure that had a
near monopolistic trade in the Indianautomobilemarketand the
nature of thepartnership built up till then was the underlying
reason for most issues. The success of the jointventure led
Suzuki to increase its equity from 26% to 40% in 1987, and
further to 50% in 1992.In 1982 both the venture partners had
entered into an agreement to nominate their candidate forthe
post of Managing Director and every Managing Director will
have a tenure of five yearsR.C. Bhargava was the initial
managing director of the company since the inception of the
jointventure. Till today he is regarded as instrumental for the
success of Maruti Suzuki. Joining in1982 he held several key
positions in the company before heading the company as
ManagingDirector. Currently he is on the Board of Directors.
After completing his five year tenure, Mr.Bhargava later
assumed the office of Part-Time Chairman. The Government
nominated Mr.S.S.L.N. Bhaskarudu as the Managing Director on
27 August 1997. Mr. Bhaskarudu had joinedMaruti Suzuki in
1983 after spending 21 years in the Public sector undertaking
Bharat HeavyElectricals Limited as General Manager. In 1987 he
was promoted as Chief General Manager. In1988 he was
named Director, Productions and Projects. The next year (1989)
he was namedDirector of Material and in 1993 he became Joint
Managing Director.Suzuki Motor Corporationdidn't attend the
Annual General Meeting of the Board with thereason of it being
called on a short notice. Later Suzuki Motor Corporation went
on record tostate that Bhaskarudu was "incompetent" and
wanted someone else. However, the Ministry
of Industries,Governmentof India refuted the charges. Media
stated from the Maruti Suzukisources that Bhaskarudu was
interested toindigenisemost of components for the
modelsincluding gear boxes especially forMaruti 800.Suzuki
also felt that Bhaskarudu was a proxy forthe Government and
would not let it increase its stake in the venture. If Maruti
Suzuki wouldhave been able to indigenise gear boxes then
Maruti Suzuki would have been able tomanufacture all the
models without the technical assistance from Suzuki. Till today
the issue of localization of gear boxes is highlighted in the press

Relations
Since its founding in 1983, Maruti Udyog Limited experienced
few problems with its labourforce. TheIndian labourit hired
readily accepted Japanese work culture and the
modernmanufacturing process. In 1997, there was a change in
ownership, and Maruti becamepredominantly government
controlled. Shortly thereafter, conflict between theUnited
FrontGovernmentand Suzuki started. Labour unrest started
under management of Indian centralgovernment. In 2000, a
major industrial relations issue began and employees of Maruti
went onan indefinite strike, demanding among other things,
major revisions to their wages, incentivesand
pensions.Employees usedslowdownin October 2000, to press a
revision to their incentive-linked pay. Inparallel, after elections
and a new central government led byNDA alliance,India
pursued adisinvestments policy. Along with many other
government owned companies, the newadministration
proposed to sell part of its stake in Maruti Suzuki in a public
offering. Theworker's union opposed this sell-off plan on the
grounds that the company will lose a majorbusiness advantage
of being subsidised by the Government, and the union has
better protectionwhile the company remains in control of the
government.The standoff between the union and
themanagement continued through 2001. The management
refused union demands citing increasedcompetition and lower
margins. The central government prevailed and privatized
Maruti in 2002.Suzuki became the majority owner of Maruti
Udyog Limited.
Hurdles
On 24 February 2010, Maruti Suzuki India announced recalling
of 100,000 A-Star hatchbacks tofix a fuel leakage problem. the
company will replace the gaskets for all 100,000 A-Star
cars.Maruti Exports Limited is the subsidiary of Maruti Suzuki
with its major focus on exports and itdoes not operate in the
domestic Indian market. The first commercial consignment of
480 carswere sent toHungary.By sending a consignment of 571
cars to the same country Maruti Suzukicrossed the benchmark
of 300,000 cars. Since its inception export was one of the
aspectsgovernment was keen to encourage.s
]
Every political party expected Maruti Suzuki to earnforeign
currency. Angola, Benin, Djibouti, Ethiopia, Europe, Kenya,
Morocco, Nepal, Sri Lanka,Uganda, Chile, Guatemala, Costa
Rica and El Salvador are some of the markets served by
MarutiExports.The Brand Trust Reportpublished by Trust
Research Advisory has ranked Maruti Suzuki in theseventh
position in 2011 and the sixth position in 2012 among the
brands researched in India.Bluebytes Newsa news research
agency, rated Maruti Suzuki as India's Most Reputed Car

Company in their Reputation Benchmark Study

]
conducted for the Auto (Cars) Sector whichlaunched in April
2012.
Synopsis
The case attempts to analyse the industry from the view point
of Maruti Udyog Limited whichhas been the leading player in
India for the last two decades.Over the years,although
thecompany has managed to maintain its numero uno position,
it has constantly faced the challengeof decreasing market share
from 80%in the 1990s to around 51% by the end of the financial
year2007. The rating for the company about its quality of
products and services has gone into a tailspin.The company
started by carving out a niche for itself by being a cost leader. It
followed a
‘value
-for-
money’ pricing strategy. This it was able to achieve through the
indigenization of its
vehicles and a strong supplier as well as distribution network.
New players in the market likeHyundai India Limited and Tata
Motors decided to tap the sentiments of customers
whoperceived cars as something more than a more than a
mode of transport. Maruti Suzuki has triedto meet competition
by coming out with utility variants like Omni,Gypsy etc.and
upgradedversions such as Zen,Alto etc. but it has managed to
change the mind set of the people who stillperceive MUL to be
a mass-based car manufacturer. That MUL has not been able to
meet thepeople expectations is evident from its decreasing
market share.The biggest dilemma before
MUL’s management is to whether change its corporate profile
or further strengthen its core
competency of low cost manufacturing through improved
productivity, economies of scalefocused value analysis and
value engineering efforts, leaner operations and tighter
inventorycontrols. Aprecedent has already been set with the
announcement of the Rs.1 lakh car by TataMotors which has re-
define the small car market. sin the market.In order to maintain
acompetitive edge in the market,Maruti should continue to
nurture and strengthen its relationshipwith its dealers. The
oeners of Maruti cars enjoy the privilege of easy availability of
spares andaccessories and a wide network of authorized
service

Segmentation, targeting, positioning in the Marketing strategy

of Maruti Suzuki

Having the wide range of models in almost every segment of

the automobile market. Maruti Suzuki offers 16 brands and 150
variants spanning across all segments consisting of Maruti 800,
Maruti Zen EstiloMaruti Omni, Maruti Alto, Maruti Versa,
Maruti Gypsy, Maruti A Star, Maruti Wagon R, Maruti Swift,
Maruti SX4, Maruti Kizashi, Maruti Eeco, Maruti Ertiga, Maruti
Grand Vitara. Thus serving the diverse range of
customers. Brand product strategy focuses on catering to
the needs of almost all the segments from the middle class to
high class.
With cars in the economy segment, mid-range segment luxury
and super premium segment Target group for the brand
includes anyone above 4 Lakh p.a. salary, peoplelooking to
switch from 2-wheeler to 4-wheeler, millennials employed as
professionals and managers. The middle class, Upper middle
class, High class, and Affluent class the age bracket of 21-65
years comprises of its target group.
MSI positions all its16 brands in almost as many ways to serve
different wants and desires of consumers such as:
Alto– Let’s go- Positioned as India’s most fuel efficient car
which can be afforded by lower income groups as well.
Wagon R– Inspired Engineering- Positioned as a brand which
goes well with people who want to lead economic and
interesting lifestyle, reflect confidence and have the
multifaceted personality.
Swift– You’re the fuel– Positioned as the car with style, modern
looks, and young attitude.
Swift Dzire– The heart car- Positioned as an entry-level sedan
for the aspirational class.
SX4– Men are Back– Positioned as the powerful car for men.
Ertiga– “A Feeling called LUV” – Life Utility Vehicle– Positioned
as a compact seven-seater, one which will have a small
footprint and a tight turning radius.

Marketing mix of Maruti Suzuki

Maruti Suzuki is a subsidiary of a Japanese manufacturing

company Suzuki. This Public Ltd Company, also known as
Maruti, deals in the manufacturing of Automobiles. It was
founded in the year 1981 and has its headquarters in New
Delhi. In the year 2012, February the ten
millionth automobile of the company was sold in India. Its chief
competitor are as follows-
 Tata Motors
 Ford motors
 Hyundai

Product in the Marketing mix of Maruti Suzuki

Maruti Suzuki occupies 37% share in the Indian market of
passenger cars. It manufactures various types of cars and sells
them in the market. Its various cars are-
 Alto
  A-Star
 Ritz
 Swift
 Celerio
 WagonR
 DZire
 Zen
 Sx4
 Kizashi
 Omni
 Eeco
 Ertiga
 Grand Vitara
One of the key features of products of Maruti Suzuki is that
these products are made keeping the common man in mind.
None of the products are high in price, and neither they have
features which make them pricey. However, the products are
known for their durability, service, pick up, car design and most
things which you expect from a basic car.
The tertiary product of Maruti company is its service. Besides
its products, Maruti also provides services such as an on road
service by its vehicle that is operated for emergencies round
the clock. The company has also opened a call center specially
to provide services to its internal members and the customers.
Information centers for the customers are open in cities like
Bangalore, Hyderabad, and Chennai.
Another service product is annual maintenance contracts as
well as service centers which offer services to Maruti cars.
Maruti service centers are present across the country and they
have the highest number of service centers in India. This makes
a huge difference in decision making when you are not in an
urban area.

SWOT analysis of Maruti Suzuki

Maruti Suzuki is the market leader in India and has an
amazing brand equity. Maruti is known for the service it
provides and is synonymous with Maruti 800 – the longest
running small car in India. Here is a SWOT of maruti suzuki, its
strengths, weaknesses, opportunities and threats.

Strengths in the SWOT analysis of Maruti Suzuki

 Maruti Udyog limited (MUL) is in a leadership position in
the market with a market share of 48.74
 Major strength of MUL is having largest network
of dealers and after sales service centers in the country.
  Good promotional strategy is adopted by MUL to transfer
its thoughts to the people about its products.
 Maruti Suzuki recorded highest number of domestic sales
with 9,66,447 units from 7,65,533 units in the previous
fiscal. It recently attained the 10million domestic sales
mark.
 Strong Brand Value and Loyal Customer Base are big
strengths for MUL
 There are around 15 vehicles in Maruti Product portfolio.
Has good product lines with good fuel efficiency like
Maruti Swift, Diesel, Alto etc
 Alto still beats the small car segment with highest number
of sales
 MUL is the first automobile company to start second hand
vehicle sales through its True-value entity.
 MUL has good market share and hence it’s after sales
service is a major revenue contributor.
Weaknesses in the SWOT analysis of Maruti Suzuki
 Low interior quality inside the cars when compared to
quality players like Hyundai and other new foreign players
like Volkswagen,Nissan etc.
 Government intervention due to having share in MUL.
 Younger generations started getting a
great affinity towards new foreign brands
  The management and the company’s labor unions are not
in good terms. The recent strikes of the employees have
slowed down production and in turn affecting sales.
 Maruti hasn’t proved itself in SUV segment like other
players.
Opportunities in the SWOT analysis of Maruti Suzuki
 MUL has launched its LPG version of Wagon R and it was a
good move simultaneously
 MUL can start R&D on electric cars for a much
better substitute of the fuel.
 Maruti’s cervo 600 has a huge potential in tapping the
middle class segment and act as a strong threat to Nano
 New DZire from Maruti will capture the market share and
expected to create the same magic as Maruti
Esteem(currently not available)
 Export capacity of the company is giving new hopes in
American and UK markets
 Economic growth of the country is constantly increasing
and the government is working hard to increase the gdp to
double digit.
Threats in the SWOT analysis of Maruti Suzuki
 MUL recently faced a decline in market share from its
50.09% to 48.09 % in the previous year(2011)
 Major players like Maruti Suzuki, Hyundai, Tata has lost its
market share due to many small players like Volkswagen-
polo. Ford has shown a considerable increase in market
share due to its Figo.
 Tata Motors recent launches like Nano 2012, Indigo e-cs
are imposing major threats to its respective competitor’s
segment
 China may give a good competition as they are
also planning to enter into Indian car segment
 Launch of Hyundai’s H800 may result in the decline of Alto
sales