GENERAL INFORMATION OF MARUTI SUZUKI

Maruti Suzuki India Limited commonly referred to as

Maruti and formerly known as Maruti Udyog Limited is an automobile
manufacturer in India. It is subsidiary of Japanese automobile and
Motorcycle manufacturer Suzuki. As of November 2012, it had a market share
of the company are better than to other motter company of the Indian passenger
car market. Maruti Suzuki manufactures and sells a complete range of cars from
the entry level Alto, to the hatchback Ritz, Celerio, A-Star, Swift, Wagoner, Zen
and sedans DZire, Kizashi and SX4, in the other car are segment Eeco, Omni,
Maruti Suzuki Purpose vehicle Suzuki Ertiga and Sports Utility vehicle Grand
Vitara.
The company's headquarters are at
Nelson Mandela Road, New Delhi.

In the February 2012, the company sold its ten millionth vehicles in India.
History Logo of Maruti Udyog
Maruti Udyog Limited was established in February 1981, though the actual
production commenced only in 1983. It started with Maruti 800, based on the
Suzuki Alto car which at the time was the only modern car available in India. Its
only competitors were Hindustan Ambassador and Premier Padmini.
Originally, 74% of the company was owned by the Indian
government, and 26% by Suzuki of Japan. As of May 2007, the government of
India sold its complete share to Indian financial institutions and no longer has
any stake in Maruti Udyog.
Chronology Beginnings Maruti's history begins in 1970,
when a private limited company named 'Maruti technical services private
limited' (MTSPL) is launched on November 16, 1970. The stated purpose of this
company was to provide technical know-how for the design, manufacture and
assembly of "a wholly indigenous motor car". In June 1971, a company called
'Maruti limited' was incorporated under the Companies Act and Sanjay Gandhi
became its first managing director. "Maruti Limited" goes into liquidation in
1

1977. On 23 June 1980 Sanjay Gandhi dies when a private test plane he was
flying crashes behest of Indira Gandhi, the Indian Central Suzuki enters In
1982, a license & Joint Venture Agreement (JVA) is signed between Maruti
Udyog Ltd. and Suzuki of Japan. At first, Maruti Suzuki was mainly an importer
of cars. In India's closed market, Maruti received the right to import 40,000
fully built-up Suzukis in the first two years, and even after that the early goal
was to use only 33% indigenous parts. This upset the local manufacturers
considerably. There were also some concerns that the Indian market was too
small to absorb the comparatively large production planned by Maruti Suzuki,
with the government even considering adjusting the petrol tax and lowering the
excise duty in order to boost OF sales.
Production commences in December 1983. In 1984 the
Maruti Van, with the same three- cylinder engine as the 800, is released.
Installed capacity of the plant in Gurgaon, reaches 40,000 units.
In 1985 the Suzuki SJ410 -based Gypsy, a 970 cc 4WD offroad vehicle, is launched. In 1986 the original 800 is replaced by an all- new
model of the 796 cc hatchback Suzuki Alto/Fronted. This is also when the
100,000th vehicle is produced by the company. In 1987 follows the company's
first export to the West, when a lot of 500 cars were sent to Hungary. Maruti
products had been exported to certain neighboring countries already. By 1988,
the capacity of the Gurgaon plant is increased to 100,000 units per annum.
Market liberalization In 1989 the Maruti 1000 is presented after having been
shown earlier. This 970 cc, car in India
In 1992 Suzuki increases its stake in Maruti to 50 percent, making
the company a 50-50 JV with the Government of India the other stake holder. A
flow of new models begin in the early nineties. In 1993 the Zen, a modern 993
cc, hatchback which is later exported globally as the Suzuki Alto. In 1994 the
1298 cc Esteem appears, a more luxurious redesigned Maruti 1000. This and
other Marut is begin appearing in a plethora of different equipment levels, to
better suit India's increasingly discerning consumers. A Zen Automatic arrives
in 1996, as does the Gypsy King, a 1.3 liter version of the compact off-roader,
and a minibus version of the Omni (the Omni E).
In 1994 Maruti Suzuki produces its 1 millionth vehicle since the
commencement of production, being the first company in India to do so. This is
still not enough in a booming market and the next year Maruti's second plant is
opened, with annual capacity reaching 200,000 units. Maruti also launches a 24hour emergency on-road vehicle service, the first of its kind in the country. In
1996 the United Front government is formed, with Murasoli

Mr. S.S.L.N. Bhaskarudu as the Managing Director, as the then

current Managing director
R.C. Bhargava was completing his tenure. This creates a conflict with Suzuki ,
discussed closer in the Joint venture related issues section.
In 1998 the new Maruti 800 is released, the first change in design
since 1986. This is simply a facelift of the existing model, to ensure steady
sales. Also, the two millionth vehicles are produced. Other news include the Zen
D , a 1527 cc diesel hatchback and Maruti's first diesel vehicle. The Omni van
and microbus is also redesigned. The next year the Omni bus arrives in a high
roof version, the Omni XL. The 1.6 litter Maruti Baleno three-box saloon,
advertised as the 'Maruti Suzuki Baleno', also appears. This is Maruti's biggest
car yet. Finally, in what is a very busy year, the Wagon R is launched. In 2000
Maruti becomes the first car company in India to launch a Call Center for
internal and customer services. The new Alto model is also released, somewhat
larger and more modern than the 800. The estate Baleno Altura is also shown,
while IDTR (Institute of Driving Training and Research) is launched jointly
with the Delhi government to promote safe driving habits.

In 2001 Maruti True Value, selling and buying used Maruti Suzuki, is
launched in Bangalore and Delhi, later in Mumbai and elsewhere. In October of
the same year the Maruti Versa sees the day, a bigger engine and more luxurious
microbus than the Omni. It never catches on in the market and is discontinued
by late 2009, only to be replaced by a cheaper, stripped-down version called
Eeco. Customer information centers are also launched in Hyderabad, Bangalore
and Chennai.
In 2002 the Esteem Diesel appears, as does Maruti
Insurance. Two new subsidiaries are also started: Maruti Insurance Distributor
Services and Maruti Insurance Brokers Limited. Suzuki Motor Corporation
increases its stake in Maruti to 54.2 percent. In 2003 the new Suzuki Grand
Vitara XL-7 appears, while the Zen and the Wagon R are upgraded and
redesigned. The four millionth Maruti vehicles are built and they enter into a
partnership with the State Bank of India. Maruti Udyog Ltd is listed on BSE and
NSE after a public issue, which is oversubscribed tenfold. In 2004 the Alto
becomes India's new
the financial year 2003-04 with an annual sale of 472,122
units, the highest ever since the company began operations 20 years earlier, and
the fiftieth lakh (5 millionth) car rolls out in April, 2005, with overall sales
3

growing by 15.8%. The 1.3 L Suzuki Swift five-door hatchbacks also appear.
2004-05 marked another record year (487,402 domestic sales) and exports
reached 48,899 cars to about fifty different countries. The United Kingdom took
the lion's share, with 10,623 deliveries.
In 2006 Suzuki and Maruti set up another joint venture,
"Maruti Suzuki Automobiles India", to build two new manufacturing plants, one
for vehicles and one for engines. Cleaner cars were also introduced, with
several new models meeting the new Bharat Stage III " standards. In February
2012, Maruti Suzuki sold its ten millionth vehicles in India. For the Month of
July 2014, it has a Market share of

(1.0) EXECUTIVE SUMMARY

Our Financial Analysis project is on Maruti Suzuki Ltd.. Main objective

of this project is to know the financial strengths and weaknesses of Maruti Suzuki Ltd. For that
we had references the one consecutive year annual report from 2014. In addition to these
annual reports of Maruti Suzuki Ltd we had also used various Books and Web based
information to cover the current trends of the company and its competitors, as well as the
whole industry.
To analyze the firm, we have used various calculation based ratios and also
study some other statements like Trends analysis, Cash flow statements, DU-Pont Charts etc.
We found that the Maruti Suzuki Ltd is doing well in general. Most of the
graphs and Ratios are supporting us to say Maruti Suzuki a good company. Maruti Suzuki is
consistently going ahead. Maruti Suzuki has done a good job in the market of detergent and
soaps, but still there is a space for Maruti Suzuki in various other products, and also the
company has to concentrate on spreading its business as well. Though the sales of a company
have decreased, the Net profit is increase slightly. But the decrease in the sales is not a good
sign for company.

(1.1) COMPANY NAME AND ADRESS

1 Corporate Identity Number (CIN) of the Company : L34103DL1981PLC011375

2 Name of the Company :Maruti Suzuki India Limited
3 Registered address :1, Nelson Mandela Marg, Vasant Kunj, New Delhi-110070
4 Website :www.marutisuzuki.com
5 E-mail id: investor@maruti.co.in
6 Financial year reported 2013-14
7 Sector(s) that the Company is engaged in (industrial activity
code-wise):
Automobile
8 List three key products/services that the Company:
manufactures/provides as

Passenger Cars, Maruti Suzuki Utility Vehicles (MUV), Maruti Suzuki-Purpose Vehicles (MPV)
9 Total number of locations where business activity is
undertaken by the Company:
i. Number of international locations Company manufactures cars in India only
ii. Number of national locations Company manufactures cars at its
Gurgaon and Manesar plants located in
Haryana, India
10 Markets served by the Company : Local/State/National/
International
Domestic: across India

(1.2) BRIEF HISTORY AND DESCRIPTION OF

BUSINESS
Originally, 18.28% of the company was owned by the Indian government, and
54.2% by Suzuki of Japan. The BJP-led government held an initial public
offering of 25% of the company in June 2003. As of May 2007, the government
of India sold its complete share to Indian financial institutions and no longer has
any stake in Maruti Udyog.
Maruti Udyog Limited (MARUTI SUZUKI) was established in February
1981, though the actual production commenced in 1983 with the Maruti 800,
based on the Suzuki Alto key car which at the time was the only modern car
available in India, its only competitors - the Hindustan Ambassador and Premier
Padmini - were both around 25 years out of date at that point. Through 2004,
Maruti Suzuki has produced over 5 Million vehicles. Maruti Suzuki are sold in
India and various several other countries, depending upon export orders. Models
similar to those made by Maruti in India, albeit not assembled or fully
manufactured in India or Japan are sold by Pak Suzuki Motors in Pakistan.
The company exports more than 50,000 cars annually and has domestic sales of
730,000 cars annually. Its manufacturing facilities are located at two
facilities Gurgaon and Manesar in Haryana, south of Delhi. Maruti Suzukis
Gurgaon facility has an installed capacity of 900,000 units per annum. The
Manesar facilities, launched in February 2007 comprise a vehicle assembly
plant with a capacity of 550,000 units per year and a Diesel Engine plant with
an annual capacity of 100,000 engines and transmissions. Manesar and Gurgaon
facilities have a combined capability to produce over 14, 50,000 units annually.
About 35% of all cars sold in India are made by Maruti. The company is 54.2%
owned by the Japanese Maruti Suzukitinational Suzuki Motor Corporation per
cent of Maruti Suzuki. The rest is owned by public and financial institutions. It
is listed on the Bombay Stock Exchange and National Stock Exchange of India.
During 2007 and 2008, Maruti Suzuki sold 764,842 cars, of which 53,024 were
exported. In all, over six million Maruti Suzuki cars are on Indian roads since
the first car was rolled out on 14 December 1983. Maruti Suzuki offers 15
models, Maruti
800, Alto, Maruti
Alto
800, WagonR, Estilo, Astar, Ritz, Swift, SwiftDZire, SX4, Omni, Eeco, Gypsy,GrandVitara, Kizashi an
d the newly launched Ertiga. Swift, Swift DZire, A-star and SX4 are
manufactured in Manesar, Grand Vitara and Kizashi are imported from Japan as
completely built units (CBU), all remaining models are manufactured in Maruti
Suzuki's Gurgaon Plant. The company is believed to be moving towards the
introduction of a new version of Maruti 800 by November 2012, which will be
more fuel efficient, though slightly costlier than Alto and existing Maruti 800.
The Suzuki Motor Corporation, Maruti's main stakeholder, has been a global
leader in mini and compact cars for three decades. Suzukis strategy is to utilize
light-weight, compact engines with stronger power, fuel-efficiency and
performance capabilities. Nearly 75,000 people are employed directly by Maruti
Suzuki and its partners. It has been rated first in customer.

Satisfaction among all car makers in India from 1999 to 2009 by J D Power
Asia Pacific. Maruti Suzuki will be introducing new 800 cc model by Diwali in
2012.The model is supposed to be fuel efficient, and therefore more expensive.
With increasing market competition in the small car segment, a new model
along with the upcoming WagonR Stingray will be the key fresh products for
Maruti Suzuki India (MSI) to defend its market share amid the ever increasing
competition.

Beginnings
Maruti's history begins in 1970, when a private limited company named 'Maruti
technical services private limited' (MTSPL) is launched on November 16, 1970.
The stated purpose of this company was to provide technical know-how for the
design, manufacture and assembly of "a wholly indigenous motor car". In June
1971, a company called 'Maruti limited' was incorporated under the Companies
Act and Sanjay Gandhi became its first managing director. After a series of
scandals, "Maruti Limited" goes into liquidation in 1977. This is followed by
a commission of inquiry headed by Justice A. C. Gupta, which submits its report
in 1978. On 23 June 1980 Sanjay Gandhi dies when a private test plane he was
flying crashes. A year after his death, and at the behest of Indira Gandhi, the
Indian Central government salvages Maruti Limited and starts looking for an
active collaborator for a new company: Maruti Udyog Ltd being incorporated in
the same year.

Suzuki enters
In 1982, a license and Joint Venture Agreement (JVA) is signed between Maruti
Udyog Ltd. and Suzuki of Japan. At first, Maruti Suzuki was mainly an importer
of cars. In India's closed market, Maruti received the right to import 40,000
fully built-up Suzukis in the first two years, and even after that the early goal
was to use only 33% indigenous parts. This upset the local manufacturers
considerably. There were also some concerns that the Indian market was too
small to absorb the comparatively large production planned by Maruti Suzuki,
with the government even considering adjusting the petrol tax and lowering the
excise duty in order to boost sales . Finally, in 1983, the Maruti 800 is released.
This 796 cc hatchback is based on the SS80 Suzuki Alto and is Indias first
affordable car. Initial product plan is 40% saloons, and 60% Maruti Van. Local
production commences in December 1983. In 1984 the Maruti Van, with the
same three-cylinder engine as the 800, is released. Installed capacity of the plant
in Gurgaon, reaches 40,000 units.
In 1985 the Suzuki SJ410-based Gypsy, a 970 cc 4WD off-road vehicle, is
launched. In 1986 the original 800 is replaced by an all-new model of the 796 cc
hatchback Suzuki Alto/Fronted. This is also when the 100,000th vehicle is
produced by the company. In 1987 follows the company's first export to the
West, when a lot of 500 cars were sent to Hungary. Maruti products had been
exported to certain neighboring countries already. By 1988, the capacity of the
Gudgeon plant is increased to 100,000 units per annum.

Market liberalization
8

In 1989 the Maruti 1000 is presented after having been shown earlier. This
970 cc, three-box is Indias first contemporary sedan. By 1991 65 percent of the
components, for all vehicles produced, are indigenized. Meanwhile, the
liberalization of the Indian opens new opportunities but also brings more
competition to the segments in which Maruti operates. In 1992 Suzuki increases
its stake in Maruti to 50 percent, making the company a 50-50 JV with the
Government of India the other stake holder.
A flow of new models begin in the early nineties. In 1993 the Zen, a modern
993 cc, hatchback which is later exported globally as the Suzuki Alto. In 1994
the 1298 cc Esteem appears, a more luxurious redesigned Maruti 1000. This and
other Marutis begin appearing in a plethora of different equipment levels, to
better suit India's increasingly discerning consumers. A Zen Automatic arrives
in 1996, as does the Gypsy King, a 1.3 liter version of the compact off-roader,
and a minibus version of the Omni (the Omni E).
In 1994 Maruti Suzuki produces its 1 millionth vehicle since the
commencement of production, being the first company in India to do so. This is
still not enough in a booming market and the next year Maruti's second plant is
opened, with annual capacity reaching 200,000 units. Maruti also launches a 24hour emergency on-road vehicle service, the first of its kind in the country. In
1996 the United Front government is formed, with Murasoli Maran new
Industries Minister. On 27 August the following year the government nominates
Mr. S.S.L.N. Bhaskarudu as the Managing Director, as the then current
Managing director R.C. Bhargava, was completing his tenure. This creates a
conflict with Suzuki, discussed closer in the Joint venture related issues section.
In 1998 the new Maruti 800 is released, the first change in design since 1986.
This is simply a facelift of the existing model, to ensure steady sales. Also, the
two millionth vehicles are produced. Other news includes the Zen D, a 1527 cc
diesel hatchback and Maruti's first diesel vehicle. The Omni van and microbus
is also redesigned. The next year the Omni bus arrives in a high roof version,
the Omni XL. The 1.6 litre Maruti Baleno three-box saloon, advertised as the
'Maruti Suzuki Baleno', also appears. This is Maruti's biggest car yet. Finally, in
what is a very busy year, the Wagon is launched.
Maruti Alto, introduced in 2000
In 2000 Maruti becomes the first car company in India to launch a Call
Center for internal and customer services. The new Alto model is also released,
somewhat larger and more modern than the 800. The estate Baleno Altura is
also shown, while IDTR (Institute of Driving Training and Research) is
launched jointly with the Delhi government to promote safe driving habits. In
2001 Maruti True Value, selling and buying used Maruti Suzuki, is launched in
Bangalore and Delhi, later in Mumbai and elsewhere. In October of the same
year the Maruti Versa sees the day, a bigger engine and more luxurious
microbus than the Omni. It never catches on in the market and is discontinued
by late 2009. Customer information centers are also launched in Hyderabad,
Bangalore and Chennai. In 2002 the Esteem Diesel appears, as does Maruti
Insurance. Two new subsidiaries are also started: Maruti Insurance Distributor

Services and Maruti Insurance Brokers Limited. Suzuki Motor Corporation

increases its stake in Maruti to 54.2 percent.
In 2003 the new Suzuki Grand Vitara XL-7 appears, while the Zen and the
Wagon R are upgraded and redesigned. The four millionth Maruti vehicles are
built and they enter into a partnership with the State Bank of India. Maruti
Udyog Ltd is listed on BSE and NSE after a public issue, which is
oversubscribed tenfold. In 2004 the Alto becomes India's new bestselling car,
overtaking the Maruti 800 which had been number one for nearly two decades.
The five-seater Versa 5-seater, a new variant, is created while the Esteem
undergoes cosmetic changes and is re-launched with a price cut. Maruti Udyog
closed the financial year 2003-04 with an annual sale of 472,122 units, the
highest ever since the company began operations 20 years earlier, and the
fiftieth lake (5 millionths) car rolls out in April, 2005, with overall sales
growing by 15.8%. The 1.3 L Suzuki Swift five-door hatchbacks also appear.
2004-05 marked another record year (487,402 domestic sales) and exports
reached 48,899 cars to about fifty different countries. The United Kingdom took
the lion's share, with 10,623 deliveries.
In 2006 Suzuki and Maruti set up another joint venture, "Maruti Suzuki
Automobiles India", to build two new manufacturing plants, one for vehicles
and one for engines. Cleaner cars were also introduced, with several new
models meeting the new "Bharat Stage III" standards. In February 2012, Maruti
Suzuki sold its ten millionth vehicles in India.

(1.3) BRIEF OVERVIEW OF MARKETS AND TRENDS

The credit for growing the Indian Compact Segment, and in fact, the Indian
Passenger car industry goes partly to the Korean manufacturers (HMIL and the
erstwhile Daewoo) and the Indian player Tata Motors.

10

The HMIL Santro was launched in September1998 and created a sensation on

account of its aggressive pricing at Rs.2, 99,000. The Santro became successful
as HMIL had got the price value equation just right. While Daewoos Maruti
picked up only seven months after its launch, the Santro was selling more than
3000units a month only 2 months after its launch. HMIL had infected, planned
its entry into the Indian market with the 1495cc Accent but later opted in favor
of the smaller car. At the time the Santro was launched, both the options
available in the segment- Fiat Uno and the Zen-had been around in the Indian
Market for quite some time and lacked novelty. Santro was not only cheaper but
also incorporated a Maruti Suzukiti-point fuel injection (MPFI) system that
offered superior fuel economy to Zens carburetor system.
The Maruti was launched in November 1998. Its 800cc engine immediately
encouraged comparisons with Maruti 800. The initial launch price of Maruti at
Rs. 3, 55,000 was significantly higher than the Santros Rs, 2, 99,000. Given
that the Maruti was smaller than the Zen and the Santro, the initial impact was
not so strong. In May 1999, Daewoo launched stripped-down variants. The
launch of the cheaper versions saw the sales of Maruti reaching almost 2000
units in May 1999 and recording an average monthly sale of 3123units in
FY2000. However, the financial crisis faced by the parent, Daewoo Motor
Corporation affected the performance of the Indian subsidiary (that was
reporting net loss and had significant borrowings). Subsequently, the Indian
subsidiary halted production.

MARUTI SUZUKI now has 4 cars in the Compact Segment: the Swift, the Zen,
the Alto and the Wagon R. In terms of market share, Zen steadily lost share in
FY2000 to its competitors. Despite this, there is no denying that the Zen is one
of the bigger success stories in the Indian car market. With 3 models, MARUTI
SUZUKI is the market leader in the Compact segment.

11

The Alto arrived in India when there was little room for man oeuvre in a
crowded compact segment. It was launched in 2 versions, the LX and the VX.
The base version is priced competitively with the deluxe version of the
Maruti800, while the higher-end version competes with the based versions of
the Zen and the Wagon R.
The 1061cc Wagon R is available in four manual transmission variants (LX,
LXi, VX and VXi) and one automatic transmission variant (AX). Since its
introduction in February 2000, Wagon R has been selling in the 1500-3000units
per month range as against 5000-8000units per month range for the Santro. The
presence of the already well-established Maruti and the Santro meant that the
novelty factor did not work too well for Wagon R.
However 2005 has been a revolutionary year for Maruti since its new Launch
Swift has been a huge success in the market and the most demanded car as well.
The other cars in the compact segment to have made an immediate dent in the
market with their launch are the Palio of Fiat India and the improved version
Indica V2 of Tata Motors. Indica was the third largest selling car in FY2002 in
this segment, after Santro and Zen. On the other hand, Palio was launched at the
time when the passenger car industry was witnessing a slump but the model cut
across the barriers and was able to create a market for itself. However, the
success of this model was short-lived and the sales declined thereafter.
Nevertheless, launches of new variants (such as the diesel version) helped sales
recover marginally.

The size of the compact segment has increased as a result of the high growth
rate attained by the models in this segment. The changing price-value equation,
coupled with the declining interest rates and easy availability of finance, has
prompted consumers to move towards the compact car segment from the mini
segment. The high rate of growth achieved by the compact segment has

12

attracted the attention of other players also; including GM. GM has entered the
compact segment with the launch of its Opel Corse Sail in May2003.

(1.4) BRIEF STRATEGY AND KEYS TO SUCCESS

Expertise in small car technology. As a subsidiary of Suzuki, they have
access to globally respected technology in the small car segment. They have the
advantage of Suzukis expertise in all aspects of small car technology and
design, with respect to their products, manufacturing processes and business
practices, the development of their supply chain and the training of personnel.
Extensive product portfolio. Their diverse product range includes cars in
segments A, B and C, and utility vehicles... They are the major manufacturer of
cars in segment a (priced below Rs.300, 000). The Maruti 800 has been the
largest selling car in India for several years, and still continues to have the very
high sales volumes. They also manufacturer three distinct models, the Zen, the
Alto and the Wagon R, in segment B (priced between Rs. 300,000 and
Rs.500,000). Their dominance in segment A and extensive product range in
segment B enables them to offer the customer a wider choice in the small car
segment than any of their competitors. In addition, the absence of any major

13

manufacturers in segment a gives their dealers greater flexibility in promoting

models in segment B.
Quality products. In November 2001, MARUTI SUZUKI was one of the first
automobile manufacturers in the world to receive the ISO 9001:2000
certification. They benchmark their products against international quality
standards. They export their products to approximately 70 countries, which are
manufactured using the same assembly line as that for the domestic market.
Extensive sales and service network MARUTI SUZUKI has the largest
network of dealers and service centers amongst car manufacturers in India In
addition to the distribution of cars, their dealership network is a critical resource
in their efforts to provide customers with a one-stop shop for automobiles and
automobile related products and services such as automobile finance,
automobile insurance, Maruti certified pre-owned cars available for purchase,
and leasing and fleet management, in order to promote customer loyalty.
Brand strength: MARUTI SUZUKI is present in the Indian market
for almost 24 years and have built the brand on the basis of the
values of trust and reliability in 2000, 2001 and 2002; J.D.Power
Asia Pacific, Inc. 19 ranked MARUTI SUZUKI the No. 1 in the
India Customer Satisfaction Index, which assesses customer
satisfaction with product quality and dealer service. NFO
Automotives 2002 Total Customer Satisfaction Survey ranked
Maruti products as No. 1 in the Economy, Premium
Compact and Entry Midsize segments respectively, for 2002.
Integrated manufacturing facility. Their manufacturing facility consists of
fully integrated plants with flexible assembly lines located at Gurgaon. The
facilities have advanced engineering capability and each plant is upgraded on an
ongoing basis to improve productivity and quality. They are one of the most
efficient among the vehicle manufacturing facilities of Suzukis subsidiaries
outside Japan in terms of productivity measured as the ratio of number of
vehicles produced to number of employees.
Strong vendor base and higher rates of localization: In order to improve
quality and generate economies of scale, MARUTI SUZUKI has reduced the
number of vendors of components in India from 370 as of March 31, 2000 to
about 100 as in 2005. As of the same date, they had strategic equity interests
through joint venture agreements in their vendors, who together supply a
substantial portion of the purchases of components. A number of their vendors
are their dedicated suppliers in that they account for a majority of their turnover.
Vendors located within a radius of 100 kilometers from the facilities supply the
majority of the components. The production systems of their vendors are
generally aligned to their needs for a reliable and timely supply of components
that meet the required quality standards. This has enabled MARUTI SUZUKI to
increase the proportion of locally sourced, lower cost components in their
models, a concept refer to as localization.
Skilled labor and experienced management. The labor force at MARUTI
SUZUKI has become increasingly productive in terms of vehicles produced per
employee and receives training on an ongoing basis, including training by
14

Suzuki. Due to their presence in the Indian passenger car market for a
significantly longer period they have been able to build a highly experienced
management team that is familiar with conditions in the Indian passenger car
market

(1.5) CRITICAL RISK AND ASSUMPTION

Maruti has always been identified as a traditional carmaker producing value-formoney cars and right now the biggest hurdle Maruti is facing is to shed this
image. Maruti wants to change it for a more aggressive image. Maruti Baleno
has failed due to one of the major reasons being that customers could not
identify Maruti with a car as sophisticated as Maruti Baleno. Maruti is looking
forward to bring about a perception change about the company and its cars.
Maruti started the exercise with the new-look Zen, and Suzuki's decision to pick
India as one of the first markets for this radically different-looking car gave this
endeavor a new thrust. Maruti has also changed its logo at the front grill. It has
replaced the traditional Maruti logo on grill stylish M with S. The major
thrust in the facelift Endeavour is with the launch of 1.3 litre Swift. Its a style
statement from Maruti to Indian market.
The next threat Maruti faces is the growing competition in compact cars.
Companies like Toyota, Ford, Honda and Fiat are planning to come out with
small segment cars in near future. Ford is launching Focus and Fiesta, GM is
launching Aveo in 2006, Chevrolet is launching Spark in 2006, Hyundai is
launching its new compact car in 2006, Honda is launching Jazz in 2006, GM is
has reduced prices of its Corsa, Fiat is coming up with Panda and new Fiat
Polio, Skoda is launching Fabia. All this will pose a major threat to Maruti
leadership in compact cars.
New emission norms like Bharat Stage 3 which has come into effect from
April 2005 has increased car prices by Rs.20000 and Bharat Stage 4 which is
15

coming into force in 2007 will contribute in increasing car prices further. This
could be of concern to Maruti which is low cost provider of passenger cars.
Rise in petrol prices and growing popularity of other substitute fuels like
CNG will be another threat to Maruti. There is also a threat to Suzuki from
R&D investment by Toyota and Honda in Hybrid cars. Hybrid cars could run on
both petrol and gaseous fuels.
There is a threat to Maruti models ageing. Maruti models like Maruti 800 which
is in market for the last twenty years and others like Zen and Esteem which have
also entered the decline phase are the other threats. Maruti is planning phasing
out Zen in 2007 and there were rumors of phasing out Maruti 800 also. This all
makes Suzuki to replace these brands with new launches. As Swift and Wagon
R are replacing the Zen market. Maruti will have to keep on making
modifications in its present models or its Maruti Suzuki India Ltd - Price
Analysis Snapshot
This Report features up to a ten-year record of the equity Price history for
Maruti Suzuki India Ltd. Tabular results include the High, Low and Closing
price for the quarter. There is also a calculation of percentage change in price
for both Quarterly and Annual periods. Price values are adjusted for stock splits
and dividends.
Maruti Suzuki India Ltd. The Group's principal activity is to manufacture,
purchase and sale of Motor Vehicles and Spare parts. The Group is a subsidiary
of Suzuki Motor
Corporation. 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 Groups operations are in 1200
towns and cities with 2628 workshops and also exports cars to other countries.
Maruti Suzuki India Ltd - Earning & Dividend Analysis Snapshot
This detailed Report provides an Earnings and Dividends history for Maruti
Suzuki India Ltd. Tabular results include up to a ten-year history of "as
reported" Earnings per Share and Dividends per Share plus a calculation of the
amount of earnings paid out over the year in dividends (i.e. Payout Ratio).
Earnings and Dividends are presented on both a Quarterly and Annual basis. An
annual Percent Change factor is calculated for both Earnings and Dividends.
Maruti Suzuki India Ltd. The Group's principal activity is to manufacture,
purchase and sale of Motor Vehicles and Spare parts. The Group is a subsidiary
of Suzuki Motor Corporation. The other activities of the Group comprises of
facilitation of Pre-Owned Car Sales, Fleet Management and Car Financing. The
Group also provides services like framing of customized car policies,
16

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 Groups
operations are in 1200 towns and cities with 2628 workshops and also exports
cars to other countries

(2.0) VISION AND MISSION STATEMENT

Criteria for evaluating vision mission and goals

Criteria

Vision

Mission

objectives

1. Customers

Yes

Yes

No

2. Specification about Product and services

No

Yes

Yes

3. Market

Yes

No

Yes

4. Technology

No

Yes

Yes

and Yes

Yes

Yes

6. Philosophy

No

No

Yes

7. Self concept

Yes

Yes

Yes

5. Concern for
profitability

survival,

growth

17

8. Concern for Public image

No

Yes

No

9. Concern for employee.

No

No

No

MISSION
An Organizations mission is the purpose or reason for the organizations
existence, means, what the company is providing to society. Maruti seeks to
create a more prosperous society through automotive manufacturing
Mission critical attitude and fiscal prudence has been a way of life within
Maruti, good or bad times notwithstanding. And what has fuelled this over the
last 18 months is the Japanese major's 3-G philosophy pushed by Nakanishi,
which he refers to as 'going back to basics'. "Arm chair management doesn't
help," says Nakanishi. Genba (go to actual spot), Genjitsu (see what's
happening) and Gembutsu (identify actual problem) have laid down the
framework for Maruti in its 3-year rolling plan till 2010-11. Marutis
fundamental mission is to contribute to peoples lifestyles, society, and the
economy through automotive manufacturing. In upholding this mission, we
have always focused on the future of the automobile industry when deciding
how best to position our company.
VISION
While the global economy is deep in the recession roil and its tremors being felt
in India, the country's largest automaker seems unfazed, What is helping Maruti
today, is the company's ability to constantly innovate even beyond product ,so
the companys vision is We have to ensure that any disruption in the
environment doesn't jeopardize your market position. If we say this vision in
one line then it is Marutis aims to achieve long-term, stable growth in
harmony with the environment, the global economy, the local communities it
serves, and its Stakeholders.

Objectives

Modernization of the Indian Automobile Industry.

Developing cars faster and selling them for less.

Production of fuel-efficient vehicles to conserve scarce resources.

18

Production of large number of motor vehicles which was necessary for

economic growth.

Market Penetration, Market

Development and diversification.

Partner relationship management, Value chain, Value delivery network.

Development

Similarly

Product

(2.2) WHAT BUSINESS ARE WE IN?

As above said Maruti Suzuki India Limited is not a group so there are no
group companies, but it is owned and controlled by Suzuki Motor
Corporation which owns around 54 percent of total equity shares of the
company.
Maruti Suzuki India Limited has its subsidiary companies. Like: Maruti True
Value, etc.

19

Maruti Suzuki says that we all are group including our Authorized Dealers, Raw
Material Providers, Our Employees, Customers, Competitors and everyone who
is connected with us because without these people we cannot function and
improve our products time to time.

(3.0) COMPANY PRODUCT AND SERVICES

(3.1) PRODUCT AND SERVICES DESCRIPTION
The maruti Suzuki Ltd. is producing following products:

20

21

SERVICES
22

As of 31 March 2014 Maruti Suzuki has 933 dealerships across 666 towns and cities in
all states and union territories of India. It has 3,060 service stations (inclusive of dealer
workshops and Maruti Authorized Service Stations) in 1,454 towns and cities throughout
India. It have 30 Express Service Stations on 30 National Highways across 1,436 cities in
India.
Service is a major revenue generator of the company. Most of the service stations are
managed on franchise basis, where Maruti Suzuki trains the local staff. Other automobile
companies have not been able to match this benchmark set by Maruti Suzuki. The Express
Service stations help many stranded vehicles on the highways by sending across their repair
man to the vehicle.

Maruti Insurance
Launched in 2002 Maruti Suzuki provides vehicle insurance to its customers with the help
of the National Insurance Company, Bajaj Allianz, New India Assurance and Royal
Sundaram. The service was set up the company with the inception of two subsidiaries
Maruti Insurance Distributors Services Pvt. Ltd and Maruti Insurance Brokers Pvt. Limited
This service started as a benefit or value addition to customers and was able to ramp up
easily. By December 2005 they were able to sell more than two million insurance policies
since its inception.

Maruti Finance
To promote its bottom line growth, Maruti Suzuki launched Maruti Finance in January
2002. Prior to the start of this service Maruti Suzuki had started two joint ventures Citicorp
Maruti and Maruti Countrywide with City Group and GE Countrywide respectively to
assist its client in securing loan.Maruti Suzuki tied up with ABN Amro Bank, HDFC Bank,
ICICI Limited, Kotak Mahindra, Standard Chartered Bank, and Sundaram to start this
venture including its strategic partners in car finance. Again the company entered into a
strategic partnership with SBI in March 2003 Since March 2003, Maruti has sold over
12,000 vehicles through SBI-Maruti Finance. SBI-Maruti Finance is currently available in
166 cities across India.
Citicorp Maruti Finance Limited is a joint venture between Citicorp Finance India and
Maruti Udyog Limited its primary business stated by the company is "hire-purchase
financing of Maruti Suzuki vehicles". City Finance India Limited is a wholly owned
subsidiary of Citibank Overseas Investment Corporation, Delaware, which in turn is a
100% wholly owned subsidiary of Citibank N.A. City Finance India Limited holds 74% of
the stake and Maruti Suzuki holds the remaining 26%.GE Capital, HDFC and Maruti
Suzuki came together in 1995 to form Maruti Countrywide. Maruti claims that its finance

23

program offers most competitive interest rates to its customers, which are lower by 0.25%
to 0.5% from the market rates.

Maruti True Value

Maruti True service offered by Maruti Suzuki to its customers. It is a market place for used
Maruti Suzuki Vehicles. One can buy, sell or exchange used Maruti Suzuki vehicles with
the help of this service in India. As of 31 March 2010 there are 342 outlets.

N2N Fleet Management

N2N is the short form of End to End Fleet Management and provides lease and fleet
management solution to corporate. Clients who have signed up of this service include Gas
Authority of India Ltd, DuPont, Reckitt Benckiser, Doordarshan, Singer India, National
Stock Exchange of India and Tran world. This fleet management service includes end-toend solutions across the vehicle's life, which includes Leasing, Maintenance, Convenience
services and Remarketing.

Maruti Accessories
Many of the auto component companies other than Maruti Suzuki started to offer
components and accessories that were compatible. This caused a serious threat and loss of
revenue to Maruti Suzuki. Maruti Suzuki started a new initiative under the brand
name Maruti Genuine Accessories to offer accessories like alloy wheels, body cover,
carpets, door visors, fog lamps, stereo systems, seat covers and other car care products.
These products are sold through dealer outlets and authorized service stations throughout
India.[64]

Maruti Driving School

A Maruti Driving School in Bangalore As part of its corporate social responsibility Maruti

Suzuki launched the Maruti Driving School in Delhi. Later the services were extended to
other cities of India as well. These schools are modeled on international standards, where
learners go through classroom and practical sessions. Many international practices like road
behavior and attitudes are also taught in these schools. Before driving actual vehicles
participants are trained on Maruti Suzuki
A launch ceremony for the school Jagdish Khattar stated "We are very concerned about
mounting deaths on Indian roads. These can be brought down if government, industry and
the voluntary sector work together in an integrated manner. But we felt that Maruti should
first do something in this regard and hence this initiative of Maruti Driving Schools."

24

(3.2) CUSTOMER BENEFIT

25

A combination of a primary product with additional goods and services defines the
total product to the customer.[1] In other words a CBP is a combination of services
and goods that adds value to the primary product acquired by the customer. The
primary product is the core offering that attracts customers and satisfy their basic
needs. These goods and services adding value to the primary product is called
peripheral goods and services which is not essential to the primary product, but
enhance it. Examples of peripheral goods and services in the fast food industry:
Toys (peripheral goods) are offered as part of a kiddies meal. Kids play area
(peripheral service) inside the fast food restaurant. The CBP may also contain some
variants as part of the product offering. A variant is an attribute that departs from
the CBP overall theme.[2] Adding unique goods or services like free internet access
inside the fast food restaurant gives the customer the ability to surf the internet
while enjoying a meal. Often a variant will become part of the CBP on a continuous
basis, thus it becomes a permanent peripheral good or service.

(3.3) TECHONOLOGY
26

Better thinking. Better processes. Better technologies. More sensitivity. It's what
helps us create better cars and of course, a better way of life.
Big ideas that make a difference to your life. They're what power the Maruti
Suzuki philosophy of cars for a Big Future. It's the cornerstone of all that we
do, be it a more aerodynamic shell for a concept car, or a better way to recycle
wastewater at our plants. It's what drives the R&D efforts of our team of over
1000 engineers and service quality across all Maruti Suzuki dealers and service
centers in India. Today, working shoulder to shoulder with Team Suzuki, our
R&D team has added many achievements to its portfolio:

36 new and refreshed Maruti Suzuki models launched in India in the last
six years

Created a superior Maruti Suzuki Swift, already one of India's most

loved cars. The new avatar of Maruti Suzuki Swift was mounted on a new
platform with new features and offering superior fuel efficiency.

Some of the most fuel efficient petrol cars in India come with the Maruti
Suzuki badge. Even better, their efficiency seems to further improve with a
face-lift every few years

Breathtaking concepts like the Concept A-Star, Concept r III and the
latest, Concept XA Alpha and many more upcoming Maruti Suzuki models

Launch of factory-fitted CNG variants for five models. These Maruti

Suzuki cars use the state-of-the-art i-GPi technology.

Almost all of Maruti Suzukis small cars, sedans, and hatchback comply
with ELV norms of Europe, which means they are free from any hazardous
material, and can be fully recycled.
But all this is already done. We're looking at the road ahead. With a view to
enhance our capabilities, we are setting up a state-of-the-art R&D centre in
Rohtak, Haryana at an investment of Rs. 2000 corer. Spread over an area of 600
acres, this R&D center will be equipped to churn out not just high mileage
petrol cars, but test tracks and labs among many other advanced facilities that
will be operational by 2015.

Maruti Suzuki uses an innovative Compressed Natural Gas technology the

Intelligent Gas Port Injection (iGPI) on five of its models the SX4, Eeco,
WagonR, Estilo and Alto. The iGPI technology delivers more power and runs
27

like a petrol-filled engine while achieving fuel-efficiency. The iGPI technology

uses injectors for each cylinder and a particular amount of CNG is injection in
the engine through gas ports. The Engine Control Unit controls the amount of
CNG needed for each ride.
Two components used by Maruti in cars such as the Maruti Omni to help
increase fuel economy are the crankshaft sensor and knock sensor. They control
the ignition timing and fuel injection. The crank shaft is a part of the cars
engine that translates its linear motion into rotation. The sensor is part of the
internal combustion engine which monitors the position and rotational speed of
the crankshaft. The knock sensor is a part thats linked to the cars engine-when
the cars engine is not working it knocks on it and usually you hear the
knocking sound. The knock sensor will send a signal to the Power control Car
Module (PCM).
The Maruti Swift has a Direct Diesel Injection System engine. This engine has
efficient combustion, higher torque and cleaner emissions. It is an extremely
light engine and has a 75 bhp, 190 Nm of torque capacity. It has a five-step
Maruti Suzukiti-injection technology that makes the car run more smoothly than
other cars. It also has a Double Over Head Camshaft that gives the engine a
quick run. It also has a Chain Drive Timing System. This engine is way better
than the Maruti 800 engine which has a Single Over Head Camshaft and only
two valves per cylinder while the Swift has sixteen-valve cylinder.
The Maruti Suzuki SX4 has a Variable Valve Timing engine.
According to the company, they will use K-Series engines in all car models.
Indias largest car manufacturer Maruti Suzuki decided to implement the Kseries petrol engine in all the models for at least five years according to a
company report. The K-Series engine is a straight four cylinder engine that
comes in Single Overhead Camshaft and Double Overhead Camshaft variants.
This engine will be made in the Maruti Manesar plant in Haryana for the A-Star
car which is produced in India and sold in Europe. The K-Series engine is Euro
4 and Euro 5 compliant and is the most advanced of engines. The engine has a
CO2 emission of 109 gm/km and plans to reduce it further. The engine is
extremely fuel efficient

28

(4.0) MARKETS AND COMPETITIVE ANALYSIS

COMPETITIVE ANALYSIS
Dealer network across the country wide dealership network
allows the company to service customers over a wider
geographical area than competitors. Currently, MUL has 500
sales outlets that cover 312 cities, as compared to 162 outlets
of Hyundai Motors and 140 outlets of Tata Motors.
True Value Operations MUL providing its customers an
opportunity to resale their car to MUL or exchange with a new
Maruti car under its True Value network has proven really
beneficial. In FY07 True Value network touched 10000 units a
month and more than 90% of that resulted in the exchange of
a new car.
Presence across segments In a car manufacturing plant, the
press shop, paint shop, engine and transmission assembly, and
machine shop are used for manufacturing different models.
Commonality of platforms-Commonality between the
platforms of various models lead to lower product
development efforts and higher benefits of economies of scale
uses only two platforms. Strong support in R & D and Product
from parent -MULs strength lies in the strong parentage of
SMC, Japan.

29

MARKETS ANALYSIS
The Cambridge Strategy Group intends to enter the market for
providing marketing and management consulting services to new
and emerging small businesses. The sections below discuss our
analysis of the environment, the target market, our competitors, and
the company.
The environment is well suited for the Cambridge Strategy Group.
While the market for startups and skyrocketing IPOs appears to be
cooling off, this slowdown provides an opportunity for CSG to
establish a presence in the small business arena before the next
growth period.

30

(4.1) OVERALL MARKET AND TARGET MARKET

1. Product - The product aspects of marketing deal with the

specifications of the actual goods or services, plus how it relates to the
end users needs and wants. The range of a product normally includes
supporting elements such as warranties, guarantees, and support.
The term product refers to tangible, physical products as well as
services. Here are some examples of the product decisions to be
made:
Brand Name
Functionality
31

 Styling
Quality
Safety
Packaging
Repairs and Support
Warranty
Accessories and services
Models and sizes

2. Price -This refers to the process of setting a price for a product,

together with discounts. The price need not be monetary; it can plainly
be what is exchanged for the product or services, e.g. time, energy, or
attention. Methods of setting prices optimally are in the domain of
pricing art.

Some example of pricing decisions to be made include:

Pricing strategy (skim, penetration, etc.)
Suggested retail price
Volume discounts and wholesale pricing
Cash and early payment discounts
Seasonal pricing
Bundling
Price flexibility
Price discrimination
32

 Allowances and deals

Discount structure
Distribution and retailer mark-ups
3. Place - (or distribution): refers to how the product gets to the buyer;
for instance, point-of-sale assignment or retailing. This third P has
furthermore at times been called Place, referring to the channel by which
a product or service is sold (e.g. online vs. retail), which geographic
region or industry, to which division (young adults, families, business
citizens), etc. also referring to how the surroundings in which the
product is sold in can influence sales.
Distribution channels
Market coverage
distribution)

(inclusive,

Specific channel members

Inventory management
Warehousing
Distribution centers
Order processing
Transportation
Reverse logistics
Outlet location
Sales territories

33

selective,

or

exclusive

4. Promotion - This includes advertising, sales promotion, including

promotional education, publicity, and individual selling. Branding refers
to the assorted strategies of promoting the product, brand, or company.

Promotional strategy (push, pull, etc)

Advertising
Personal selling & sales force
Sales promotions
Public relations & publicity
Marketing communications budget

All the 4 marketing p's are also known as "the marketing mix"
furthermore are frequently used by a marketer to plot a plan, and
place the foundations of fresh projects/campaigns, it is a
astonishingly useful strategy that has been used ever since the early
1960's, and will be constant for as long as new-found
projects/campaigns are being produced

(4.1.1) MARKETS NEEDS

Kia Motors needs to set up a factory in India to tap growth there and
offset slowing sales in Russia and China, the Dong-A Ilbo
newspaper quoted the South Korean automaker's chief executive as
saying.
India is expected to become the world's third largest auto market by
34

next year, according to industry data provider IHS. Kia Motors, an

affiliate of Hyundai Motor Co, currently has no production in India,
and high import taxes mean Kia's India sales are also negligible.
By contrast, Hyundai has two factories in India and is the country's
second-largest automaker after Maruti Suzuki BSE -1.53 % India
Ltd.
"While growth in Russia or China is stagnating, India is where Kia
will ultimately make a leap forward," Kia CEO Park Han-woo, a
former head of Hyundai Motor's Indian unit, told the newspaper.
The report gave no further details and a Kia Motors spokesman said
the automaker had "no current plan to build a new factory in India or
enter the market".Park also said Kia was developing a rival to
Toyota Motor's Prius hybrid cars, but gave no details. Hyundai
Motor
has
said.

(4.1.1) MARKERTS SIZE AND TRENDS

The first step in any market research undertaking is to understand
the market size and trends that are affecting the market.

35

To start, Grow think identifies all markets in which the client

competes or plans to compete. Next, we determine the relevant size
of these markets. The relevant market size equals a companys sales
if it were to capture 100% of its specific niche of the market.
Growthink determines this size using both a top-down (what percent
of the market can we reasonably expect to penetrate) and bottom-up
(e.g., how many units can we expect to sell at what price)
methodology.
As many assumptions are required when sizing a new or emerging
market, Grow think relies heavily on case studies of thousands of
other companies and clients who have penetrated new markets.
In assessing markets, Grow think looks at the current market size
and what the market size might be in the short, mid and long-term.
Specifically, we answer key questions such as the following:

How has the relevant market size changed over the past one to
five years?
What is the projected growth of the relevant market?
What factors will affect this growth? General economic
factors? Changing regulatory conditions? Changing consumer
needs?

(4.1.3) HISTORICAL AND PROJECTED MARKET

GROWTH
36

HISTORICAL GROWTH

Achievements/ recognition:

The company takes great pride in sharing that customers have

rated Maruti Suzuki first once again in Customer Satisfaction
Survey conducted by independent body, J.D.Power Asia Pacific. It
is 9th time in a row.
Maruti Suzuki wins 'Golden Peacock EcoInnovation Award'

Maruti Suzuki Ranks Highest in Automotive Customer

Satisfaction in India for Ninth Consecutive Year.

Maruti Suzuki becomes the first Indian car company to export

half a million cars

Other Accolades

During 200910, the company, its products and services received

reputed awards and accolades instituted by independent expert
groups, media houses and research agencies.
These Include

Rated as No. 1 in J D Power Sales Satisfaction Index

Hatchback of the year Ritz by Autocar

Car of the year Ritz by Business Motoring

Manufacturer of the year by CNBC Overdrive

37

Ranked third amongst global car companies in the World's

Most Reputed Company Survey 2009

National Award for Excellence in Corporate Governance by

ICSI

MARKET GROWTH
Maruti Suzuki India Limited (marutt i suzuki), commonly referred
to as Maruti and formerly known as Maruti Udyog Limited, is an
automobile manufacturer in India. It is a subsidiary of Japanese
automobile and motorcycle manufacturer Suzuki. As of November
2012, it had a market share of 37% of the Indian passenger car
markets.Maruti Suzuki manufactures and sells a complete range of
cars from the entry level Maruti 800 (discontinued), Alto, to the
hatchback Ritz, Celerio, ,
A-Star, Swift, Wagon
R, Zen and
sedans DZire, Ciaz, Kizashi and SX4,
in
the
'C'
segment
Eeco, Omni, Multi Purpose vehicle Suzuki Ertiga and Sports Utility
vehicle Grand Vitara
The company's headquarters are at No 1, Nelson Mandela
Road, New Delhi. In February 2012, the company sold its ten
millionth vehicles in India.

38

(4.2) INDUSTRY ANALYSIS

(4.2.1) SWOT analysis of Maruti Suzuki

Maruti Suzuki is the market leader in India and has 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

Maruti Udyog limited (MARUTI SUZUKI) is in a leadership

position in the market with a market share of 48.74

Major strength of MARUTI SUZUKI is having largest

network of dealers and after sales service centers in the country.

Good promotional strategy is adopted by MARUTI SUZUKI

to transfer its thoughts to the people about its products.
39

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 MARUTI SUZUKI

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

MARUTI SUZUKI is the first automobile company to start

second hand vehicle sales through its True-value entity.

MARUTI SUZUKI has good market share and hence its after
sales service is a major revenue contributor.

Weaknesses

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 MARUTI

SUZUKI.

Younger generations started getting a great affinity towards

new foreign brands

The management and the companys labor unions are not in

good terms. The recent strikes of the employees have slowed down
production and in turn affecting sales.

40

Maruti hasnt proved itself in SUV segment like other players.

Opportunities

MARUTI SUZUKI has launched its LPG version of Wagon R

and it was a good move Maruti Suzuki tenuously

MARUTI SUZUKI can start R&D on electric cars for a much

better substitute of the fuel.

Marutis 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.

41

Threats

MARUTI SUZUKI 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 competitors segment

China may give a good competition as they are also planning

to enter into Indian car segment

Launch of Hyundais H800 may result in the decline of Alto

sales

(4.2.2) MAJOR INDUSTRY PARTICIPANTS

India's largest automobile manufacturer, Maruti Suzuki India Ltd,
has achieved excellence in product innovation, production systems,
customer services and satisfaction, and has a hold of over half the
Indian auto market. It is also a company which is known for making
42

many changes over the years to face competition and for using HRM
strategies extensively. Yet the company does not appear to have been
able to develop a mature relationship with its employee unions, and
has been repeatedly facing confrontation with employee
representatives. This could be an indication of ineptitude on the part
of a multinational in understanding employee rights and aspirations
in the host country, or a deliberate strategy to control unions despite
facing small periodic losses.
Introduction
MARUTI SUZUKI INDIA LTD has been making many changes
over the years to face competition. It is also known as a company to
use HRM strategies extensively. A climate intervention programmed
was introduced through common canteen and common uniform for
managerial staff and workers. Other interventions included, change
in the nature of supervision to emphasize the supervisor's guidance
role, employee development and training, and creating the image of
a caring organization through good welfare facilities. The company
also had small group activities (SGA) and teams, regular
departmental meetings for generating ideas, communication
programmers through posters, leaflets, departmental meetings, and
non-bargaining management union meetings (Sen 2010:444).
Absenteeism was apparently reduced at one point of time to just 5 %
in the plant as a result of these interventions (Nair & Rao 1990: 2-6).
But are these practices incompatible with good industrial relations?
Various events would seem to indicate that MSIL is unable to handle
its human resources and unions in the context of change
management. Starting from 2000 right up to 2011, the company has
faced labor trouble, strikes, work stoppages and disruptions from
time to time. A 13-day strike during July 2011, partial work
stoppages and disruptions during September 2000 to January 2001,
resumption of confrontation during August 2005, and changes in the
union, its name or its character, emergence of another union etc
leave many questions unanswered. Or are these strategies part of a
pattern of labor relations practiced by multinationals? It would also
be interesting to look at the role of the state during these
interruptions and whether the state's intentions have backfired.
The Company

43

Maruti Udyog Ltd was launched in 1981 as a joint venture between

the Government of India and Suzuki Motors of Japan to produce a
people's car, in a market which had been dominated by Hindustan
Motors' Ambassador and Fiat's small car. From the late 80s the
company began a new era as India's largest car manufacturer and
soon became the holder of over 80% of the automobile market share.
The company was also upheld as a model employer, paying high
wages and using several Japanese management techniques for
integrating employees into the production process. By 1995 it got
ISO 1992 certification and continued to grab a number of domestic
and foreign awards each year on productivity, customer satisfaction,
exports and business excellence. In 1996 it got the first prize in the
national competition in Quality Circles (Sen 2010:446).
But with the entry and growth of new passenger automobiles in
India like, Hyundai, Daewoo, Tata Motors, Ford, Fiat, General
Motors, Mitsubishi, Honda and Toyota, from mid-1990s, the
company's share dwindled to less than 50% by 1999-2000. Its
response was to launch a number of new models from time to time.
The year 2000-01 was a special year for Maruti which had to absorb
substantial depreciation for several new models introduced at once.
Side by side Maruti began several initiatives to improve its
production and shop floor working through cost cutting, enhanced
customer services and efficiency.

(4.2.3) ECONOMIC, COMPETITIVE, OTHER

TRENDS
44

ECONOMIC TRENDS
Indian economy is expected to grow at a rate of more than 6%
this year
The A4 segment is expected to grow annually at the rate of
30% per year for the next 5 years
The upper middle class segment is expected to grow from 3%
in 2010 to 12% in 2015
The people who fall under rich segment is expected to grow
from 1% in 2010 to 4% in 2015
The Indian economy is expected to grow at more than 7% in
the coming years after the present slowdown.

COPETITIVE TRENDS
A competitive analysis is a critical part of your company marketing
plan. With this evaluation, you can establish what makes your
product or service unique--and therefore what attributes you play up
in order to attract your target market.
Evaluate your competitors by placing them in strategic groups
according to how directly they compete for a share of the customer's
dollar. For each competitor or strategic group, list their product or
service, its profitability, growth pattern, marketing objectives and
assumptions, current and past strategies, organizational and cost
structure, strengths and weaknesses, and size (in sales) of the
competitor's business. Answer questions such as:

45

Who are your competitors?

What products or services do they sell?

What is each competitor's market share?

What are their past strategies?

What are their current strategies?

What type of media is used to market their products or

services?

How many hours per week do they purchase to advertise

through the media used in this market?

What are each competitor's strengths and weaknesses?

What potential threats do your competitors pose?

What potential opportunities do they make available for you?

A quick and easy way to compare your product or service with
similar ones on the market is to make a competition grid. Down the
left side of a piece of paper, write the names of four or five products
or services that compete with yours. To help you generate this list,
think of what your customers would buy if they didn't buy your
product or service.

46

Across the top of the paper, list the main features and characteristics
of each product or service. Include such things as target market,
price, size, method of distribution, and extent of customer service for
a product. For a service, list prospective buyers, where the service is
available, price, website, toll-free phone number, and other features
that are relevant. A glance at the competition grid will help you see
where your product fits in the overall market.

(4.2.4) MAIN COMPETITORS

HYUNDAI MOTOR INDIA LIMITED

Hyundai Motor India Limited (HMIL) is a wholly owned subsidiary of Hyundai
Motor Company, South Korea and is the second largest and the fastest growing
car manufacturer in India. HMIL presently markets over 25 variants of
passenger cars in six segments. The Santro in the B segment, and Getz in the B+
segment.
HYUNDAI SANTRO
We are mainly going to concentrate on the various marketing and positioning
strategies of Hyundai Santro as against that of Maruti Zen and Alto and Hyundai
Getz as against Maruti Swift.
POSITIONING OF SANTRO
The old positioning of the Santro was that pf a family car, this positioning
strategy was changed in around 2002 and Santro was repositioned as to that of
a smart car for young people. The target age group for the car had now shifted
from 30-35 years to 25-30 years. The repositioning followed the face-lifts the
car has been getting from time to time in the form of engine up gradation, new
power steering, automatic transmission, etc, to keep the excitement around it
alive in the highly competitive small car market. The repositioning also comes
ahead of the possible launch of a new design Santro, and the super B-segment
car Getz, sometime in 2003.

47

The Santro was given a fresh new positioning from a complete family car
to a sunshine car denoting a fresh new attitude and a changing your life
positioning. As the average age of a car owner has declined from around 30-35
three years ago to 25-30, primarily because of changing lifestyles, cheap and
easily available finance, etc. the company thought that instead of promoting the
Santro as a family car, it should be promoted as a car that can change the life of
a young person since many of the buyers were young buyers.
HYUNDAIS PRICING STRATEGY
With the launch of Maruti Swift recently a price war was expected to kick in .
Immediately after maruti raised prices on its debutante Hyundai Motor India hit
back with a Rs 16,000-19,000 markdown on three new variants of Santro Xing.
The company has introduced the XK and XL variants at a lower tag of
Rs 3, 26,999 and Rs .3, 45,999 respectively. The new price variants are likely to
give Marutis existing B-segment models, Zen and WagonR a run for their
money. Hyundai has also launched a new non-AC variant of the Santo at Rs
2.79 lakh, a tad higher than what the existing non-Ac Santro costs. The next
offensive is due from Maruti. With the Santros new price positioning, Zen and
particularly WagonR may be due for a correction, or at least a limited-period
subvention. If that happens the domino effect will kick in across the B-segment.
Hyundai is positioning its new variants on the tech platform. Strapped
with 1.1 liter engine with eRLX Active Intelligence technology, the new
variants also come with new color-coordinated interiors, a new front grill and a
4-speed AC blower that makes the air conditioning more efficient.
TATA MOTORS
Established in 1945, Tata Motors is India's largest and only fully integrated
automobile company. Tata Motors began manufacturing commercial vehicles in
1954 with a 15-year collaboration agreement with Daimler Benz of Germany.
TATA INDICA Tata motors flagship brand
The company's passenger car range comprises the hatchback Indica, the Indigo
sedan and the Marina, its station wagon variant, in petrol and diesel versions.
The Tata Indica, India's first indigenously designed and manufactured car, was
launched by Tata Motors in 1999 as part of its ongoing effort towards giving
India transport solutions that were designed for Indian conditions. Currently, the
company's passenger cars and Maruti Suzukiti-utility vehicles have a 16-per
cent market share.
POSITIONING OF INDICA
Tata has positioned Indica as `more car per car'. The new car offers
more space, more style, more power and more options. Emphasizing the
delivery of world class quality. They have tried to redefine the small car market
48

as it has been understood in India. True to its "More cars per car" positioning,
the Indica CNG offers all the core benefits of the Indica combined with the
advantage of CNG. One of the most popular advertisements on television
currently, is the one where the guy portrayed as the loveable liar, gets socked
every time he lies ; but not when he speaks about the Indica thus implying-
must be true. Elaborating on the campaign, the new ad was launched with the
intention of giving the Indica V2 brand a touch of youthfulness.
TATAS PRICING STRATEGY
After the price war was being triggered off by Hyundai being the first company
to introduce what came to be known as, pricing based on customer's value
perceptions, all others followed suit. Telcos Indica came in the range of Rs 2.56
Lake to Rs 3.88 Lake with 4 models. The price-points in the car market were
replaced by price-bands. The width of a price-band was a function of the size of
the segment being targeted besides the intensity of competition. The thumb rule
being 'the higher the intensity, the wider the price-band.'

CURRENT STRATEGIES FOLLOWED BY MARUTI SUZUKI

I.

PRICING STRATEGY - CATERING TO ALL SEGMENTS

Maruti caters to all segments and has a product offering at all price points. It has
a car priced at Rs.1, 87,000.00 which is the lowest offer on road. Maruti gets
70% business from repeat buyers who earlier had owned a Maruti car. Their
pricing strategy is to provide an option to every customer looking for up
gradation in his car. Their sole motive of having so many product offering is to
be in the consideration set of every passenger car customer in India. Here is how
every price point is covered.
II. OFFERING ONE STOP SHOP TO CUSTOMERS OR CREATING
DIFFERENT REVENUE STREAMS
Maruti has successfully developed different revenue streams without making
huge investments in the form of MDS, N2N, Maruti Insurance and Maruti
Finance. These help them in making the customer experience hassle free and
helps building customer satisfaction.
Maruti Driving School (MDS):
Maruti has established this with the goal to capture the market where there is
inhibition in buying cars due to inability to drive the car. This brings that
customer to Maruti showroom and Maruti ends up creating a customer.

49

C) MAJOR FUTURE STRATEGIES

The launch of Swift and phasing out Zen is a strategic move. Alto was launched
I. PHASING OUT ZEN IN 2007
Keeping in mind that it will take over Maruti 800 market in future. Perhaps
being the flagship product phasing out of Maruti 800 faced lots of resistance
from dealers all over. Another reason behind not phasing out Maruti 800 was the
fear of brand shift of customers to other competitors product. Swift was
launched in May, 2005 in the price band starting from 4 lacs. Before launch of
Swift Maruti management had decided that they will phase out Zen since it had
already came up with two modifications. The major reason behind this decision
was cannibalization of Wagon R and Swift due to overlapping 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 Rs. 3000.00 more margins to dealer on the sale
of Wagon-R as compared to Zen. This is to let dealer push Wagon R instead of
Zen.

II. MARUTI PLANS FOR A BIG DIESEL FORAY

Maruti would set up a diesel engine plant at Gurgaon in line with its plan to
become at the new car manufacturing company, called Maruti Suzuki
Automobiles India Limited, will be a joint venture between Maruti Udyog and
Suzuki Motor Corporation holding a 70 per cent and 30 per cent stake
respectively. The Rs1, 524.2 corer plants will have a capacity to roll out 1 Lake
Cars per year with a capacity to scale up to 2.5 Lake Units per annum. The new
car manufacturing plant will begin commercial production by the end of 2006.
Major Player in diesel vehicles in a couple of years. This has been done in the
wake of major competition from Tata Indica and meets the growing demand of
diesel cars in India. While the annual growth in the diesel segment was 13 per
cent in the last three years, it was 19-20 per cent in the first quarter (April-June)
of the current fiscal. Maruti has currently an insignificant presence in diesel
vehicle. It will manufacture new generation CRDI (common rail direct
injection) engines in collaboration with Fiat-GM
Opel and engines will be of 1200 cc. The plant with a capacity to
produce one Lake diesel engines would be operational in 2006. At present,
Peugeot of France, supplies diesel engines for Maruti's Zen and mid-sized
Esteem models. This will further reduce the imported component in Maruti
vehicles, making them more competitive in the Indian market.
III. MARUTI PLANS FOR A NEW ENGINE AND TRANSMISSION
PLANT

50

The engine and the transmission plant will be owned by Suzuki Power train
India Limited in which Suzuki Motor Corporation would hold 51 per cent stake
and Maruti Udyog holding the balance. The ultimate total plant capacity would
be three lakh diesel engines. However, the initial production would be 1 lakh
diesel engines, 20,000 petrol engines and 1.4 lakh transmission assemblies.
Investment in this facility will be Rs.1,747.7 crore. The commercial production
will start by the end of 2006.

(5.0) BUSINESS STRATEGY AND MARKETING

PLAN
Maruti Suzuki intends to continue to focus on the small car segment, while
offering products in most segments of the Indian passenger car market. The
business strategies of MARUTI SUZUKI are:
Maintain and enhance the product range.
MARUTI SUZUKI utilizes Suzukis expertise in small car technology to
produce new variants of the existing models and to upgrade the existing one
with contemporary technology and features. They intend to increase the number
of variants of existing models in the A and B segments
Increase reach and penetration. MARUTI SUZUKI has one of the extensive
sales and service network in terms of geographical spread, and penetration, in
terms of sales volumes across India. They continuously assist their dealers in
enhancing their performance and profitability by suggesting improvements,
such as increasing the number of sales executives employed at dealerships.
Currently, wide network of MASSs primarily provides after sales service. They
can even use the MASSs that are located in some of the more remote areas of
India as sales outlets to increase the reach and penetration in those areas.
51

Increase availability of automobile finance. MARUTI SUZUKI being the

market leader should seek opportunities to expand the size of the Indian
passenger car market, especially in the small car segment. They have made
available, through the dealers, finance products of eight select finance
companies under the brand Maruti Finance. This increases the availability and
transparency of the financing transactions, which can contribute greatly to the
customer satisfaction and confidence. Their agreement with the State Bank of
India, or SBI, to provide the finance to their customers has enabled it to
leverage the strength of the extensive network of SBI, more than 9,000 branches
across India. This all will enable it to promote the demand of its offering among
SBIs vast customer base and expand the size of the passenger car market in
India.
Secure repeat purchases by offering a 360 degree customer experience.
MARUTI SUZUKI is extensible trying to provide customers with a one-stop
shop for automobiles and automobile-related products and services. They are
trying to make available to the customers a wide range of Maruti-branded
services at different stages of ownership. This helps them to secure repeat
purchases by the existing customers and increase the revenue. The following
products and services offered by MARUTI SUZUKI:
- Automobile insurance;
- Automobile finance;
- Maruti-certified pre-owned cars available for purchase;
- Leasing and fleet management;
- Accessories; and
- Extended warranties.
Continuous benchmarking of manufacturing capabilities:
MARUTI SUZUKI continuously benchmarks, with that of Suzukis premier
one, its facility to improve its operating efficiencies. As part of Suzukis plans to
make Maruti its research and development center for cars in Asia (outside
Japan), it is expected that MARUTI SUZUKI will ultimately be having the
capability to have full model change capability.
Continue to reduce costs to offer more competitive products. Cost
competitiveness has been, and continues to be, central to MARUTI SUZUKIs
strategy, as the leading manufacturer in the small car segment, to expand the
size of the market by offering competitively priced, high quality products. The
components of this strategy are:
Higher levels of localization
MARUTI SUZUKI has increased the level of localization over time by working
52

closely with the vendors in India to upgrade their capabilities, which has
enabled them to reduce costs and has increased the flexibility in pricing. A look
at the new models tells that MARUTI SUZUKI, with any new model, tries to
have a minimum of 75% localization level and then tries to increase the same to
at least 90%.
Vendor participation in cost reduction
In some of the major vendors MARUTI SUZUKI has implemented the Maruti
Production System which focuses on the eliminating the wasteful activities in
their manufacturing processes such as improving their productivity, reducing
21 the number of their components that are rejected, reducing materials
handling, improving their yield from materials, and reducing their inventories.
This helps in reducing the costs of production, which also reduces the costs of
the components being required by MARUTI SUZUKI.
Cost reduction on warranties
the warranty costs of the vendors are the cost of components incurred by them
to service warranty claims arising from defects in components supplied by
them. MARUTI SUZUKI works in association with the vendors to reduce their
warranty cost.
Reduction in initial investment cost
through in-house development and localized sourcing of dies, welding jigs and
other equipment, introduction of flexible welding lines that can be used for
Maruti Suzuki multiple models, and in-house development of machine shop
equipment, MARUTI SUZUKI tries to reduce the initial cost associated with
the initial investment.
Reduction in number of vehicle platforms
Maruti Suzuki currently uses six basic vehicle platforms for production. They
even intend to reduce the number of basic vehicle platforms and increasingly
share basic vehicle platforms among Maruti Suzuki multiple models in order to
spread development costs and achieve economies of scale.
.
Lowering the cost of ownership:
MARUTI SUZUKI seeks to reduce the Consumers cost of ownership of their
cars, which comprises the cost of purchase, fuel consumption, maintenance,
including spare parts and repairs, insurance, and resale value. MARUTI
SUZUKI is trying to achieve this by:
manufacture high quality, fuel-efficient, cars;
price cars, spare parts and accessories, and extended warranties, competitively;
make automobile finance more easily available to the consumer on
competitive terms;
53

 make maintenance services, including spare parts, accessories and repairs,

widely available through the extensive sales and service network; 22
offer automobile insurance and other automobile-related services through the
sales and service network; and
Create a market for Maruti-certified pre-owned cars through Maruti True
Value business.

(5.1) VALUE PROPOSITION: WHY BUY FROM US?

Marutis marketing objective is to continually offer the customer
new products and services that:
reduce the customers cost of ownership of our cars; and
Anticipate and address the customers needs and preferences
in all aspects and stages of car ownership, to provide what
MARUTI SUZUKI refer to as the 360 degree customer
experience. MARUTI SUZUKI has been aggressively cutting
prices of its models since the beginning of the year. It began
the year by slashing the price of Esteem's diesel version
followed by a by the reduction on the premium segment Bale
no. Then the midsized Verses price was slashed, Alto's price
tag was then pruned putting its base variant at par with the AC
version of M800. The rationale behind the price cuts is the
focus on offering new upgraded vehicles at a low price.
Warranty and Extended Warranty Program
MARUTI SUZUKI offer a two-year warranty on all the vehicles at
the time of sale. The dealers are required to address any claim
made by a customer, in accordance with practices and
procedures prescribed by MARUTI SUZUKI, under the provisions
of the warranty in force at that time. The dealers subsequently
claim the warranty cost from MARUTI SUZUKI.MARUTI SUZUKI
analyze warranty claims from dealers and either claim the cost
from the vendors, in the case of defective components, or bear
54

the cost ourselves, in the case of manufacturing defects.

MARUTI SUZUKI also offers an extended paid-warranty program
marketed under the brand, Forever Yours for the third and
fourth year after purchase. The extended warranty program is
intended to maintain the dealers contact with the customer
and increase the revenue generated from sale of spares,
accessories and automobile-related services. An effort is made
during the period of the extended warranty to encourage the
customer to exchange his existing Maruti car for a new Maruti
car, or upgrade to a new Maruti car.
True Value Solutions Limited (TVSL)
TVSL was incorporated on January 14, 2002 as a wholly owned
subsidiary of Maruti with an authorized capital of Rs. 5 million.
It obtained the certificate to commence business on May 1,
2002 in NCT of Delhi and Haryana. TVSL provides value-added
services to owners and users of motor vehicles on matters
relating to manpower services with regard to recruitment,
training and development. The company also intends to
promote the business in the areas of pre-owned cars, lease and
fleet management, finance and insurance. These services
include compliance with predefined business processes at the
dealership, continuous training of dealer staff in order to ensure
quality of operation to ultimately achieve the business
objectives of TVSL.

(5.2) COMPETITIVE ADVANTAGES

Competitive advantages give a company an edge over its rivals and
an ability to generate greater value for the firm and its shareholders.
The more sustainable the competitive advantage, the more difficult it
is for competitors to neutralize the advantage.
There are two main types of competitive advantages: comparative
advantage and differential advantage. Comparative advantage, or
cost advantage, is a firm's ability to produce a good or service at a
lower cost than its competitors, which gives the firm the ability sell
its goods or services at a lower price than its competition or to
generate a larger margin on sales. A differential advantage is created
when a firm's products or services differ from its competitors and are
seen as better than a competitor's products by customers.

55

(5.3) MARKETING TARGETS AND STRATEGY

In earlier days when the market was dominated by only few brands like
Ambassador & Premier Padmini, Maruti Suzuki India Limited entered the
Indian market with different strategy. The strategy of the company was to offer
a compact, modern and fuel efficient car. Maruti released its first Maruti 800 car
on 14 December 1983 to fulfill the dreams of Indian customers and became the
market leader. Since 1983 till date Maruti Suzuki gradually offered several
choices to the consumer. Due to aggressive competitors today Maruti Suzuki
believes in Innovative Marketing Strategies. With the changing needs, wants &
requirements of customers and markets, Maruti Suzuki is altering their Brand
Positioning, Advertising and Distribution strategy.

56

(5.3.1) PRICING STRATEGY

PRICING
a. Pricing Objective: Maximum market share
Since MARUTI SUZUKIs vision is to be a leader in Indian automobile sector.
Products launched by it are aimed at getting maximum market share in the long
term in their respective segment. MARUTI SUZUKI follows a marketpenetration pricing strategy to fulfill its objective.
b. Determining Demand:
The demand for cars in this segment will is expected to grow at 30% per year in
India. The demand curve for cars is highly elastic since price in an important
attribute and plays a major role in consumer decision making for cars and there
is also a significant competition for cars in this segment. Pricing it above
competitors price will affect the sale significantly.
Estimated growth rate of sales in this segment = 30%
Sales in the year 2015 = 98800
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Marutis aim in next five years is gain a market share of 10%

1 Estimated sale for this car in 2015 = 10% of 98800 = 9880
Estimated growth rate for this cars sales over 5 years = 40%
So, Estimated sales of this car in the current year = 1837 units
(9880 = x (1 + .4) ^5 => x = 1837)
c. Estimating Cost:
The number of units to be produced this year = 1837 units
Estimated Variable Cost = 1.75 lac per unit
Estimated Fixed Cost for the current year = 115 core
d. Analyzing Competitors:
Points of parity with competitors
Style and Design.
Sedan in the price range of 10-14 lacs
Point of Difference against competitors
Power.
Mileage
More seating comfort
More luggage space
Better distribution system
After sales support.
Competitors Price
Car Name Lowest Price Top Most Price
Chevrolet Cruz Rs. 11, 56,129 Rs. 14, 14,942
Toyota corolla alt is 1.8 j Rs. 10, 23,750 Rs. 13, 12,080

58

Honda civic Rs. 12, 47,000 Rs. 13, 41,400

Skoda Laura Rs. 13, 38,550 Rs. 14, 66,065

Skoda Octavia ambient 1.8 turbo Rs. 10, 44,429 Rs. 13, 21,763
Volkswagen Rs. 13, 19,209 Rs. 14, 45,534
a. Selecting a Pricing Method:
The pricing method used will be mark-up pricing. This pricing method is in
accordance with
MARUTI SUZUKIs objective of maximizing its market share.
Estimated variable cost = 1.75 lac per unit
Estimated fixed cost = 115 crore
Expected unit sales = 2400 (for the current year)
Unit cost = variable cost + fixed cost / unit sales
= 1, 75,000 + 1,15,00,00,000 / 1837
= 1, 75,000 + 6, 26,020
= 801000
Now,
Markup price = (unit cost) / (1-desired return on sales)
Desired return on sales = 20%
Markup price = 801000 / (1 - .2) = 10, 01,275
Is this price justified?
1. Price is justified on the basis of benefits it provides to the consumer. The
following are the benefits that enhance consumer perceived value:
1. Kizashi is high on functional and symbolic value because of its designing and
Styling, performance, higher power and various comfort and safety features.
This provides consumers with product benefits.

59

2. MARUTI SUZUKI provides excellent buying experience with much state of

art showrooms. This provides consumers with service benefits.
3. MARUTI SUZUKI provides excellent after sales servicing to the customers.
This provides consumers with service benefits.
4. MARUTI SUZUKI has an excellent brand image in compact car segment
build over last three decades. This adds to consumer perceived value.
1. The pricing of Kizashi is consistent with MARUTI SUZUKIs objective of
increasing its market share. With this objective company cant price it higher
compared to the competitors. Since it will end up losing customers.
2. The price of Kizashi is also at par with the benefits it provides to the
customers which is in accordance to MARUTI SUZUKIs brand image.
3. The price of the product is subject to fluctuation in price of raw materials and
foreign Exchange rates. Company has to charge for covering these risks.
4. The pricing of Kizashi is also consistent with MARUTI SUZUKIs objective
of providing quality product at low cost and enhance customer satisfaction.

(5.3.2) Advertising and promotion strategy

PROMOTIONAL STRATEGY:
Every company is it a big or small needs an innovative promotional strategy
because promotional campaigns tend to have a huge effect on the reception of
the product. Maruti Suzuki India Ltd has a formidable line-up of vehicles in its
stable and has been quite aggressive about promoting each of its automobile
brands. With an intention to face with cutthroat competition and due to
declining market shares, in 2000 Maruti Suzuki cut the prices of few models
like Wagon R, Omni and Maruti 800 because Maruti knew very well that the
Indian consumer is very sensitive about price & this price cut will definitely
beneficial for company. In Jan 2002 to attract the customers, Maruti decided
that some of its corporate assets in Delhi including Marutis manufacturing
plant and childrens park should be promoted. With an intention to promote road
safety and efficient driving the company held carnivals periodically at IDTR.
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In 2003, to attract the customers Maruti Suzuki launched attractive campaign

like Change Your Life. The company also offered vehicle insurance for One
rupee only. In this campaign the customers were asked to write down the chassis
and engine number of their vehicles on the entry form and had to answer the
question. In this contest the winners were chosen by a draw of lots and were
entitled to gifts worth Rs.50 million.
In 2004, Maruti introduced the 2599 offer under which by paying an EMI of
Rs. 2599 for seven years after a down payment of Rs.40000, a consumer could
buy a Maruti 800. In 2004 Maruti introduced the Teacher Plus scheme, in a tie
up with SBI. In this scheme the bank offered reduced rates of interest for
teachers who were interested in buying a new car.
Rural India is a fast emerging as a focus area in the countrys economy. Maruti
knew that there is a great potential in rural markets & in rural markets, the
endorsements of opinion makers takes precedence over an informed objective
Judgment. Considering this fact, Maruti Suzuki launched a panchayat scheme
for such opinion makers which covers the village Sarpanch, doctors and
teachers in government instititutions, rural bank officers where in an extra
discount is given to make a sell. As a part of customer engaging strategy and to
attract the potential customers Maruti organized various melas wherein local
flavor is added by organizing traditional social activities like Gramin Mahotsava
are conducted round the year. As a part of promotional approach Maruti Suzuki
promoted Swift & other brands through sponsoring various live programmes
(Dancing shows) like Dance India Dance.

ADVERTISING STRATEGY:
Advertising is one aspect of brand building. Whenever Maruti launched any
brand, it supported that brand with an ad campaign. Marutis advertising
campaigns included TVCs, Radio and Print ads, Point of Sale, Mobile
promotions, online marketing, Outdoor promotions. Marutis advertising
strategy focused both on building up its corporate image and promoting its cars.
Marutis campaigns emphasized different aspects of its cars, including fuel
efficiency, looks, space, etc.
In the late 1990s, Marutis advertising campaigns were handled by Lowe India
(later known as Lowe Lint as & Partners, India) and Reinfusion DY&R. While
advertising related to Esteem, Zen and Baleno were handled by Lowe India and
the ad campaign of Maruti 800, Gypsy, Omni and Wagon-R were handled by
Reinfusion. With an intention to promote the all brands effectively, in 2000
Maruti decided to appoint Capital Advertising. In 2003, Maruti Suzuki came up
with an innovative advertising that became popular for its simplicity and clear
message. In this ad one child plays with his toy car & when the father asked
61

him, he replies, Kya karoon papa petrol khatam hi nahi hota. This ad depicted
the fuel efficiency of Maruti Suzuki.

(5.3.3) DISTRIBUTION STRATEGY:

Distribution is an important marketing mix. In earlier days the consumers used
to book for a car and wait for more than a year to actually buy it. Also the
concept of Show rooms was non-existent. Even worse thing was the state of the
after sales service. With an objective to change this scenario & to offer better
service to customers, Maruti took initiative. To gain competitive advantage,
Maruti Suzuki developed a unique distribution network. Presently the company
has a sales network of 802 centers in 555 towns and cities, and provides service
support to customers at 2740 workshops in over 1335 towns and cities.
The basic objective behind establishing the vast distribution network was to
reach the customers even in remote areas and deliver the products of the
company. The company has formed the Dealer territories and the concept of
competition amongst these dealers has been brought about. Periodically
corporate image campaigns in all dealership are carried out. In 2003, to increase
the competition the company implemented a strategy for its dealers to increase
their profitability levels. Special awards were sometimes given by company for
sales of special categories. Maruti Suzuki had given an opportunity to dealers to
make more profits from various avenues like used car finance and insurance
services. In 2001, Maruti started an initiative known as Non Stop Maruti
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Express Highway. As a part of this initiative Maruti developed 255 customer

service outlets along with 21 highway routes by 2001-02. Also with an intention
to provide fast service in less time Maruti had offered Express Service Facility.
In the year 2008, Maruti had near about 2,500 rural dealer sales executives,
among the total 15,000 dealer sales executives.

(5.3.4) SALES STRATEGY

Marutis marketing objective is to continually offer the customer new products
and services that:

reduce the customers cost of ownership of cars; and

Anticipate and address the customers needs and preferences in all

aspects and stages of car ownership, to provide what Maruti Suzuki refer
to as the 360 degree customer experience.

Maruti Suzuki has been aggressively cutting prices of its models since the
beginning of the year. It began the year by slashing the price of Esteem's diesel
version followed by a by the reduction on the premium segment Baleno. Then
63

the midsized Versa's price was slashed, Alto's price tag was then pruned putting
its base variant at par with the AC version of M800.
The rationale behind the price cuts is the focus on offering new upgraded
vehicles at a low price.

Warranty and Extended Warranty Program

Maruti Suzuki offers a two-year warranty on all the vehicles at the time
of sale. The dealers are required to address any claim made by a customer, in
accordance with practices and procedures prescribed by Maruti Suzuki, under
the provisions of the warranty in force at that time. The dealers subsequently
claim the warranty cost from Maruti Suzuki. Maruti Suzuki analyze warranty
claims from dealers and either claim the cost from the vendors, in the case of
defective components, or bear the cost ourselves, in the case of manufacturing
defects.
Maruti Suzuki also offers an extended paid-warranty program marketed
under the brand, Forever Yours for the third and fourth year after purchase.
The extended warranty program is intended to maintain the dealers contact
with the customer and increase the revenue generated from sale of spares,
accessories and automobile-related services. An effort is made during the period
of the extended warranty to encourage the customer to exchange his existing
Maruti car for a new Maruti car, or upgrade to a new Maruti car.

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(6.0) PRODUCTION PLAN

(6.1) PRODUCTION PROCESS

Production Division of Maruti Suzuki India Limited
Production division in maruti Suzuki India Ltd has been
renamed as production business vertical (PBV) after
inclusion of projects, production Engineering, vehicle
I n s p e c t i o n a n d s u p p l i e r Q u a l i t y As s u r a n c e d i v i s i o n s i n i t .
Major components of PBV
Press shop and blanking line
Wel d s h o p ( 1 , 2 , a n d 3 )

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Paint shop (1, 2, and 3)

Engine Ass embl y ( 1, 2, and 3)
Material X (1, 2, and 3)
Plant maintenance
KB Casting
KB Engine
KB Machine shop
Production facility at Manesar plant
S Q A ( S u p p l i e r Q u a l i t y As s u r a n c e )
P r o d u c t i o n E n g i n e e r i n g a n d p r o d u c t s Veh i c l e I n s p e c t i o n s
(VI)

PRESS SHOP
The press shop can be regarded as the starting point of the car manufacturing
process. Centrally located between weld 1, weld 2 and weld 3 supplies
components to all the three plants. The press shop has a batch production
system whereas the plants have aline production system. The press shop
maintains an inventory of at least two days. The weld shop as per the
requirements picks the finished body parts from the press shop. These
may be divided as A, B and C. A components are large outer components as
for example roof, door panels etc. These components are manufactured in the
press
shopa t M a r u t i d u e t o d e s i g n s e c r e c y a n d h u g e i n v e s t m e n
t r e q u i r e m e n t s . B a n d C components are manufactured by joint
ventures or bought from vendors.

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Process flow of Press Shop activity:-

1. Currently Press Shop is producing sheet metal components

f o r 8 r u n n i n g models of Maruti Suzuki and one model of GM India Tavera2. The Blanking and stamping shop processes 10000 metric ton of steel /
month .e. 400 tons a day

MACHINES

Five Transfer Press ( 4000 ton , 3500 ton , 2400 ton -1 2400 ton -2 ,2000
ton in terms of total capacity i.e. draw+trim+pierce+bend+restrike ) &1
Tandem line( 1500 ton draw capacity )
Two Coil processing lines ( ROSL Shear line & Blanking line ) SPMof
60
Capacity of 55,000 strokes / day from 400 tons of steel coils

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Press Machine:

Mass production presses are continuous flow transfer presses. Setof 4 to 5 dies
are mounted on single press & complete panel comes out from press after going
through stamping, trimming & piercing.

189 die sets (including 15 die sets of GMI) 1 die set has avg 4
upper +lower dies

SMED:

Single Minute Exchange of Dies new concept being adopted . This

concept helps in changing of die set up within single digit minute (below 9
minutes) this helps using improving machine utilization & operating efficiency.
Since press machines are very high cost investment & any idle time lost due to
die exchange will be a cost to company.
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Yield improvement
(Ratio of output panel to input coil in weight) is Best amongst the
SMC group Companies. (Presently at 63.2%) Modifications to improve yield
are continuously done & till Oct-09 Press Shop has saved Rs. 7.786 millions of
material in current year
Yield is improved by
1. Reducing the blank size
2. Utilization of scrap for making smaller sheet metal

parts

Steel Coils
Steel coil is raw material used to make body sheet metal parts. These areCRS
coils made of mild steel having thickness from 0.65 mm to 0.8 mm &weight
from 1 ton to 4 tons.

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Steel coils are received in bulk quantities from

i n d i g e n o u s a s w e l l a s foreign suppliers in the ratio of 60 to 40 &
stored at a centralized storage &supplied to blank cutting areas as per
plan
Steel coils are fed to Blanking & ROSL lines by overhead EOT
cranes. Sheet is first de-coiled, cleaned, oiled & fed to cutting or
shearing areas of blanking or ROSL lines.

Blank

Coils are fed to blanking line & continuous supply of

s h e e t t o c u t t i n g d i e s result in shaping of coils to plan blanks.
Blanks are cut by stamping or shearing process & are stacked one by one
to form large mass of blanks
These stacks of blanks are further sent to press machines for
forming into shape of body panels

Panel
Blanks are supplied to press lines for pressing. Blanks are converted to body
panels by this process. Panels are stored in pallets which are supplied
to Weld Shops for making White Bodies.

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WELD SHO
The body panels produced in the press shop and the other small components are
joined here to give the white body or shell. In a typical car body 1400
different components are welded together. The weld shops have the following
facilities.
Welding jigs
Spot welding guns
Kawasaki welding robots
Hemming machines
Punching machines

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PROCESS OUTLINE:
The shop has different lines for different models, each of, which is further
divided into three parts:

UNDER BODY:
Here different underbody panels are welded together. These comprise of rear
underbody, central underbody, front engine room panel. These underbodies are
put on the conveyor and welded together to give the underbody.

MAIN BODY
: As the body moves on, the conveyor roof and side body panels (prepared on
the sub lines) are welded to it to give the main body. The chassis number is
puncheon the cowl top and it is welded to the front engine room panel.

WHITE BODY:
The doors, hood and back door are attached on the main body with the help of
bolts and screws to make it a white body. The body is checked for
dent,
Burr and spatter and these defects are repaired. After inspection and
repairs the body is called WBOK. It is sent to the paint shop thereafter.

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PAINT SHOP

In the paint shop following processes are carried out:

There are five plants/units that provide a uniform painting over the
white body coming from the weld shop. In paint shop all the models are
painted on the same line. The five units are:

Pre-treatment (PT):

The body is thoroughly washed to remove the dirt and oil scales. Then
the body is treated with ZnPO4 (phosphate) to prevent corroding of the body.

ED coat:

This is done by electric deposition method, at 240V-DC supply. After applying

the ED coat the body is baked in oven.

Sol-sealer and under coat:

Here the left in the body (due to welding) are filled with sol-sealer to provide
water proofing. Under coat is done on the surface above wheels to prevent
damage of body in that portion.

Intermediate coat:

This is done by spray-painting method using 10 Kawasaki Robots. After

applying the coat, the body is dried in the oven. Painting done is basically an
intermediate coating to provide base for the final coat.

Top coat: This is done by spray-painting method using 20 Kawasaki

Robots. For metallic coating, double coats are applied and aluminum
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flakes are provided to shine the metallic paints. After inspection and
touch up, the PBOK, i.e. the paint body ok is sent to the assembly shop.
In paint shop II, only ZEN and ALTO are painted. Paint used is Nerolac.
There are 4coatings of paint.1] Phosphate coating2] ED coating3] IC
coating4] TOP coating Inside portion of vehicle is painted manually and
outside is by Robots.
PRE TREATMENT:

Before sending vehicle to painting process pretreatment is done to

ED PAINTING:
ED is electro deposition. Vehicle is dipped in the ED solution. In this around
300V is passed to make paint to be attached. ED is 17% of paint rest is
water and some additives (EDD, M).

PROCESS:

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The whole solution of ED acts as electrolytic solution. Vehicle before coming to

ED dip, it undergoes pre treatment. In that phosphate is done, in which Zn
phosphate is made to attach vehicle body which help in electro deposition, in
this, vehicle acts as cathode and paint as positive ions. When current is passed
paint will be attracted by vehicle till its thickness will be covered. ED is very
accurate to apply. This is about whole process. Rinsing is done after to remove
excessive color. In rinsing industrial water is used which will not be left go
waste. That will be filtered and used again.

ULTRA FILTRATION:
Ultra filtration is the process in which all the rinse pipes and dip tanks will be
filtered and cleaned, by this way water is recycled. Here Osmosis process is
used to filter water.
IC painting:
IC is intermediate coating in which 3 colors are used. They are white, blue and
red. Outside portion of vehicle is painted by robots and inside is done manually.
Paint thickness is taken care, after that vehicle is sent to IC oven. Oven
temperature is 198+/-5C.
TOP COAT Painting:
Top coating is done after checking in Dry sanding II. There are 2 sub coatings
Base coat and Clear coat. Here 11 colors are used; 8 metallic and 3 solid. Only
metallic colors are coated with clear coating. Here also outside portion of
vehicle is painted by robots and inside is done manually. Next vehicle will move
to final inspection and will be sent to assembly.
DRY SANDING
Following repairs are done:
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1. Roof sanding
2. Side repair if any.
Following checking is done:
1. Dosing mark
2. Sanding mark
SOL SEALING LINE:

Sealer appearance is given the preference.

3 types of guns are used.

1 .Pencil gun
2. Flat gun
3. Blind gun
4. Moti gun

In this line followings are checked;

1. Powder dust
2. Extra sealer
3. Pin hole in lamp area
4. Sealer appearance

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77

ASSEMBLY SHOP

In the assembly shop the body is loaded on an overhead conveyor. As the

conveyor moves the body, fitments are made at various stations. There are three
Assembly Shops named ASSY-1, ASSY-2 and ASSY-3. Plant 2 and Plant 3 have
similar setup but in Plant-1 there are separate assembly lines for separate
models. The assembly shop has a continuous production system. The assembly
line can be subdivided into the followings: (a) Trim line

The vehicle proceeds through a series of Trim workstations where team

members begin by installing weather stripping, moldings and pads. Then they
put in wiring, vents and lights. After an instrument panel, windows, steering
column and bumper supports are added; it starts to look less like a shell and
more like a car.

(b)Chassis Line

This is where many safety-related items are installed. Things like brake lines,
torque, gas tanks and power steering are double-checked. The engine is
installed, along with the starter and alternator. Then come suspension and
exhaust systems. Then wheel is mounted with the help of wheel nut fastening
machine.
(c)Final Line

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From there the vehicle enters Final 1, which covers many interior items such as
the Console, seats, carpet, glove box and steering wheel. This is also where
bumpers, tires and the battery are added, as well as finishing touches like covers
and vents. Then, Coolant, Brake oil, Power steering oil are filled and also
the A/C gas are charged.

Features
Different assembly shop layouts are followed to reduce material handling
operations &to facilitate material flow between workstations.
(a) Straight-line layout
Car & Omni line (Assy shop-1): Simplest layout in which material enters at 1
end & leaves at the other end.
(b)U shape layout
Assy shop 2 & 3: Receiving & shipping ends of line are at same end of plant,
due to material handling considerations (same forklift for both needs) or
external needs.
(c)S shape layout
Esteem line (AS-1): Serpentine layout to fit longer assy line in square shop.
Separate door Assy line: - Doors are taken out from the vehicle at the
first station of the trim line. Doors fitted in the final line make working easier.

OTHER SHOPS/DEPARTMENTS

MACHINE SHOP

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The machine shop is the source of all major components for the engine
assembly shop. The un-machined crankshaft and camshaft forgings,
transmission case cylinder head and cylinder block castings are brought in the
form of raw materials from the vendors. The cylinder heads and transmission
case are aluminum castings while crankshaft and camshaft are steel forgings. It
has the following lines:(a)Transmission case line(b)Cylinder head
line(c)Cylinder block line(d)Crankshaft line(e)Camshaft line

ENGINE ASSEMBLY
There are four types of engines which are assembled in the Engine Plant
1. FC Engine Engine with cast iron block
a. M-800b
b. Omnic
c. Altod
d. Wagon-Re
e. Zen Estillo
1. Aluminum Engine Engine with aluminum block
a. Gypsyb
b.SX4c
c. Swift (Petrol)
d. Desire (Petrol
2. KB Engine (New series of engines with aluminum block)
a. A-Star
b. Ritz
3. Diesel Engine

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a. Swift (Diesel)
b. Desire (Diesel)

(6.2) QUALITY ASSURANCE

They had produce high quality products, some of which Maruti had been
exporting to various countries including the Netherlands, Italy, Germany, the
United Kingdom and Switzerland. Maruti was certified with ISO: 9001:2000 in
2001 and aim to achieve the TS-16949 certification. In addition, they had made
the following improvements in terms of producing defect-free products:
DFC OK: Their Direct Final Check OK, or DFC OK percentage, which
signifies the percentage of vehicles that pass through the inspection stages as
defect-free, improved from approximately 77% in March 2002 to approximately
90% in March2004.
Reduction in rejection: Their in-process rejection cost per vehicle, computed
as the ratio of (1) the cost of components rejected due to defects arising during
our production process, to (2) the number of vehicles sold, declined by
approximately 65% from fiscal 2002 to fiscal 2004.
In house warranty: Their in-house warranty costs per vehicle, computed as the
ratio of (1) the aggregate cost of components incurred by us to service warranty
claims arising from operational defects in our manufacturing lines, to (2) the
numbers of vehicles sold in the fiscal year, declined by approximately 85%
between fiscal 2002 and fiscal 2004.A new feather was added recently in
Marutis cap in the field of quality when the Quality Management System of
Its Press Shop & associated functions got certification for conformance to the
requirements of TS16949:2002standard.

Suzuki Quality Management System

Based on a method adopted by Suzuki at its manufacturing facilities, the quality
of a vehicle dispatched from their facility is measured through a quality index
audit on a daily basis. The quality index is a relative measure of quality based
on evaluation of vehicles selected at random on a daily basis. In addition,
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Maruti had recently adopted Suzukis global customer audit index, in order to
provide a more customer-oriented focus to the entire organization, and channel
resources towards customer complaints for rapid response.

Quality Improvement Initiatives

For quality control Maruti had recently introduced:
Tracking surveys and direct customer contact in order to better understand
customer satisfaction levels and customers problems.
Full-time task forces for improvement in initial quality study problems and
departmental cross-functional teams to work on defined problems with
challenging targets.
Quality gates at various stages in order to raise alarms for correction and
immediate action on defects
Fool-proofing, or Pokayoke in Japanese, which comprises checks conducted in
order to prevent defects arising from human error during the manufacturing
process; A real-time feedback system, cross-linked withoverall targets.
The Pica Pica system, which aligns the sequence of components and
vehicles in order to prevent incorrect

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(7.0) ORGANIZATION AND MANAGEMENT

SUMMARY

Maruti has believed, since the very beginning that it is its employees who could
make it into an organization with a difference .Accordingly, as against the
traditional hierarchical System of management, which causes unnecessary
delays in decision-making, we have built up a flat organization with a family
type of atmosphere at our place of work. The company is divided into
different divisions
according
to
the
various
functional areas.A Divisional Manager heads each Division. Divisions are furth
er divided intoDepartments that are headed by Department Managers who
report to the respective

83

(7.1) ORGANIZATIONAL CHART AND STRUCTURE

84

DIVISIONS AND DEPARTMENTS

Corporate Services Division

Legal & Secretarial Department

Corporate Communication Cell
Protocol
Strategic Initiative Group
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Recruitment & Management Compensation

Human Resource Division

Employee Relations Department
Establishment & Time Office
Factory Administration Department
Organizational Development Department

Production Division
Plant- 1
Plant- 2
Plant- 3
Plant- 6 at Manesar

Production Engineering
Production Engineering Division
Production Service Division

Engineering Directorate
QAIN Division
Service Division

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Service- 1-5
MSS (D)
Parts Inspection Division
Engineering Division

Supply Chain division

Supply Chain- 1, 2, 3 Divisions
Shipping & transport Department
Imports Department
Consumables Department

Information Technology Division

Application Group1 (AG1)
Application Group2 (AG2)
Application Group3 (AG3)
Information Technology Strategies (ITS)
IT Operation and Services (ITOS)

Marketing & Sales Secretariat

Marketing Strategy & Development
Marketing
Sales
Exports
Web-IT, E-Commerce

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Spare Parts Division

Spare Parts Procurement
Warehousing & Dispatch
Spare Parts Sales
Accessories

Vigilance Division
Security Wing
Vigilance Wing
Finance Division
Budget, Cost & Accounts Department Income
AccountingThe total project costs, priority, completion time and personnels req
uired wereestimated. Initial plans were drawn up as to how the project would
proceed to its
finalimplementation, while running the existing system so that companys infor
mationneeds were not affected.

(7.2) PERSONNEL PLAN

a. Assess the need for the job and ensure there is adequate funding for it

Review the job description to ensure that it meets the present and future
requirements
Review the person specification to ensure it meets the requirements of
the job description
Design the selection process
Draft the advertisement and select the advertising media
Short list using the person specification only
Interview and test short-listed candidates
Validate references, qualifications and security clearances
Make appointment

88

Managers hold the responsibility for ensuring this framework is followed. HR is

available for advice and will assist in general administration of the recruitment
process.

SELECTION

Decision to Appoint

In selecting the successful candidate, the panel must make a decision based on
the merit and eligibility of the candidates as judged by:

Content of application
Qualifications (if required for the post)
Performance at Interview
Outcome of any selection tests
Right to work in the UK.

The panel must seek to ensure that candidates appointed will actively promote
the IPCCs Core Values.

CHECKS

As part of assessing the merit of each candidate, Managers must satisfy

themselves that the information the candidate gives is authentic, consistent and
honest. This includes being satisfied about information regarding the
candidates:

Application.
Work history.
89

Qualifications [where a qualification is a requirement for the post,

supporting evidence or certification must be obtained from the candidate
and recorded].

Evidence presented at interview.

Human Resources are responsible for processing:

Reference checks.
Security Clearances.
Ensuring the candidate has the right to work in the India.

Should any of these not meet the required standards, HR must immediately
discuss the issue with the Manager.

Training & Development Policies

Maruti Suzuki has a 360 Degree Appraisal system as it consumes less time and
is more effective as communication is much faster.
360 Degree Feedback, also known as 'Maruti Suzukiti Rater Feedback', it is
employee development feedback that comes from all around the employee. The
feedback would come from subordinates, peers, and managers in the
organizational hierarchy, as well as self-assessment, and in some cases external
sources such as customers and suppliers or other interested stakeholders.
The results from 360-degree feedback are often used by the person receiving the
feedback to plan their training and development. The results are also used by
some organizations for making promotional or pay decisions, which are
sometimes called "360-degree review."
360 degree feedback enables leaders to:
90

1. Take advantage of under-utilized personnel strengths to increase

productivity.
2. Avoid the trap of counting on skills that may be weak in the organization.
3. Apply human assets data to the valuation of the organization.
4. Make succession planning more accurate.
5. Design more efficient coaching and training initiatives.
6. Support the organization in marketing the skills of its members.

360 degree appraisal is also a powerful developmental tool because when

conducted at regular intervals it helps to keep a track of the changes in others
perceptions about the employees.
A 360 degree appraisal is generally found more suitable for the managers as it
helps to assess their leadership and managing styles.
This technique is being effectively used across the globe for performance
appraisals. Some of the organizations following it are Wipro, Infosys, Reliance
Industries, Maruti Udyog and HCL etc.
360 degree offers an unprecedented opportunity to the employees than the
traditional top- down approach could ever offer, providing as it does, the
feedback from the broad Swathe of people.

Conflict Resolution Mechanism

Our relationship with the Future Group is essential to our business

model, and we believe that it will operate to benefit of shareholders of
our Company. This relationship may also create conflicts of interest with
respect to potential opportunities between our Company and other
entities within the Future Group.

See Risk Factors -- Conflicts of interest may arise and our failure to
deal with them appropriately could damage our reputation and adversely
affect our business. on page of this Draft Red Herring Prospectus.
We have developed a strategy to seek to minimize potential conflicts of
interest. Our Consultant will constitute an advisory committee (the
Advisory Committee) consisting of its CEO and CFO and at least two
other persons, who will be responsible for screening potential
91

opportunities for conflicts of interest. If any conflict arises with respect

to a business opportunity, the Advisory Committee will consult with the
relevant Future Group entity and our Company and may rely on thirdparty advisors to assist it in resolving such conflict.
In respect of opportunities of strategic importance where operational
control is intended, a right of first offer will be granted to the Future
Group entity operating in the specific industry or sector in which those
opportunities have arisen. For a description of the agreements containing
these right of first offer and conflict resolution arrangements, see the
section titled beginning on page
The Maruti Suzuki has 360 Degree Appraisal System and other
departments are made to directly get in touch with employee to know the
source and problem deeply and find a suitable solution for it.
For the solution of conflicts of upper level management third parties are
selected who are responsible to make the situation under control.

92