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A REPORT

ON
N2N LEASING
(COMPLETE FLEET SOLUTION)

By:
AASHISH TOMAR
Roll No-006 MBA

Maruti Suzuki India Limited (MSIL)

SUMMER TRAINING REPORT SUBMITTED TOWARDS THE PARTIAL FULFILLMENT OF


MASTERS OF BUSINESS ADMINISTRATION

ON
N2N LEASING

SUBMITTED BY
Aashish Tomar
MBA

SUBMITTED TO
Mr. SAMEER
Sr.Manager
Marketing

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DECLARATION BY CANDIDATE

I hereby declare that the dissertation entitled N2N LEASING is an original and authentic work done
by me for the partial fulfillment of Masters of Business Administration, conducted under the
supervision of Mr. Sameer (Mentor).

I further declare that to the best of my knowledge the dissertation does not contain any part of any work
done previously and is purely genuine and original to the best of my knowledge which has not been
submitted elsewhere.
Aashish Tomar
Manav Rachna International University

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ACKNOWLEDGEMENT

A successful project can never be prepared by the singular effort of the person to whom the project is
assigned but it also demands the help and guardianship of some conversant people.
I Aashish Tomar , student of Manav Rachna International University,would like to express my
thanks fullness to my parents & family members, who have constantly supported & encouraged me in
shaping my career.

I take this opportunity to express my deep gratitude to , which gave me the opportunity to do this project
in his esteemed organization, MARUTI SUZUKI INDIA LIMITED.
I would like to thank to my internal Project Guide MR. Sameer (Manager- Marketing, MSIL) who
really helped me a lot by giving their precious time and valuable suggestion for consolidating the data,
present the findings and complete the project in its best possible manner.
I would like to thank my Faculty guide MR. MADAN (PASCO) who gave his valuable guidance
throughout the training period.
I would
like to thank all the respondents without the cooperation of whose, my study would not have been
possible.
With profound sense of gratitude, I acknowledge my sincere thanks to all of my friends and family for
this kind of consideration, I am beholden to them in a special measure.

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Table of Contents
Contents

Page No

1. Executive summary...8
2. Introduction.11
2.1 Key Statistics.12
2.2 Current Scenario12
3. Maruti Suzuki Overview.14
4. Title of Project ...17
5. An overview on leasing
6. Scenario:current & changing
7. Opportunity.
8. Business objective....

EXECUTIVE SUMMARY

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I Aashish Tomar had been given an opportunity to work in Maruti Suzuki India Ltd., in Marketing
and sales Department, which has been an enriching experience at both the personal and the academic
level.
Maruti Suzuki India Ltd (formerly Maruti Udyog Ltd) is India's largest passenger car company,
accounting for over 40 per cent of the domestic car market. The company offers full range of cars from
entry level Maruti 800 & Alto to stylish hatchback Ritz, Celerio, Swift, Wagon R, Estilo and sedans
DZire, SX4 and Sports Utility vehicle Grand Vitara. The company is a subsidiary of Suzuki Motor
Corporation of Japan. The company is engaged in the business of manufacturing, purchase and sale of
motor vehicles and spare parts (automobiles). The other activities of the company include facilitation of
pre-owned car sales, fleet management and car financing. They have two plants, one is located at Palam
Gurgaon Road, Gurgaon, Haryana and one located at Manesar Industrial Town, Gurgaon, Haryana.
.
2. INTRODUCTION
The automotive industry in India is one of the largest markets in the world. The automotive sector is a
vital sector for any developed economy. It drives upstream industries like steel, iron, aluminum, rubber,
plastics, glass and electronics and downstream industries like advertising and marketing, transport and
insurance. It had previously been one of the fastest growing markets globally, but is currently
experiencing flat or negative growth rates. Indias passenger car and commercial vehicle manufacturing
industry is the sixth largest in the world, with an annual production of more than 1.81 million units in
2013. According to recent reports, India over Brazil and became the sixth largest producer in the world
(beating such old and new auto makers as Belgium, United Kingdom, Italy, Canada, Mexico, Russia,
Spain, France, and Brazil), grew 16 to 18 percent to sell around three million units in the course of 2011
and 2013. In 2009, India emerged as Asias fourth largest exporter of passenger cars, behind Japan,
South Korea, and Thailand. In 2010, India beat Thailand to become Asias third largest exporter of
passenger cars.
India represents one of the worlds largest car markets. Easy availability of finance and rising income
levels are encouraging the middle class population to choose from the vast range of passenger vehicles.
The Indian auto industry has been recording tremendous growth over the years and has emerged as a
major contributor to the Indias gross domestic product (GDP). The industry currently accounts for
almost 7 per cent of the countrys GDP and employs about 19 million people both directly and indirectly.
In addition, with Governments backing and a special focus on exports of small cars, multi utility
vehicles (MUVs), two and three wheelers and auto components, the automotive sectors contribution to
the GDP is expected to double reaching a turnover worth US$ 145 billion in 2016, according to the
Automotive Mission Plan (AMP) 206-2016.
As of 2010, India is home to 40 million passenger vehicles. More than 3.7 million automotive vehicles
were produced in India in 2010 (an increase of 33.9%), making the country the second (after China)
fastest growing automobile market in the world in that year. According to the Society of Indian
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Automobile Manufacturers, annual vehicle sales are projected to increase to 4 million by 2015, no
longer 5 million as previously projected. The majority of Indias car manufacturing industry is based on
three clusters in the south, west and north. The southern cluster consisting of Chennai is the biggest with
35% of the revenue share. The western hub near Mumbai and Pune contributes to 33% of the market and
the northern cluster around the National Capital Region contributes 32%. Chennai, houses the India
operations of Ford, Hyundai, Renault, Mitsubishi, Nissan, BMW, Hindustan Motors, Daimler, Mini and
Datsun. Chennai accounts for 60% of the countrys automotive exports. Gurgaon and Manesar in
Haryana form the northern cluster where the countrys largest car manufacturer, Maruti Suzuki, is based.
The Chakan corridor near Pune, Maharashtra is the western cluster with companies like General Motors,
Volkswagen, Skoda, Mahindra and Mahindra, Tata Motors, Mercedes Benz, Land Rover, Jaguar
Cars,Fiat and Force Motors having assembly plants in the area. Nashik has a major base of Mahindra
and Mahindra with a SUV assembly unit and an Engine assembly unit. Aurangabad with Audi, Skoda
and Volkswagen also forms part of the western cluster. Another emerging clusters is in the state of
Gujarat with manufacturing facility of General Motors in Halol and further planned for Tata Nano at
their plant in Sanand Ford, Maruti Suzuki and Peugeot- Citroen plants are also set to come up in Gujarat.
Kolkata with Hindustan Motors, Noida with Honda and Bangalore with Toyota are some of the other
automotive manufacturing regions around the country.
In 2011, there were 3,695 factories producing automotive parts in all of India. The average firm made
US$6 million in annual revenue with profits close to US$400 thousand.

2.1 Key Statistics:


The auto industry produced a total 1.81 million vehicles, including passenger vehicles, commercial
vehicles, three wheelers and two wheelers in February 2014 as against 1.73 million in February 2013,
registering a growth of 4.41 per cent over the same month last year. The increase continues to be on
account of growth in two wheelers production. Moreover, the overall domestic sales during April
February 2014 grew marginally by 2.68 per cent over the same period last year.
The passenger vehicles production in India is expected to reach 10 million units by 202021. The
industry is estimated to grow at a compound annual growth rate (CAGR) of 13 per cent during 2012
2021. In addition, the industry is projected to touch US$ 30 billion by 202021, according to data from
Automotive Component Manufacturers Association (ACMA).
The cumulative foreign direct investment (FDI) inflows into the Indian automobile industry during the
period April 2000 to January 2014 was recorded at US$ 9,344 million, an increase of 4 per cent to the
total FDI inflows in terms of US$, according to data published by Department of Industrial Policy and
Promotion (DIPP), Government of India.
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The overall automobile exports grew by 6.39 per cent during AprilFebruary 2014. Passenger vehicles,
three wheelers and two wheelers registered growth at 6.44 per cent, 16.40 per cent and 5.41 per cent
respectively, compared to the same period last year.
2.2 Current Scenario:
The Indian Automobile Industry is manufacturing over 11 million vehicles and exporting about 1.5
million every year. The dominant products of the industry are two wheelers with a market share of over
75% and passenger cars with a market share of about 16%. Commercial vehicles and three wheelers
share about 9% of the market between them. About 91% of the vehicles sold are used by households and
only about 9% for commercial purposes. The industry has attained a turnover of more than USD 35
billion and provides direct and indirect employment to over 13 million people.
The supply chain of this industry in India is very similar to the supply chain of the automotive industry
in Europe and America. This may present its own set of opportunities and threats. The orders of the
industry arise from the bottom of the supply chain i.e. from the consumers and goes through the
automakers and climbs up until the third tier suppliers. However the products, as channeled in every
traditional automotive industry, flow from the top of the supply chain to reach the consumers.
Interestingly, the level of trade exports in this sector in India has been medium and imports have been
low. However, this is rapidly changing and both exports and imports are increasing. The demand
determinants of the industry are factors like affordability, product innovation, infrastructure and price of
fuel. Also, the basis of competition is the sector is high and increasing and the life cycle stage is growth.
With a rapidly growing middle class, all the advantages of this sector in India are yet to be leveraged.
Note that, with a high cost of developing production facilities, limited accessibility to new technology
and soaring competition, the barriers to enter the Indian Automotive sector are high and these barriers
are study. On the other hand, India has a well-developed tax structure. The power to levy taxes and
duties is distributed among the three tiers of Government. The cost structure of the industry is fairly
traditional, but the profitability of motor vehicle manufacturers has been rising over the past five years.
Major players, like Tata Motors and Maruti Suzuki have material cost of about 80% but are recording
profits after tax of about 6% to 11%.
The level of technology change in the Motor vehicle Industry has been high but, the rate of change in
technology has been medium. Investment in the technology by the producers has been high. Systemsuppliers of integrated components and sub-systems have become the order of the day. However, further
investment in new technologies will help the industry be more competitive. Over the past few years, the
industry has been volatile. Currently, Indias increasing per capita disposable income which is expected
to rise by 106% by 2015 and growth in exports is playing a major role in the rise and competitiveness of
the industry.
Tata Motors is leading the commercial vehicle segment with a market share of about 64%. Maruti
Suzuki is leading the passenger vehicle segment with a market share of 46%. Hyundai Motor India and
Mahindra and Mahindra are focusing expanding their footprint in the overseas market. Hero Honda
Motors is occupying over 41% and sharing 26% of the two wheeler market in India with Bajaj Auto.
Bajaj Auto in itself is occupying about 58% of the three wheeler market.
Consumers are very important for the survival of the Motor Vehicle manufacturing industry. In 2008-09,
customer sentiment dropped, which burned on the augmentation in demand of cars. Steel is the major
input used by manufacturers and the rise in price of steel is putting a cost pressure on manufacturers and
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cost is getting transferred to the end consumer. The price of oil and petrol affect the driving habits of
consumers and the type of car they buy.
The key to success in the industry is to improve labor productivity, labor flexibility, and capital
efficiency. Having quality manpower, infrastructure improvements, and raw material availability also
play a major role. Access to latest and most efficient technology and techniques will bring competitive
advantage to the major players. Utilizing manufacturing plants to optimum level and understanding
implications from the government policies are the essentials in the Automotive Industry of India.
Both, Industry and Indian Government are obliged to intervene the Indian Automotive industry. The
Indian government should facilitate infrastructure creation, create favorable and predictable business
environment, attract investment and promote research and development, the role of Industry will
primarily be in designing and manufacturing products of world-class quality establishing cost
competitiveness and improving productivity in labor and in capital. With a combined effort, the Indian
Automotive industry will emerge as the destination of choice in the world for design and manufacturing
of automobiles.

2.3 Industry Performance :


The overall growth in domestic sales during April-March 2013 was 2.61 percent over the same period
last year. While in March 2013 overall sales fell by (-) 7.76 percent over March 2012.
Passenger Vehicles segment grew at 2.15 percent during April-March 2013 over same period last year.
Passenger cars declined by (-) 6.69 percent, Utility Vehicles grew by 52.20 percent and Vans grew only
by 1.08 percent during April-March 2013 as compared to the same period last year. However, in March
2013 passenger car sales further declined by (-) 22.51 percent over March 2012. Total passenger
vehicles sales also declined by (-) 13.01percent in March 2013 over same month last year.

Automotive Clusters in India:

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Figure 2.1 Automotive cluster in India


The manufacturing plants of auto-components players in India are usually located near the OEM
customers. Above Figure therefore also indicates the major auto clusters in India. As seen from the
figure, the automotive clusters in India are widely spread and with a certain state having the lead in
attracting auto investments.
The difference that these states makes from being a cluster site are :
Existing pool of specialized and skilled workforce
Provides a deep and specialized supplier base
Preferred access to extensive market
Supportive state government policies

2.4 Segments of Automobiles Industry


A 3-million huge industry cannot be devoid of some classical segmentization. Indias passenger car
industry is broken down into multiple segments. This is done for ease of understanding and improved
competition among manufacturers to get bigger pies of particular segments. The Indian automobile
market can be divided into several segments viz., two wheelers(motorcycles, geared and ungeared
scooters and mopeds ), three wheelers, commercial vehicles (light , medium and heavy), passenger cars,
utility vehicles(UVs) and tractors. This classification is made by the SIAM and is followed worldwide.
Society of Indian Automobile Manufacturers (SIAM) is the apex Industry body representing 46 leading
vehicle and vehicular engine manufacturers in India. SIAM is an important channel of communication
for the Automobile Industry with the Government, National and International organizations.
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Out of these, each individual segment has been further sub-segmented into various categories -either on
the basis of length, price or engine power. Indias passenger car industry is broken down into multiple
segments.

Source: ACMA, India

1. MARUTI SUZUKI Overview:


Maruti Suzuki India Limited (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 market.
Although the Indian car industry was established in the late forties, there was little growth or technical
progress, as passenger cars were given very low priority in the scheme of Centralized Economic
Planning. In the 1980s, the car industry was undergoing technological stagnation and was characterized
by low production volumes, high cost and low productivity. The consumer had very little growth and the
market was selling just around 30,000 cars per year.
There was a clear need to provide a cost effective, reliable and quality car to the customers. Maruti
Suzuki India Limited was incorporated in such a scenario as a fully owned Government Company on
February 24, 1981 with a resolve to bring about expansion and technological modernization, of the
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automobile sector. The MSIL, when stared was entrusted with the task of achieving the following policy
objectives:
Modernization of Indian Automobile Industry
Production of Vehicles in large volumes, which was necessary for economic growth.
Production of Fuel-efficient vehicles to conserve scarce resources.

Choice of product and collaborator to achieve the above objectives one of the foremost tasks before.
Maruti Suzuki India Limited was to determine the most suitable product mix and to select the most
suitable foreign partner who would be willing to accept MSIL s requirements in terms of product mix,
technology transfer, and equality participation and had the required technological expertise and
experience in producing high quality, reliable and fuel efficient vehicles.
After extensive discussion with several major European and Japanese car manufacturers, MUL chose
Suzuki Motor Corporation (SMC) which further increased its equity holding to 50% in the year 1992,
converting Maruti Suzuki India Limited, into a Non-Government Company with a total Equity base of
Rs 1322.92 million.
A License and a Joint Venture Agreement was signed with Suzuki Motor Company of Japan,
in OCT. 1982
Market leader with over 40% Share in Domestic Car Market Exporting cars to over 70
countries around the world including most advance Western European Markets.
Maruti has revolutionized the Indian Automobile and Component Industry and has set
standards in quality of products and service.

2. Statistical View of the Industry:

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100%
90%
80%

55.1

61.4

70%

60.5

58.7

60%

COMPT.
MSIL

50%
40%
30%

44.9

38.6

20%

39.5

41.3

10%
0%

2010-11

2011-12

2012-13

2013-14

Fig 4.1: Overall statistical view of MSIL against competition


From the Past record sheet, the sales of MSIL (Maruti Suzuki India Limited) are tracked against its
COMPT. (i.e. Competition Market). The sales figure of MSIL is now in the increasing phase with the
launch of its new products and due to the increased no of Maruti certified Service Stations
Maruti Installed Capacities :

PLANT 1 300,000 units


PLANT 2 300,000 units
PALNT 3 300,000 units
PLANT 4 200,000 units
PLANT 5 150,000 units

Fig 4.3: Statistical view of A2 segment

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Title Of the Project:

N2N LEASING
Project Objectives:

STUDING ABOUT N2N LEASING(Week 1-2)

Doing different visits (doctor, Business man ,etc) those how make balance sheet (SME)
(Week 3-4)

Target and achievement ,studing ciaz customer profiling

(Week 5-6)

WHAT IS A LEASE?

A type of financing in which a new vehicle is taken on lease for fixed term (2-5 years)

Lease rental/EMI is calculate on an estimated market value expected at the end of the
lease .

Fleet management part of lease rental includes cost of services viz. Insurance,
maintenance & Repairs and other value-added service

Customer pays fixed monthly lease rentals and is insulated against any unexpected
expenses during the lease.

At the end of lease , the car is returned back to the lease company .

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WHAT IT MEANS FOR AMARUTI CUSTOMER?

100% ex-showroom funding


Maximum tax benefit on lease rental
Risk coverage for resale and maintenance
Use and return | pay for use
Cost efficient for business
Single monthly payment

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SCENARIO: CURRENT &CHANGING


Global view | SME Market

REASONS FOR SLOW GROWTH OF LEASE IN INDIA

Limited awareness of leasing of concept and its benefits not enough feet on street.
Lease product not available for mass market Restricted only to large corporates in metros.

INDIA : CHANGING SCENARIO

Frequent car launches leading to increased choice amongst buyers


Reducing average age of car buyer in india
Attractive car exchange schemes giving boost to new car sales
Multiple car per family.

FOR CUSTOMER SEGMENTS: SMEs/SELF EMPLOYED/CORPORATES


Increasing financial literacy and importance of healthier balance
sheets
Look for convenience/ Ease of single Window Solution For Fleet
Simplified Budgeting/ Single monthly invoice
Immunity from vehicle related risk (Maintenance, Resale)

CURRENT LEASING APPLICATIONS


Leasing is predominantly used by following segments:

Multinational companies

Large Indian Corporate Houses


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Public Sector Understandings


To meet their vehicle needs for:

Senior Executives

Tool for Trade & Business Vehicles

Logistice(Goods and People Movement)

Market Opportunity: All India


SMEs
80,000 Small and medium firms registered with MSMEs
Total MSMEs(unregistered): 4.5 cr
SELF EMPLOYED PROFESSIONALS
Doctors / 2 Lac clinics
Chartered Accountants / 1.2 Lac CA Firms
Architects / 40 K Design Firms
CORPORATES & PSUs
Corporate / 5,000 BSE/NSE listed
PSUs/ 240 Central PSUs

MSIL OBJECTIVES
Creating customers for life!

Encourage use & return

Generate repeat sales

Quality Experience for Customer

Customer insight- real time MIS to improve

Customer satisfaction

First mover Advantage


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Opportunity to realize volume from a new segment

Incremental sales

DEALER OBJECTIVES
Creating customers for life!

Captive business for vehicle insurance, service and repairs through the life of the car

Generating Incremental Sales

Realize volume from a new segment and product offering

Competency building

Generate sales via Outbound Sales (non-showroom)

STEPS FOR SUCCESS


o Active initiative to promote a new vehicle acquisition concept
o Adopting a different sales approach
Feet on street for better reach
o Introducing attractive schemes for lease customers
o Direct Marketing initiatives to create a strong lead pipeline
DEALERSHIPS EXPECTATION
o Competitive lease product which is beneficial to customer
o Product Sales support / Training & hand holding
o Healthy margins / Sustainable revenue model
o POP material & branding / Regular activity support
o Target setting & performance review / Incentive schemes
DEALERSHIPS ROLE
o Execution of MSILs Marketing Plan for leasing
o Dedicated Leasing Teams at dealerships
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o Coordination for Agreement Execution / closure of sales


o Relationship management with customer throughout the lease term
o Post-sales support as per agreement signed with MSIL and Leasing Partner
o Ensure repeat sale on best effort basis at the end of lease
ROLE OF MSIL
o Select dealerships to create network for lease offerings
o Bring on board leasing & fleet management expertise
o Brand promotion and development of marketing collateral
o Training
o Direct marketing initiatives to generate leads
o Target setting & reviews
o Incentives schemes
ROLE OF LEASE PARTNER
o Offer competitive lease product
o Signing of SLAs with dealership
o Provide contact centre support to dealer sales team
o Maintain TAT (turn around time) for credit appraisal
o MLA (lease agreements) Signing with SMEs
o Releasing of PO & timely payments to dealership

SUPPORT FROM MSIL


o Strategic tie-ups with local trade agencies
o SME Leads via MSIL customer contact centre
o Training (& Refresher Trainings) on Leasing
o Point-of-Purchase collateral & sales brochures
o Pre-calculated lease rate lists
o Support on queries related to product, credit evaluation, lease rates, etc.
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TARGET
o 25 SIC per month per DSE
o 02 MLA per month per DSE
o 05 Car deliveries per month per DSE ( lease to SMEs)
o 10 car deliveries per month (retail to SMEs)

WHAT WE WANT TO ACHIEVE?


To become market leader in car leasing by

Signing 2,000 MLAs

Selling 5,000 cars through leasing plus tapping into B2c opportunity

Relationship with 20,000 SMEs

.. In year 1!

MSILs EXPECTATIONS
1.

Dedicated Manpower

Minimum 02 DSEs with 5 years experience

Attractive incentive schemes

2. Effective reporting structure

Team reporting to sales manager / GM

GM to report to CEO on weekly basis on progress

3. 360 Degree Services to Customers

Sales, service, value-added services

4. Lease Help-Desks to be set-up at SME Association

Tie up with local associations, BTL activities


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5. Target achievement

SIC, MLA, retail

WHAT IS A LEASE?
1. A type of financing in which a new vehicle is taken on lease for a fixed term (2-5 years)
2. Lease rental / EMI is calculated on an estimated market value expected at the end of the
lease
3. Fleet Managemet part of lease rental includes cost of services viz. Insurance, Maintenance &
Repairs and other value added servives
4. Customer pays fixed monthly lease rentals and is insulated against any unexpected expenses
during the lease
5. At the end of lease, the car is eturned back to the lease company

WHAT IT MEANS TO A MARUTI CUSTOMER?


1. 100% ex-showroom funding
2. Maximum tax benefit on lease rentals
3. Risks coverage for resale and maintenance
4. Use and Return / Pay for Use
5. Cost efficient for business
6. Single monthly payment

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