Market Share / Reasons for decline

Admitting that the lack of diesel engine options was a weakness for MSIL, Mr Nakanishi
said a higher power 1.3 litre Fiat-sourced power plant would be assembled by the
Suzuki's powertrain division in India starting January. This would be used in the diesel
SX4.

In the March quarter, Maruti saw its market share decline by over 400 basis
points year-on-year and 130 basis points sequentially to 41.5 per cent due to
competition and capacity constraints. Maruti has been facing intense
competition in the A2 segment (over 70 per cent of its sales) due to recent
launches of new models such as Volkswagen Polo, Chevrolet Beat and Ford
Figo. All these were launched in the March quarter and priced in the Rs 3.5-
4.5 lakh range. Maruti is hoping that the new WagonR, priced between Rs
3.28 lakh and Rs 3.81 lakh, will arrest the decline in market share in a
segment that has as many as 20 models trying to outdo each other.

The road ahead might get tougher for the small car leader as Nissan and
Toyota plan to launch their Micra and Etios models, respectively. These
premium hatchbacks, to be launched in the current financial year, could give
Maruti's higher-end hatchbacks (Swift and Ritz) arun for their money.
The SUZUKI Collaboration

Suzuki Motor Company was chosen from seven prospective

partners worldwide. This was due not only to their undisputedleadership in small cars
but also to their commitment toactively bring to MUL contemporary technology and
Japanesemanagement practices . A license and a Joint Ventureagreement was signed
between Govt of India and SuzukiMotor Company (now Suzuki Motor Corporation of
Japan) inOct 1982
€ Suzuki brought efficient management practices,better
technology andadministration.
€ Initially Suzuki held the 26% stake in Maruti Suzuki
 T h e C h a n g i n g A u t o I n d u s t r y

After year 2000,(and 2003 to be more

precise)there was a change in automobile
market which where due to-
1. The governmenthas reduced regulation onthe industry and more foreign players
wereinvited.
2. Banks and other financing companiesstarted providing car loans at reasonableinterest
rate

Impacts

The Indian consumer now started buying the mid-size cars rather than small cars
,the luxury cars also gained popularity, SUVs also started coming in themarket. The
increasing level of income of urban people ,the small cars were not considered
to be luxury item any more
Car Segmentation

Segment Price Range Cars

A < 3.0 lacs Maruti800, Omni, Reva
B 3.0 -5.0 lacs Wagon R, Zen, Versa, Ambassdor, Fiat
Palio, Esteem, Tata Indica, Indigo

C 5.0-10.0lacs Baleno, Elantra, Honda City, Lancer,

Innova, Sx4

D 1 0 .0 -1 5 .0 lacs Octivia, Corolla, Civic

E 1 5 .0 - 30 .0 lacs Honda CRV, Maruti Grand Vitara,
Honda Accor