PESTEL

ANALYSIS
FOR MARUTI
SUZUKI
Sector :- Automobile Industry
The Indian auto industry The industry accounts for 7.1 per cent of the
country's Gross Domestic Product (GDP)

As of FY 2014-15, around 31 per cent of small cars sold globally are

manufactured in India

The Two Wheelers segment with 81 per cent market share is the leader of
the Indian Automobile market owing to a growing middle class and a young
population

India is also a prominent auto exporter and has strong export growth
expectations for the near future
Political Factors
The company has to follow certain policies established by Indian government
regarding automobile sector. The policies demand to make the company a
source of generating new employment opportunities and to boost the
industrial growth of the state. The company should be able to promote a
healthy global automotive competition and should be productive to provide
the automotive components to international markets. The company is
required to manufacture economical and small cars to target the market of
low income users. The policies ask the company to promote open trade but
with least threat to Indian economy. The company has to deal with the
increment in taxes which make them raise the prices of their products.
Economic Factors
Maruti Suzuki was ranked twentieth in terms of worldwide sales volumes amongst
all automobiles manufacturers across the world. In the year 2002, the company
had the highest sales of 339,964 cars and a market share of 58.6%. (Maruti
Suzuki India Ltd Marketing Essay, 2013)
However, Maruti faces the constant change in oil prices, import and export rate
and exchange rates. The increase in economic growth may increase the buying
potential of the users but the company’s import and export rate gets affected with
the ever changing exchange and tax rates.
Maruti has outdone itself in car sales in India. It holds 55% of the automobile
market of the country. The sales of cars have been increased 8.45% per annum.
Maruti has plans to hit the rural market whose 60% is run on cash. The company
has hired 2,000 sales executives to expand their market in rural area. As far as
the manufacturing department of the company is considered, it has been growing
8-10% per annum since the last few years. More than 70% of the automobiles are
being purchased on credit.
Social Factors
The company has done much work to set up welfare camps. It has offered medical
support and welfare to common people. Maruti took the initiative of establishing its own
driving schools across the country which teaches road attitudes and behavior to
minimize the possibilities of road accidents in India. Maruti has always aimed to design
cars which satisfy the needs of its customers. Cars are taken as status symbols and
Maruti has been working to define these status symbols according to the needs of its
consumers.
The tourism has increased in India due to its strong cultural values and its cricket.
Maruti has a lot of potential to increase its market due to afore mentioned social
factors. The company has launched a brand called MARUTI GENUINE ACCESSORIES
which offers stereo systems, body covers, carpets and other car care products to all its
consumers throughout the country.
Technological Factors
Maruti is famous for its designs of small and fuel-efficient cars. The
company has launched CNG kit for ALTO which is its highest selling
product. The company invests a lot in its R&D to increase the engine
development work in India. The company has added Virtual Design
Review (VDR) to its R&D to have practical substantiation to decrease
the cost of development and cycle time. Maruti has developed many
alternate fuels like LPG/CNG/HYBRID system for MPI engine. The
government of India is promoting National Automotive Testing and
R&D Infrastructure.
Environmental Factors
Maruti Suzuki has been practicing 3R for a long time which includes reduce, reuse
and recycle. The company follows the laws set by the government on emission of
fuels and safety. The company promotes the sales car parts which can be reused
and recycled. With the technology of alternate fuels, Maruti has launched the Hybrid
cars which are eco-friendly and economical as well. The company still has a long way
to go to accomplish environmental friendly goals but at the same time it has to follow
the industrial norms.
The company took an environmental friendly initiative in August 2010 to introduce
factory fitted CNG option across vehicle segments of 5 models including Eeco, Alto,
Estilo, Wagon R and Sx4. Maruti became the first company in India to introduce CNG
fitted engines.
Law/Legal Factors
The company follows the highest standards of Corporate Governance.
The company has enabled its consumers to make contact with the
Secretarial & Legal department anytime for any queries. The board of
the company goes through the legal compliance reports periodically
to check and rectify if there are any non compliances with the laws of
the company. The company has even developed the software which
assigns different compliance to each individual. The software helps in
monitoring the compliances activities going throughout the company.
The company deals with the international trade and has to follow the
laws of the country with which it is trading, which consequently
affects the business.