Long report assignment

Submitted by :

ANUPAM SHARMA

221030

Executive summary

Maruti Udyog Limited (MUL) was established in February 1981, though the

actual production commenced in 1983 with the Maruti 800, based on the

Suzuki Alto kei 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were both around 25 years out of date at that point.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 Suzukis 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.[citation needed] 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 name="marketshare" all cars sold in India are

made by Maruti. The company is currently 56.21% owned by the Japanese

multinational 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.[citation needed] 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.

The report talks about the performance of the company during g the recession

and how its came out of the slump by introducing new passenger car called

ertiga .

Report also states the new possibilities into he market and also the available

threats to the company and how can maruti overcome the threats.

Findings suggest the new possible areas to focus upon and also the weak

points of the company .

Introduction

Overview

Maruti Suzuki India Limited is indias no.1 car manufacturer in india ,

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.

Maruti Suzuki manufactures and sells a complete range of cars from the

entry level Alto, to the hatchback Ritz, A-Star, Swift, Wagon R, Zen and

sedans DZire, 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 vehicle in India.

Relationship between the Government of India, under the United Front

(India) coalition and Suzuki Motor Corporation over the joint venture was a

point of heated debate in the Indian media until Suzuki Motor Corporation

gained the controlling stake. This highly profitable joint venture that had a

near monopolistic trade in the Indian automobile market and the nature of

the partnership built up till then was the underlying reason for most issues.

The success of the joint venture led Suzuki to increase its equity from 26%

to 40% in 1987, and further to 50% in 1992. In 1982 both the venture

partners had entered into an agreement to nominate their candidate for the

post of Managing Director and every Managing Director will have a tenure

of five years

Maruti Suzuki has 933 dealerships across 666 towns and cities in all states

and union territories of India. It has 3,013 service stations (inclusive of

dealer workshops and Maruti Authorised Service Stations) in 1,436 towns

and cities throughout India. It has 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.

Relevance of study

This study finds about the position of the company , growth of the company ,

its various functions around the world , what work does it performs , how the

people involved affects the company and its functions , how does the company

performs against its competitors . The study tries to find out the current

position of the company in the current scenario.

Objective

The objectives of the study are:

Companys current position in the market

Performance during recession

Future possibilities

How company have grown since the inception

Methodology

There were no primary resources involved in the study, this was complete with

the help of secondary resources like websites, articles etc.

Company analysis

Manufacturing facilities

Maruti Suzuki has two manufacturing facilities in India. Both manufacturing

facilities have a combined production capacity of 14,50,000 vehicles annually.

During a recent meeting of the Gujarat chief minister with Suzuki Motor Corp

chairman & CEO Osamu Suzuki,the Chairman had said that the work on car

manufacturing plant at Mandal near Ahmedabad would be started soon.[54]

Maruti Suzuki to set up second plant in Gujarat; acquires 600 acres

Sales and service network

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 3,013 service stations

(inclusive of dealer workshops and Maruti Authorised Service Stations) in 1,436

towns and cities throughout India.[58] It has 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 Citi 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". Citi 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. Citi

Finance India Limited holds 74% of the stake and Maruti Suzuki holds the

remaining 26%.[66] GE Capital, HDFC and Maruti Suzuki came together in 1995

to form Maruti Countrywide. Maruti claims that its finance program offers

most competitive interest rates to its customers, which are lower by 0.25% to

0.5% from the market rates

Maruti TrueValue

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 341 outlets.

Maruti under recession

The recessionary period has been a huge opportunity for the company to come

out with innovative solutions to grow sales, he said. For example, it focused

more on rural markets, which is now paying dividends. According to Pareek,

more than one-third of total sales now come from that segment. With Ertiga, a

life utility vehicle, the company tapped into the Indian preference for a car

that looks small but offers vast interior space. Yet another initiative has been

to seek feedback from employees on ways to reduce costs. A total of 4 lakh

suggestions came through. The implementation saved the company as much as

Rs 350 crore. Some of the suggestions included an automated car wash system

in workshops and the use of tablets by service professionals while taking

service orders. To transport kits from ports to its facilities, Maruti has opted for

rail in the place of road. The company now sources over 85 per cent of parts by

value from within a 100-km radius of its facilities. Between April and November

this fiscal, Maruti Suzuki sold a total of 6,68,480 car units in the domestic

market, up 1.3 per cent from the corresponding period in the previous year.

Current position and market share

Shares of auto major Maruti Suzuki surged higher in trade and hit 52-week

high after the company beat estimates by reporting better-than-expected

results on Friday. Investors should hold on the stock at current levels and wait

for management comments on growth outlook and foreign exchange rates, say

analysts. The company reported a net profit at Rs 1,150 crore for the quarter

ended March 2013, up 79.6 per cent, against a net profit of Rs 640 crore in the

corresponding quarter last fiscal. Net sales for the fourth quarter increased to

Rs 13,056 crore, up 13.62 pe rcent, from Rs 11,490 crore in the same period

last fiscal.

Findings

Maruti is the leader in the passenger vehicle market but its share has been

dropped since 2009 as can be seen from the table, this has happened because

of the new competitors into the market , the main threat to the maruti is

companies like Toyota & Volkswagen.

Suggestions

Looking at the current market scenario companies like Mahindra are snatching

the market share on the power of their SUV market, Indias SUV market is

growing hence maruti shall take this step of jumping into SUV market as well .

Indias SUV market has seen huge potential.

Limitations

The study is limited by the scope of the data available on the internet and from

the annual report .