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INDUSTRY PROFILE

HISTORY OF INDUSTRY:
In 1769, a French engineer CAPTAIN NICHOLAS built the first load vehicle propelled by its own power. It was a three-wheeler, four seated vehicle fitted with steam engine. It attained a speed of about 21/2 M.P.H for 15 minutes.

The first car was built by LENIOR in 1862. His innovation was a compact of the internal-combustion engine powered by gas. Petrol-powered version soon followed, and the design was widely adopted.

The first mass production car, the model T Ford, was introduced in 1908, and by 15 million gad been sold. Todays engine works on similar principles, although card now are designed for greater efficiency, safety and comfort. In 1920s the major developments were made in every carry features. The designers tried to produce a vehicle which will function at all conduction and which were comfortable to ride and easy to operate.

Increase life of types, independent, front wheel suspension, for wheeler hydraulic brakes, high compression ratio, high power, use of new materials and hundreds of other changes have been made.

EMERGENCE OF NEW PASSANGER CAR INDUSTRY:


Todays engines work on similar principles, although card now are designed for greater efficiency, safety and comfort. Modern engines consume less fuel as a result if computerized ignition systems, fuel injector and multi-valve cylinder heads. Exhaust pollution is reduced by catalytic converters, while body shells with controlled stiffness, toughened windscreens, and airbags improve safety. Coil spring suspension, pneumatic seats enhance passenger comfort. In recent years, the passengers car chassis construction has been forced to shape itself redesigned bodies. While in the field of truck design, problems of body-chassis now get simultaneous consideration to a great extent than before. Fluid play wheels, free-wheeling over drives, automation transmission and many other newer features are in the todays car.

The diesel engine was invented only a few years after the spark ignition engine cars came into existence. Car provided the facility to the owners that are safe, easier to drive, more reliable and comfortable.

The emergence of a new passenger car industry has been shown in figure. There some factors such as new generation of engines, entry of foreign players, manufacturing technologies, value added services, changing structure of demand, regulatory framework at all.

EMERGENCE OF A NEW PASSANGER CAR INDUSTRY:

Distribution systems: Changing Relationship of manufacturers with dealers and suppliers. Auto finance: Better /cheaper schemes tie ups between manufacturers and financiers, Regulatory framework: Removal of QRs, straight environmental standards

New Generations of engines:Multipoint fuel injection, turbo-charging common Rail direct injection

Entry of foreign Manufactures

Manfacturin g techonologie s: flexible manufacturin g systems. Emergence of a new Passenger car Industry Components: Tierisation, Tyres, Radials, Retreading Value added service: Development of vibrant used car market, leasing and fleet management Materials: Lowservices, car financing weight, synthetic components

..

Changing structure of demand: Change in the industry segmentation, increased preference for compact and midsize cars.

Fig-1.2

PRESENT MARKET SCENARIO:


Looking back over the year just gone is always an absorbing experience. 2007 was another eventful one in an industry at the forefront of some of the mega trends of our time.

Developing countries with big populations are irresistible to many firms looking for new customer and low-cost suppliers. Chinas market kept on growing, but attention moved increasingly to India also. If low-cost cars are the key to these markets, Renaults Logan has stolen a march. But thats far from the end of the story. Ratan tatas imminent 1 - Lakh car could be another very important chapter and Renault itself wants to do a smaller son of Logan.

In India the first car ran on the streets of Mumbai in 1898. Today more than 1 million cars are being sold in India every year. Every Indian dream of owning a car. The purchasing power of consumers has increased rationally. The demand of passenger cars has surged as compared with the previous years.

Now Mahindra and Mahindra India is a huge potential market for many global players. Domestic players like Maruthi Suzuki, Tata and facing a tough competition in the market. The demand of passenger car has shown in figure.

For the past five decades the Indian automobile manufacturer had enjoyed a protected market and the need to upgrade the out dated technology did not arise. The Indian customers have to satisfy with just few models such as Ambassador Car and the Fiat.

It was the sellers market was the Indian customers had no choice but to accept whatever these manufacturers offered. It was a measure of protection offer to them, not a single new model of design was introduced in India.

CAR MARKET IN INDIAN SCENARIO :


A new age has dawned for the Indian automobile industry and everybody is riving about new cars. The days of absolute monopoly in the Indian automobile market is over. car dont worry about it. The options that you made in second hand It is a battle field here competing companies are trying to be one up over the other with the revolutionary offers it proves that todays market is mostly a buyer one. If u cant buy a brand new market have been unheard of before.

The Indian passenger car market has reached a stage, which no body would have thought of few years back. The industry is fast adapting to the changing times cars are looking more beautiful, learner and technologically It is

a totally new concept that we are witnessing towards the start of the year 2000. In

the previous scenario the manufacturers boldly passed on the costs incurred during inefficient production to the buyer by hiking the products price.

But all that is past and now cars are available off the shelf and quality is the buzzword. Whats more, buyers are looking for quality at a competitive price. To meet the customers demands and expectations, companies are diligently introducing new models at reasonable costs at short intervals.

The industry truly looks off, as in a flurry of activity; nearly all the major players announced plans to enter the market. Mercedes tied up with Telco, to produce the E-220 and the 250-D. General motors tied up with Hindustan motors to manufacture the Opel Astra. Ford tied up with Mahindra & Mahindra established Mahindra Ford assembles the food Escort in Nasik. Hyundai entered India through a 100 percent owned subsidiary to manufacture, Santro followed by Mitsubishi Lancer. Honda recently tied up with Hero motors to make the Honda city and Telco launched its own indigenous car the Indica. Finally Toyota is all said to enter the India market.

LIBERALISATION POLICY:
In 1991, the government of India announced an economic policy package and initiated measures, which may be said to have brought about a qualitative change in the pattern of government business relation ship and statically alerted the character of business of environment. The policy changes involve far reaching structural reforms aimed at leading Indian trade and industry away from a regulatory and protective regime to market oriented, competitive environment.

The entry of MNCs a growth of foreign companies; domestic product markets are being increasingly subjected to forces of competition. It was in July 1991 that the liberalization of economic policy started in real terms. India opens many gates to foreign investors who are seriously looking for untapped markets to prop up the sagging Global passengers car segment. Most of the automobiles MNCs entered into joint ventures with existing Indian automobile manufactures and simply used up existing facilities to assemble their cars. So, the entry of MNCs into Indian protected market create a wide range of choice for the buyers with the latest models and enhanced features for the ultimate satisfaction of the customers.

Very soon one can expect a multitude of cars specially designed and priced for Indians to hit the market. The new competitors are offering the product technologies that are far more advanced than the MARUTHI of 800s vintage.

ENTRY OF CARS IN INDIA :


India until 1950 has an automotive industry of its own. Previously cars were imported from the countries like U.K, Belgium, Italy, Germany and Canada, & U.S. The cars which British India used on its road were Buick, Ply mouth, Pontoon ford, Dodge, Rolls Royces for the elite class. Morris Minor, Limo etc, didnt stay for much longer period as the government had laid restrictions on the imports to conserve foreign exchange. In

1950, India came out with its first car from Hindustan motors, by the name Baby Hindustan later Land Master and Ambassador later came out with different models Mark I,II and IISI. The latest Nova version of the present age is that of mark IV version, another car Contessa Classic was real driving one in the company. The other players of this car segment are standard motors originally in collaboration with Vanguard Motors produce the Standard Vanguard Motors. Later they came out with models of Standard 8, Standard 10, Standard 2000, Standard payment and Standard Gazelle. They then shifted to standard herald with mark II, IV versions and I.

Lastly we had fiat in the joint venture with Premier Automobiles Limited came out with its first model of Fiat 1100 followed by Fiat Elegant, Fiat Minnicent, Premier, Premier Padmini etc., the Ambassador and the Fiat were the front with Hearld coming in the third place.

MARUTIS ENTRY:
The first car came in 1984 with the entry of Maruthi Suzuki with the advent of Maruthi Suzuki; Indian customers got taste of modern technology, reliability and an awareness of international quality standards.

The Indian automobile industry, which had ever faced competition due to policy; protected and closed economy was still slumbering and was slow to react.

A limited number of manufacturers continued to provide old and out dated technology.

Despite the rumbling in the industry which was started by the entry of Maruti Suziki; the existing two auto manufactures did very little to upgrade their old outdated technology. Hence Maruthi became the predominant player in the Indian passenger car market.

But sadly owing to the foreign exchange constraint Maruthi could not keep place with global technological advances. In spite joint venture with one if the reputed manufacturers, India did not gain much by the way of technological advancement.

Many of the auto components including the gearbox were still imported negating much of the advantage. Other wise India would have gained by a technology transfer.

In 1984, Maruthi Udyog Limited, over took all the dominant players with its attractive prices and with the introduction of fresh designs by 1988, Maruthi controlled 84% car market with its new models Maruthi-800, Omni and Zen.

ENTRY OF PREMIUM CARS:


The premium car segment was chosen by new entrants as a part of a market entrance strategy to create brand awareness. Today we have the UN usual

spectacle of how many cars too few Indians for a country, which used to manufacture 1.81 lacks cars per annum in 1991.

India today produces over 7.8(20030) cars per annum; the market has now changed for sellers market to buyers market. The first MNCs car to Indian market was DAEWOO. Its Ceilo, in competition with Maruthi Esteem followed by Peugeot 3091 Manufacture by premium automobiles in collaboration with Peugeot of France. Premium again had a tie up with Fiat of Italy to launch Fiat UNO in competition with ZEN. Mercedes tied up with Telco; general motors tied up with Hindustan Motors to bring out Opel Astra; Ford with Mahindra & Mahindra for Ford Icon. Mitsubishi with Hindustan Motors produce Mitsubishi Lancer Hondas tie up with Hero Motors for making of Honda city.

Hyundai entered India through a 100% owned subsidy to manufacture Hyundai Santo Followed by Telcos own indigenous car Tata Indica; Fianally Toyata with its version of Qualis all the set to use existing facilities and to prop up an sagging the global passenger car market.

As mentioned earlier the premier car segment was chosen by the new entrants are the part of market entrance to create brand awareness. All most all the entrants now have clear plans of introducing new products in themed size segments as step forwards capturing volumes to make the business viable.

Customers tend to hold back their purchases decisions in the anticipation of new car launches, price cuts, the glamour of millennium car and the

other factors. Almost all the new entrants created their own brand image for an average Indian car buyer; the entry of MNCs is definitely a big boon. The customer is getting the best technology on par with other developed countries.

ADVANTAGE INDIA :
India holds huge potential in the automobile sector including the automobile component sector owing to its technological, cost and manpower advantage. Further India has a well-developed, globally competitive Auto Ancillary Industry and established automobile testing and R&D center.

The country enjoys natural advantage and is among the lowest cost producer of steel in the world. The Indian automobile industry today boasts of being second largest two wheelers manufacturers in the world, worlds largest motorcycle manufacturer is in India, second largest manufacturer is in the world, fifth largest commercial vehicle manufacturer in the world and fourth largest car market in Asia.

The automotive sector is one of the core industries of the Indian economy, whose prospect is reflect of economic resilience of the country. With 4% contribution to the GDP and nearly 5% of the total industrial out put, the automotive sector has become a significant contributor to the exchanger.

Continuous economic liberalization over the years by the government of India has resulted in making India as one of the prime business destination for many global automotive players. The automobile industry witnessed a growth of 19.35% in April July 2006 when compared to April July 2005. The Indian automobile Industry has a mix of large domestic private players such as Tata, Mahindra, Ashok Leyland, Bajaj, Hero Honda and major international players including GM, Frod, Toyata, Suzki, Honda and Volvo

INVESTMENT OPPURTINES:
Establishing research and developing centers Establishing engineering centers Passenger car segment Heavy truck segment

PRODUCTION:
One of the largest industries in India, automotive industry has been witnessing in 1991, permitting automatic approval and successive liberalization of the sector over the years have led it overall development of the automobile industry. The freeing of the industry from the restrictive environment, on one had, helped it to restructure, absorb new technologies, align itself global developments and realize its potential and on the other hand, this has insignificantly increased industries contribution to over all industrial growth in the country. The automobile industry witnessed a growth of 19.35% percent in April-July 2006. India is the second largest two wheeler manufactures in the world.

Second largest tractor manufacturer in the world. 5th largest commercial manufacturer in the world. 3rd largest car market in Asia.

Automobile industry contributes 17% of total indirect taxes collected by the exchequer & is a driver of the product and process technologies, and has become a excellent manufacturing base for global players because of its

High machine tool capabilities Extremely capable component industry Most of the raw material locally produced Low cost manufacturing base High skilled man power

AUTO COMPONENTS INDUSTRY


Indicators Out put 2003-04 Rs.24, 500 Crores Exports Rs.3800 Crores Employment 5,00,000 Persons 2004-05 Rs.30, 640 Crores Rs.4620 Crores 5,00,000 Persons

Fig-1.3

EXPORTS:
Auto component exports shop up phenomenally by 40% in 2004-2005 to a level of U$$ 1.4 billion. A high growth of 30% is expected to continue in 2005-06 also. Indian auto components are being exports are being exported throughout the world. During the year 2004-05, total export was of the order of Rs. 6237 cores

COMPANY PROFILE

History The story began in early 1980s when the scooters had a waiting period and the Indian car customer had limited options. Maruthi Suzuki Limited (MSIL) was established in Feb 1981 through an Act of parliament, as a government company with Suzuki Motor Corporation of Japan holding 26% of stake. It was entrusted the task of achieving the following: Modernization of Indian auto mobile industry Production of vehicles in large volumes Production of fuel efficient vehicles

Suzuki was an obvious choice because of the unparallel expertise in small cars. The joint venture agreement was signed between Government of India and Suzuki Motor Company (now Suzuki Motor Corporation of Japan) in Oct 1982.

The company went into production in record time of 13 months and the first car was rolled out from Maruthi, Gurgoan in December 1983.

The government of India identified the need for small car of Indian masses a car that would be economical, environment friendly yet contemporary in technology. In short a peoples car. A global search for an efficient technology partner resulted in Suzuki then the leader in small cars in Japan being chosen for the now historical Maruti-Suzuki relationship.

CAR MARKET SCENARIO :


When Maruti began operations in 1983, there were only two other car companies in India and the total size of Indian passenger car market was a measly 40,000 units per year. From the start, Maruthi caught the imagination of the Indian car customers and launched four new models, including a hatch back, a mini purpose multiple van, an entry sedan and a SUV, over the next decade. Each of these models was an instant draw with the Indian customers. Suzuki Motor Corporation increased its stake on two occasions (26>>40>>50 controlling stake and brought it to 50% in the mind 1990s and to 54% with privatization in 2002)

VISION:
The leader in Indian automobile industry, creating customer delight and shareholders wealth; a pride of India

OUR CORE VALUES:


Customer obsession Fast and flexible Innovation and creativity Networking and partner ship Openness and learning

MARUTHI IN INDIA:

Maruthi was born as Government Company, with Suzuki as a minor partner, to make a peoples car for the middle class India. Over the years, its product range has widened, ownership has changed hands and customer had evolved. What remains unchanged, then and now, is Marutis mission to motorize India. Marutis parent company, Suzuki Motor Corporation, has been global leader in mini performance into a component, light weight engine that is clean and fuel efficient, the same characteristics make Marutis cars extremely relevant to Indian customers and Indian conditions. Product quality, safely and consciousness are embedded into our manufacturing process, which we have inherited from Marutis parent company.

Right from inception, Maruti brought to India very simple yet powerful Japanese philosophy smaller, fewer, loighter, shorter and neater

OTHER SERVICES:
Maruthi genuine parts Maruthi finance Maruthi insurance Maruthi true value Maruthi auto card Maruthi Dil se

fig-2.8

SUZUKI MOTOR CORPORATION AND INDIA:


Suzuki attaches great value and significance to Maruthi R&D. In addition to the planned capital investments of Rs 9000 cores (U$$ 2 billion approximately), in setting up new manufacturing and engine facilities, bringing newer models, fresh investments of U$ 1.8 billion have been allocated towards developing a dedicated Research & Development Center here in India, supporting Suzukis global ambitions.

MARUTHI SUZUKI TODAY:


More then half of numbers of cars sold in India wear a Maruthi Suzuki badge. We are subsidiary of Suzuki Motor Corporation, Japan. As Indias largest passenger car company, we account for over 50% of the domestic car market. We have a sales network of 562 outlets in 372 towns and cities, and provide maintenance support to customers at 2538 workshops in over 1200 towns and cities (as on 31st 2007)

Since inception, we have produced and sold over 6.75 million vehicles, including almost 500,000 units in Europe and other export markets. As Indias largest passenger car company, we account for over 50% of domes tic car market.

We have been rated first in the customer satisfaction for 8 years in a row in JD powers Surveys, and are Indians most respected automobile company.

And also is an independent survey conducted by Forbes.com where they rated top 200 reputed companies on various parameters such as reputation with in the customer employee fraternity, we stood 91st.

In the automobile section we finished 7th. The company set up network component vendors, dealers and service stations and facilitated around 60 technical collaborations for Indian vendors from Japanese, European and even American partners to upgrade technology and quality levels. Along with this came the task for instituting quality processes and the systems across the network. Today the suppliers of maruti are huge corporations them selves and are today in global business area.

BUILDING THROUGH PARTNERSHIP:


Our business relies substantially on our partners. We depend on a national network of the suppliers, sales outlets and workshops, managed by independent entrepreneurs, to manufacture car components and look after customers. We are the employer of choice for automotive engineers and young managers from across the country. Nearly 75,000 people are employed directly by Maruti and our partners. With in the company, we strive always to keep the culture open and participative.

MARUTI NETWORK:
We have a national wide footprint in over 1172 cities in India and export to over 100 countries across the globe.

As the Indian economy shifts to higher gear, we believe that maximum reach is very important factor. In the last year, we have also reached to new customer segments through the NRI-Dil Se program. Another segment we targeted was the rural segment through the Panchayat.

TARGET COST APPROACH:


Through continuous study and research we have adopted a new approach towards product planning and product pricing target cost approach.

We now are being designing our products by keeping an aggressive market price in the mind. We work in backwards to arrive at target costs for different components, equipment and for manufacturing operations.

Growing design capability in the area of cars, components and dies, both with in the company and among suppliers, have helped us foster target cost approach. That possibly explains why we are able to bring out fresh models with high levels of localization and aggressive pricing.

WINNING BECAME A HABIT:


The JD power CSI is 2000 was the first endorsement from the customer that we were on the track. Before that, we were told that no market leader in any country had ever been rated first in customer satisfaction. Market leaders have many more customers to satisfy, and are unable to give them attention like niche players can.

In India, where Maruthi had more than half of the market, the challenge was even greater. After we own it once; the next task was to repeat it in 2001. No, manufacturer we were told again had ever won it twice. We broke the record too. Then the hat trick, four-in-a-row, five-in-a row and now an eight. In all these years the car market has nearly doubled, customers expectation have multiplied, number of models has gone up, technology has evolved, and our dealer network has grown in size and reach. The only common factor throughout has been Matutis rating in JD power CSI. Maruthi Suzuki overall strength lies in building an organization that is sharply focused on the voice if the customer, said Mohit Arora. India director at JD power Asia Pacific. Marutis consistent performance in the performance in the study over the past several years has resulted in a steady increase in the percentage of its customers who say they intend to remain loyal to the brand

MARUTHI SUZIKI AND SERVICES:

Service Quality standards have been one of the most important Kaizens followed at the workshop. Maruti Suzuki has been way a head of the industry average and has been ranked NO:1 in the JD Power Customer satisfaction index seven times in a row.

SALES AND SERVICES :


The Maruti dealerships are the most visible parts of customer focus. Right from the way a prospective customer is welcomed to the dealership to the entire buying experience and the service experience, customers feel very invited. Its what makes customers loyal to Maruti cars too. Almost 50% o f our new car customers are existing customers. Almost 90% people, who trade in their used cars through Maruti true value; finally buy a new Maruti.

For us customer focus is very important, amply evident from the fact that customer obsession is our first core value. We have been chosen by the customers as the best car manufacturer in terms of customer satisfaction seven years in row in the prestigious JD power survey.

SPECIAL SERVICE INITIATIVES FOR THE WOMEN CUSTOMERS

Maruti offers a special service initiative to women, by picking up the car for service and dropping it off once completed. This is especially helpful for working women who need more time to come in as a great service.

MARUTHI DRIVING SCHOOL:


Maruti has also involved its dealer across the country in the big way in promoting road safety and safe driving. In collaboration with them, the company has set up 28 Maruti driving school in 25 different locations across the country. These schools are equipped with the world class, state of the art driving stimulators; over 21000 people have been trained so far.

THE CURRICULUM:
The driving training modules are as per international standards and include both theory and practical. Difficult driving situations such as fog, uphill terrain, rain and night driving is stimulated on the simulators to give the learners a firsthand account of demanding weather conditions. They are then taken for actual driving on the road. The rich mix of theory and practical gives learners a critical in insight into the required driving skills. In addition, the learners are also given technical training like changing flat tire and handling minor snags and repairs in the vehicle. Special session in the organized for learners on the traffic rules, regulations and sign Most importantly, the training lays great emphasis on

developing right attitude for safe driving and road safety among learners. For the convenience of women learners, there are lady instructors at MDS.

SNAP SHOT OF MARUTHI SUZUKI

Incorporated Joint venture agreement Equity structure

: : :

February 1981 October 1982 54.2% Suzuki, Japan, balances with

other financial institution and public Sales (no of cars) financial Year 2010-2011 : 974,624 including 59,271 Exports

Sales (net of excise) Financial year 2010-11 : 19.22 INR Billon, $ 9.6 Billion, 425

Billion yen Profit after tax financial year 2010-11: yen Employee strength : 7993 of financial year 2010-11 Rs. 20 billion, $ 9.6 billion, 51 Billion

Facilities:

Gurgoan Manesar

: :

3 vehicles assembly plants 1 vehicle assembly part

Head office in New Delhi, India Regional offices: 16

DIESEL POWER TRAIN PLANT:


Suzuki power train India limited (SPIL). Joint venture between Suzuki Motor Corporation 70% Equity the rest is with Maruti Suzuki India Limited. Global hub for Diesel engines and transmissions for Suzuki for worldwide.

JOINT VENTURE:
15 joint venture companies, including Suzuki power train India limited for component supply.

SUBSIDIARY COMPANIES:
True value: for the sale and purchase of pre owned cars Maruti Insurance: for insurance for Maruthi vehicles (four companies) Maruthi finance: for financing Maruti vehicles

PROPOSED INVESTMENTS TILL 2015:


Rs. 12000 crores/$ 27.5 billion/5589 billion yen of investments planned till 2010 for the capacity Enhancements and facility up gradation.

NETWORK RESEARCH FINANCIAL YEAR 2010-11:


Sales 598 outlet covering 375 cities Service 2421 work shops covering 1193 cities Pre owned car sales 242 dealers covering 148 cities.

PRODUCT PORT FOLIO:


12 models with around 100 variants including Maruthi 800 Omni Alto Wagon r Swift Zen Gypsy Esteem Versa SX4 Grand vitara Swift desire

Fig-2.9

CARS FOR NEW INDIA


We have tried to keep pace with the changing lifestyle of our customers by bringing models high on style and design quotient. Some of our recent offerings like Swift, Zen and SX4 have become popular choices because customers find them relevant. While designing contemporary cars and lacing them with latest safety features we have remained vigilant and cautious pricing them aggressively for our customers by adopting a target cost approach. New car have introduced by Maruthi Suzuki is the new Swift Desire. A compact sedan car and theres a concept car named as A-star which is under production plans. BOARD OF DIRECTORS Mr. Shinzo Nakanishi Mr. Manvinder Singh Banga

Mr. R. C. Bhargava

Chairman

Managing Director and CEO

Director

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