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The automotive industry can be divided into five sectors:1) Passenger Cars 2) Multi- Utility Vehicles (MUVs) 3) Two and three wheelers
4) Commercial Vehicles - Light Commercial Vehicles (LCVs) / Medium and Heavy Commercial Vehicles (MHCVs) 5) Tractors We will be looking at the Passenger car industry in India.
Maruti Suzuki exports entry-level models across the globe to over 100 countries and the focus has been to identify new markets. Some important markets include Latin America, Africa and South East Asia. Interestingly with a brand
new offering A-star, Maruti Suzuki is ready to take on European markets. Maruti Suzuki sold 53,024 units during 2007-08. This is the highest ever export volume in a year for the company, and marked a growth of 35 per cent over the previous year. Maruti Suzuki has exported over 552,000 units cumulatively with about 280,000 units to Europe and Israel. Maruti Suzuki has two state-of-the-art manufacturing facilities in India. The first facility is at Gurgaon spread over 300 acres and the other facility is at Manesar, spread over 600 acres in North India. The Gurgaon facility - The Maruti Suzuki's facility in Gurgoan houses three fully integrated plants. While the three plants have a total installed capacity of 350,000 cars per year, several productivity improvements or shop floor Kaizens(Japanese for "improvement" or "change for the best") over the years have enabled the company to manufacture nearly 700,000 cars/ annum at the Gurgaon facilities. The Manesar facility - Its Manesar facility has been made to suit Suzuki Motor Corporation (SMC) and Maruti Suzuki India Limited's (MSIL) global ambitions. The plant was inaugurated in February 2007. At present the plant rolls out World Strategic Models Swift , A-star & SX4 and DZire. The plant has several in-built systems and mechanisms. Diesel Engine Plant- Suzuki Powertrain India Limited - Suzuki Powertrain India Limited the diesel engine plant at Manesar is SMC's & Maruti's first and perhaps the only plant designed to produce world class diesel engine and transmissions for cars. The plant is under a joint venture company, called Suzuki Powertrain India Limited (SPIL) in which SMC holds 70 per cent equity the rest is held by MSIL. This facility has an initial capacity to manufacture 100,000 diesel engines a year. This will be scaled up to 300,000 engines/annum by 2010. Product range of the company includes: It offer full range of cars- from entry level Maruti 800 & Alto to stylish hatchback Ritz, A star, Swift, Wagon R, Estillo and sedans DZire, SX4 and Sports Utility vehicle Grand Vitara.
Zen Estilo Wagon R Versa A- Star Ritz SX4 Dzire Grand Vitara Milestones : 2011: Maruti Suzuki India unveiled its much awaited sportier and stylish car, the all new 'Swift'. 2011: On march 15, Maruti Suzuki India rolled out its 1 Crore (ten millionth) car. The historic 1 Crore car, a Metallic Breeze Blue coloured WagonR VXi (Chassis No 243899) rolled out from the Company's Gurgaon plant. 2010: Maruti Suzuki has been ranked India's most Trusted Brand in Automobile Sector by India's leading Business newspaper The Economic Times. 2009 - MSIL adopts voluntary fuel disclosure. First shipment of A-star leaves Mundra Port-jan10.A-star bags, Zigwheels car of the year award, A-star rated best small car of the year-autocar-UTVi. 2008 - World Premiere of concept A-star at 9th Auto Expo, New Delhi. 2007 - Swift diesel launched. New car plant and the diesel engine facility commences operations during 2006-07 at manesar, Haryana.SX4-Luxury Sedan Launched with the tag line Men are back. Maruti launches Grand Vitara. 2006-J.D.Power Survey award for the sixth year. MSIL has changed its EMS(environmental management systems) from ISO 14001:1996 version to ISO 14001:2004 version w.e.f.1st july 2005- MSIL was re-certified in 2005 as per ISO 14001:2004 standards. 2004 - A new esteem launched second successful facelift by maruti engineers. 2003 - Maruti gets listed on BSE and NSE. IPO(issue oversubscribed 11.2 times)New zen launched-first facelift by maruti engineers. 2002 - Divestment Suzuki Motor Corporation(SMC)acquires majority stake in MUL. Maruti Finance & Insurance launched.
2001 - Turn around with profits Rs104.5 crore. Four new business-True value, Insurance, Finance. Maruti Versa launched. Maruti True Value launched. 2000 - Maruti alto launched. First car company in India to launch call centre for internal and customer services. IDTR launched jointly with the Delhi government to promote safe driving habits. Achievements/ recognition:
The company takes great pride in sharing that customers have rated Maruti Suzuki first once again in Customer Satisfaction Survey conducted by independent body, J.D.Power Asia Pacific. It is 9th time in a row. Maruti Suzuki wins 'Golden Peacock Eco-Innovation Award' Maruti Suzuki Ranks Highest in Automotive Customer Satisfaction in India For Ninth Consecutive Year. Maruti Suzuki becomes the first Indian car company to export half a million cars
SWOT Analysis
Strength 1. Maruti is the largest passenger car company in India, accounting for around 45% market share 2. Good advertising, product portfolio, self-competing brands 3. Largest distribution network of dealers and after sales service centres 4. Strong brand value and strong presence in the second hand car market 5. Having different revenue streams like Maruti finance, Maruti Insurance and Maruti driving schools Weakness 1. Inability to penetrate into the international market 2. Employee management, strikes, worker wage problems Opportunity 1. Developing hybrid cars and fuel efficient cars for the future 2. Tapping emerging markets across the world and building a global brand 3. Fast growing automobile market and increased purchasing power Threats 1. Government policies for the automobile sector across the world 2. Ever-increasing fuel prices 3. Intense competition from global automobile brands and cheaper brands 4. Substitute modes of public transport like buses, metro trains etc
CONTRIBUTION TO ECONOMY
Maruti Suzuki gave India its first car maruti 800. Today they produce more than 1 million units annually with 15 different models and over 200 variants. With annual growth sales increasing at 22.7% y-o-y basis. It has acquired 700 acres of land in Gujarat for setting up assembly capacity of which Suzuki Motor Corporation would invest $485 million in a wholly owned manufacturing facility in Gujarat to make cars and other vehicles on contract for sale by its listed Indian subsidiary. Rs 1,925 crores has been invested in setting up the third assembly plant at manesar and Rs 1,700 crores invested in setting up diesel engine unit at gurgaon. Maruti Suzuki reported 4.4 per cent decline in its total sales at 90,924 units in December 2013 as against 95,145 units in the same month previous year. Domestic sales during the month stood at 86,613 units, up 5.5 per cent from 82,073 units in December previous year. With Indian Automobile Industry 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. Maruti employees more than 6000 peoples. At the same time big players like Tata Motors and Maruti Suzuki have material cost of about 80% but are, recording profits after tax of about 6% to 11%. Maruti Suzuki is leading the passenger vehicle segment with a market share of 45%. The automobile industry has a defined its target in the Automotive Mission Plan as To emerge as the destination of choice in the world for design and manufacture of automobiles with output reaching a level of USD 145 billion accounting more than 10% of GDP and providing additional employment to 25 million people by 2016. In order to achieve this plan interventions are required from both Industry and Indian Government. The Indian Government would play a key enabling role in facilitating infrastructure creation, promote the countrys capabilities, create a favourable and predictable business environment, attract investment and promote research & development. The role of Industry will
primarily be in designing and manufacturing products of excellent quality standards, establishing cost competitiveness, improving productivity of both labour and capital, achieving scale and R&D enhancing capability and highlighting Indias products in potential markets. Maruti generates a third of Suzuki's global profits and its annual 11.5 millionunit production contributes around 40 per cent to the worldwide volumes of the parent company. Maruti currently operates six in-house plants - three each in Gurgaon and Manesar - with an installed capacity of 1.75 million units. Suzuki Motor Corp may not rank among the top carmakers in the world but it holds pole position in India. The joint venture it controls here, Maruti Suzuki, directly accounts for nearly 0.5 per cent of the Indian GDP and can lay stake to a larger share if its contribution to the Indian auto components ecosystem is included.