Maruti Suzuki

Maruti SuzukiFrom Wikipedia, the free encyclopedia

Maruti Suzuki India Limited

Type Public (BSE MARUTI, NSEMARUTI)

Industry Automotive

Founded 1981 (as Maruti Udyog Limited)

Headquarters Delhi, India

Key people Mr. Shinzo Nakanishi, Managing Director and CEO

Products Automobiles, Motorcycles

Revenue ▲US$4.8 billion (2009)

Employees 6,903 [1]

Parent Suzuki Motor Corporation

Website MarutiSuzuki.com

Maruti Suzuki India Limited (Hindi: मारुति� सुज़ूकी इंति�या लि�मिमटे�) a subsidiary of Suzuki Motor Corporation of

Japan, is India's largest passenger car company, accounting for over 45% of the domestic car market. The

company offers a complete range of cars from entry level Maruti-800 and Alto, to stylish hatchback Ritz, A star,

Swift, Wagon-R, Estillo and sedans DZire, SX4 and Sports Utility vehicle Grand Vitara. [2]

It was the first company in India to mass-produce and sell more than a million cars. It is largely credited for

having brought in an automobile revolution to India. It is the market leader in India and on 17 September

2007, Maruti Udyog Limited was renamed Maruti Suzuki India Limited. The company's headquarters are

located in Delhi.

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Contents

[hide]

1 Profile

2 Partner for the joint venture

3 Joint venture related issues

4 Industrial relations

5 Services offered

o 5.1 Current sales of automobiles

5.1.1 Manufactured locally

5.1.2 Imported

o 5.2 Discontinued car models

o 5.3 Manufacturing facilities

5.3.1 Gurgaon Manufacturing Facility

5.3.2 Manesar Manufacturing Facility

o 5.4 Sales and service network

o 5.5 Maruti Insurance

o 5.6 Maruti Finance

o 5.7 Maruti TrueValue

o 5.8 N2N Fleet Management

o 5.9 Accessories

o 5.10 Maruti Driving School

6 Issues and problems

7 Exports

8 See also

9 References and notes

10 External links

[edit]Profile

The old logo of Maruti Suzuki India Limited. Later the logo of Suzuki Motor Corp. was also added to it

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http://en.wikipedia.org/wiki/File:Maruti_Old_Logo.JPG

'To Munsiyari on a Maruti 800',Uttarakhand Himalayas

Maruti Suzuki plant in Gurgaon

Maruti Suzuki is India's number one leading automobile manufacturer and the market leader in the car

segment, both in terms of volume of vehicles sold and revenue earned. Until recently, 18.28% of the company

was owned by the Indian government, and 54.2% by Suzuki of Japan. The Indian government held an initial

public offering of 25% of the company in June 2003. As of 10 May 2007, Govt. of India sold its complete share

to Indian financial institutions. With this, Govt. of India no longer has stake in Maruti Udyog.

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 Maruti

Suzukis (but not manufactured by Maruti Udyog) are sold by Suzuki Motor Corporation and manufactured

in Pakistan and other South Asian countries.

The company annually exports more than 50,000 cars and has an extremely large domestic market in India

selling over 730,000 cars annually. Maruti 800, till 2004, was the India's largest selling compact car ever since

it was launched in 1983. More than a million units of this car have been sold worldwide so far. Currently, Maruti

Suzuki Alto tops the sales charts and Maruti Suzuki Swift is the largest selling in A2 segment.

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Due to the large number of Maruti 800s sold in the Indian market, the term "Maruti" is commonly used to refer

to this compact car model. Till recently the term "Maruti", in popular Indian culture, in India Hindu's lord

Hanuman is known as "maruti", was associated to the Maruti 800 model.

Maruti Suzuki has been the leader of the Indian car market for over two decades.

Its manufacturing facilities are located at two facilities Gurgaon and Manesar south of Delhi. Maruti Suzuki’s

Gurgaon facility has an installed capacity of 350,000 units per annum. The Manesar facilities, launched in

February 2007 comprise a vehicle assembly plant with a capacity of 100,000 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 700,000 units annually.

More than half the cars sold in India are Maruti Suzuki cars. The company is a subsidiary of Suzuki Motor

Corporation, Japan, which owns 54.2 per cent of Maruti Suzuki. The rest is owned by the public and financial

institutions. It is listed on the Bombay Stock Exchange and National Stock Exchange in India.

During 2007-08, 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.

Maruti Suzuki offers 15 models, Maruti 800, Alto, WagonR, Estilo, A-star, Ritz, Swift, Swift

DZire, SX4, Omni, Eeco, Gypsy, Grand Vitara. Swift, Swift DZire, A-star and SX4 are manufactured in

Manesar, Grand Vitara is imported from Japan as a completely built unit (CBU), remaining all models are

manufactured in Maruti Suzuki's Gurgaon Plant.

Suzuki Motor Corporation, the parent company, is a global leader in mini and compact cars for three decades.

Suzuki’s technical superiority lies in its ability to pack power and performance into a compact, lightweight

engine that is clean and fuel efficient.

Nearly 75,000 people are employed directly by Maruti Suzuki and its partners. It has been rated first in

customer satisfaction among all car makers in India from 1999 to 2009 by J D Power Asia Pacific. [3]

Further information: Timeline of Maruti Suzuki

[edit]Partner for the joint venture

Pressure started mounting on Indira and Sanjay Gandhi to share the details of the progress on the Maruti

Project. Since country's resources were made available by mother to her son's pet project. A delegation of

Indian technocrats was assigned to hunt a collaborator for the project. Initial rounds of discussion were held

with the giants of the automobile industry in Japan including Toyota, Nissanand Honda. Suzuki Motor

Corporation was at that time a small player in the four wheeler automobile sector and had major share in the

two wheeler segment. Suzuki's bid was considered negligible.

In the initial rounds of discussion the giants had their bosses present and in the later rounds related to the

technical discussions executives of these automobile giants were present. Osamu Suzuki, Chairman and CEO

of the company ensured that he was present in all the rounds of discussion. Osamu in an article writes that it

subtly massaged their (Indian delegation) egos and also convinced them about the sincerity of Suzuki's bid. In

the initial days Suzuki took all steps to ensure the government about its sincerity on the project. Suzuki in return

received a lot of help from the government in such matters as import clearances for manufacturing equipment

(against the wishes of the Indian machine tool industry then and its own socialistic ideology), land purchase at

government prices for setting up the factory Gurgaon and reduced or removal of excise tariffs. This helped

Suzuki conscientiously nurse Maruti Suzuki through its infancy to become one of its flagship ventures. [4]

[edit]Joint venture related issues

Maruti Suzuki's A-Star vehicle during its unveiling in Pragati Maidan, Delhi. A-Star, Suzuki's fifth global car model, was

designed and is made only in India.[5] Besides being Suzuki's largest subsidiary in terms of car sales, Maruti Suzuki is also

Suzuki's leading research and development arm outside Japan

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 till Suzuki Motor

Corporation gained the controlling stake. This highly profitable joint venture that had a near monopolistic trade

in the Indian automobile market

Maruti's Million

We began our operations way back in 1983, with the Maruti 800 - the vehicle which brought about a revolution in the Indian car market.

Today, one in every two cars in India is a product of Maruti Suzuki. Our scale and manufacturing complexity have today moved to a different league from when it began. We have reached a capacity of one million cars annual production this year.

This feat is entirely based on the company's constant endeavour to meet aspirations of a large and diverse demography, by providing the best through innovative products and services.

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Today, each car from the Maruti Suzuki factories at Gurgaon, and Manesar, Haryana, North India are the tangible evidence of Quality, manufacturing standards and efficiency. Lean Manufacturing

Setting trends in new products and achieving customer delight starts with Manufacturing Excellence and Maruti's...

more...

Production Management System

Production Management System (PMS) is the next step towards moving ahead to sustain the momentum...

more...

Facilities

Maruti Suzuki has two car facilities in India, one at Gurgaon and the other at Manesar...

more...

Maruti Production System or MPS draws learning's from its parent company Suzuki Motor Corporation's concepts on `lean manufacturing' under Suzuki Production System i.e. SPS.

Setting trends in new products and achieving customer delight starts with Manufacturing Excellence and Maruti's manufacturing excellence hinges around four important pillars-Cost, Quality, Safety and Productivity.

Cost

Every employee working on the line is 'cost sensitive' and functions in capacity of a Cost Manager. He is a key contributor in suggesting how to keep costs of production under control.

Quality

A product of poor quality requires repeated inspections, entails wastage in terms of repairs and replacements. "Do it right first time", is the principle followed to avoid wastage.

To ensure quality, robots were devices and deployed especially where they reduced worker fatigue and were critical in delivering consistent quality. With consistent improvements in the plant the company was able to manufacture over 600,000 vehicles in 2006-07 with an installed capacity of just 350,000 vehicles per year. Safety

"Home or work place; Safety takes First Place". This has been the motto of the company where safety is concerned. Maruti attaches great significance to safety of its people and strongly advocates that safety at work place adds to quality of the products and improves productivity of the plant significantly.

In the Japanese manufacturing system, the central role is accorded, not so much to Quality, Productivity or Cost, but to Safety. When process flow, lay-out and systems are designed for maximum safety, they automatically contribute to better quality and productivity.

Production Management System (PMS) is the next step towards moving ahead to sustain the momentum. It is a strategy to achieve Manufacturing Excellence evolved through participative approach. The system is people driven and ensures involvement of all levels (Managers, Executives, and Supervisors).

The concept ensures participation and error free communication. The result is clarity of content, better understanding and openness towards feedback. These values make PMS a sustainable system. Having achieved the target of selling a million cars in the financial year 2009 - 2010, PMS has lead the production team towards greater enhanced productivity with perfection.

PMS is derived from the basic Japanese principles of 5S, 3G and 3K

In order to bring an improvement in overall processes and systems in Production Division through involvement of all levels, PMS was launched in Maruti Suzuki. Through various phases of PMS the company embarked on its journey of bring in a) Clarity of Role, Non-duplication of work, Ownership, Commitment and Standardization in all our process and systems across the production division.

Challenge 50 helped us improve our plant productivity by 46 per cent in three years and cost & quality improved by 30 per cent.

Moving ahead, the next target was to sustain this momentum.

Production Management System (PMS) was the next bold step in this direction.

PMS is a strategy to achieve Manufacturing Excellence evolved through participative approach.

PMS is

A system which is people driven and ensures involvement of all levels ( Managers, Executives, Supervisors )

A system which ensures ownership A system which brings in standardization of systems & processes A system which ensures Sustainability

PMS has entered the fourth phase of implementation and the results have been overwhelming.

Excellence through participative approach PMS is a bottoms-up approach where people of the work area are encouraged to give solutions to the problems at their end. It is implemented across levels. This motivates the operator and ensures his “ownership” all through the solution finding process.

The concept ensures participation and error free communication. The result is clarity of content, better understanding and openness towards feedback. These values make PMS a sustainable system.

Clarity of the Role One of the aspect that have bothered hierarchical structures is the clarity of the roles and responsibility across strata. Clarity on what is expected out of a supervisor, a manager or a technician at the shop floor has brought in structure and standardization to production management at Maruti. The result is that job duplication is eliminated and no man-hours are lost in understanding what each person is expected to do.

The outcome of such clearly defined roles is increased efficiency of operations.

Bringing in Standardization Through such people participation, PMS has brought in standardization that eliminates any scope of confusion at shop floor. A visual consistency across the manufacturing facilities is notable. Bins and trolleys are earmarked for tools and components. Pictorial charts explaining processes and procedures are pasted at convenient and strategic points helping shop floor employees understand various mechanisms with ease.

Wherever possible a colour coding control or visual control is followed to eliminate operator errors arising out of language constraints. This helps in clear distinction of different model and its components.

All around Gains These processes have led to many operational improvements that have saved cost and time. At the same time these have brought in operational ease and a defined activity flow and sequence.

Marching ahead towards the goal of selling a million vehicles by 2010, PMS will lead the production team towards greater enhanced productivity with perfection.

Challenge 50 Click here to know more

In the year 2002, to match up to the standards of Suzuki¿s best global plant in Japan - the Kosai plant, we set upon a target of a 50 per cent improvement in productivity by 2005. This mission was termed Challenge 50.

This challenge was approached in totality. Each process in the production and manufacturing plant was scrutinized and assessed. Layouts were altered, innovative equipment and processes were introduced and operations relentlessly made lean and efficient.

In-house automation also played a major role in Challenge 50. We devised robots and deployed them, especially where they reduced worker fatigue and were critical in delivering consistent quality.

At the end of three years, we achieved 46 per cent increase in Productivity, and a 30 per cent improvement in quality and cost - a tribute to the vision, courage and team work of our people.

Gurgaon Facility

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.

Maruti Suzuki's facility in Gurgaon houses three fully integrated plants. Together the three plant have an installed capacity of around 700,000 units.

K- series Plant

The Gurgaon facilities also houses the 'K' Engine Plant. Commissioned in 2008, the K-series engine plant has an installed capacity of 500,000 units.

K-series engines are available in 1 litre and 1.2 litre capacities. The highly fuel efficient, technologically advanced K series engines have been very well appreciated by our customers for their performance.

Several Maruti Suzuki cars such as the A-star, Estilo, Swift, Swift Dzire, Ritz and WagonR sport the K-series engines. Company has announced an investment of around Rs. 12500 crores to expand engine capacity by 250,000 units by 2010.

Manesar Facility

The state of the art Manesar facility was inaugurated in February 2007.

At present the Manesar plant rolls out World Strategic Models Swift, A-star, SX4 and swift DZire.

There is a high degree of automation and robotic control in the press shop, weld shop and paint shop to help manufacture with acute precision, high quality and speed.

The Manesar plant is designed to be flexible: diverse car models can be made here convenientlyowing to automatic tool changers, centralized weld control system and numerical control machines that ensure high Quality.

The plant at Manesar is the company's fourth car assembly plant and has a capacity of 300,000 cars per year.

Company has announced an investment of Rs.1700 crores to expand its capacity by 250,000 units. The new facility is expected to be ready by 2011-12.

Suzuki Powertrain

Suzuki Powertrain India Limited is a joint venture of Maruti Suzuki with Suzuki Motor Corporation, Japan.at Manesar. It manufactures world class diesel engines and transmissions for cars.

SMC holds 70 per cent equity in SPIL the rest is held by Maruti Suzuki.

Gurgaon Facility

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.

Maruti Suzuki's facility in Gurgaon houses three fully integrated plants. Together the three plant have an installed capacity of around 700,000 units.

K- series Plant

The Gurgaon facilities also houses the 'K' Engine Plant. Commissioned in 2008, the K-series engine plant has an installed capacity of 500,000 units.

K-series engines are available in 1 litre and 1.2 litre capacities. The highly fuel efficient, technologically advanced K series engines have been very well appreciated by our customers for their performance.

Several Maruti Suzuki cars such as the A-star, Estilo, Swift, Swift Dzire, Ritz and WagonR sport the K-series engines. Company has announced an investment of around Rs. 12500 crores to expand engine capacity by 250,000 units by 2010.

Manesar Facility

The state of the art Manesar facility was inaugurated in February 2007.

At present the Manesar plant rolls out World Strategic Models Swift, A-star, SX4 and swift DZire.

There is a high degree of automation and robotic control in the press shop, weld shop and paint shop to help manufacture with acute precision, high quality and speed.

The Manesar plant is designed to be flexible: diverse car models can be made here convenientlyowing to automatic tool changers, centralized weld control system and numerical control machines that ensure high Quality.

The plant at Manesar is the company's fourth car assembly plant and has a capacity of 300,000 cars per year.

Company has announced an investment of Rs.1700 crores to expand its capacity by 250,000 units. The new facility is expected to be ready by 2011-12.

Suzuki Powertrain

Suzuki Powertrain India Limited is a joint venture of Maruti Suzuki with Suzuki Motor Corporation, Japan.at Manesar. It manufactures world class diesel engines and transmissions for cars.

SMC holds 70 per cent equity in SPIL the rest is held by Maruti Suzuki.

Lucky Draw

Lowest Maintenance Costs

Spaceship

India Comes Home

Maruti Alto

S

Maruti Dzire

Maruti A-star

Maruti Zen Sports

Maruti SX4

Lucky Draw


Spaceship

Tank

Yacht

K Series

Maruti Genuine Parts

K Series Engine

Maruti Suzuki - Joys of

Life

Maruti Wagon-R

Maruti Swift - owners

love to take-off


get more out of curves

Lucky Draw


Spaceship

Tank

Yacht

K Series

Maruti Genuine Parts

K Series Engine

Maruti Suzuki - Joys of

Life

Maruti Wagon-R


love to take-off


get more out of curves

Maruti Swift - often

makes people look twice

Maruti Swift - is

driven by youngsters

Maruti A-Star

Maruti Estilo

K-Series

Maruti Service Station

Maruti Ritz

Maruti Dzire

Maruti A-star

Maruti Zen Sports

Maruti SX4

India Comes Home

Maruti Alto

Maruti Swift

5 page of 7

ndia's Most Trusted Brand 2010: The Economic times

Maruti Suzuki has been ranked India’s most Trusted Brand in Automobile Sector by India's leading Business newspaper The Economic Times.

2000-2009: JD Power Customer Satisfaction Index Award - India

The biggest draw for the past ten years has been the award for highest recognition by the customer. In 2009-10 again, for the tenth consecutive time, Maruti Suzuki ranked the highest in JD Power Customer Satisfaction Index.

Other Accolades

During 2009-10, the company, its products and services received reputed awards and accolades instituted by independent expert groups, media houses and research agencies.

These include:

Rated as No. 1 in J D Power Sales Satisfaction Index Hatchback of the year – Ritz by Autocar Car of the year – Ritz by Business Motoring Manufacturer of the year by CNBC Overdrive Ranked third amongst global car companies in the World's Most Reputed Company Survey 2009 National Award for Excellence in Corporate Governance by ICSI

National Road Safety Mission

Driving its message for road safety, Maruti Suzuki India Limited, unveiled a National Road Safety Mission programme in December 2008. Under the programme, the company will:

Train 500,000 people in safe driving in the next 3 years across India

While utilizing the existing 4 Institutes of Driving Training and Research (IDTR) in Delhi, Dehradun and Vadodara and 61 Maruti Driving Schools across the country the company will enter into partnerships with state governments for more IDTRs and with its dealers for more Maruti Driving Schools

Of the 500,000 people to be trained, at least 100,000 will be people from underprivileged section of society, who are keen to take driving as a profession.

The company will continue to support to government and industry in their efforts for road safety

In addition, Maruti Suzuki is currently expanding its network of Maruti Driving Schools across India, in collaboration with its dealers. These state-of-the-art institutes, offering practical, theory and simulator training along international lines, are aimed at making roads safer.

Maruti Suzuki True-Value, the company's service business includes sales and purchase of pre-owned cars. These initiatives, besides providing total mobility solutions to customers in a convenient and transparent manner, have helped improve economic viability of the company's dealerships.

Maruti Suzuki India Limited (MSIL, formerly known as Maruti Udyog Limited) is a subsidiary of Suzuki Motor Corporation, Japan. MSIL has been the leader of the Indian car market for over two and a half decades. The company has two manufacturing facilities located at Gurgaon and Manesar, south of New Delhi, India. Both the facilities have a combined capability to produce over a 1.2 million (1,200,000) passenger car units annually.

The company plans to expand its manufacturing capacity to 1.75 million by 2013. For this the company will be investing around Rs. 60 Billion (Rs 6,000 Crores) over the period till 2013.

The company offers a wide range of cars across different segments. It offers 14 brands and over 150 variants - Maruti 800, people movers, Omni and Eeco, international brands Alto, Alto-K10, A-star, WagonR, Swift, Ritz and Estilo, off-roader Gypsy, SUV Grand Vitara, sedans SX4 and Swift DZire In an environment friendly initiative, in August 2010 Maruti Suzuki introduced factory fitted CNG option on 5 models across vehicle segments. These include Eeco, Alto, Estilo, Wagon R and Sx4.

In fiscal 2009-10 Maruti Suzuki became the only Indian company to manufacture and sell One Million cars in a year.

Maruti Suzuki has employee strength over 7,600 (as at end March 2010),

In 2009-10, the company sold a record 10,18,365 vehicles including 1,47,575 units of exports. With this, at the end of March 2010, Maruti Suzuki had a market share of 53.3 per cent of the Indian passenger car market (including C segment).

Maruti Suzuki's revenue has grown consistently over the years.

(Rs. in Million)

Year Net Sales Year Net Sales

2004-052006-072008-09

1,09,1081,45,9222,03,583

2005-062007-082009-10

1,20,0341,78,6033,01,198

The company is listed on Bombay Stock Exchange and National Stock Exchange.

The Government of Japan has honoured Maruti Suzuki with the METI Award for promotion of Japanese brand in India. Maruti Suzuki is one of the six companies, as also one among two outside Japan, to have received this prestigious award.

Just two years back, Maruti Suzuki inaugurated its state-of-the-art new engine plant at Gurgaon. This new technology plant churns out K-series engines that are lean, highly fuel efficient and environment friendly. The introduction of new technology engines is in line with the company’s commitment to offer latest technology in full range of models. The K-series engines presently power the A-star, Ritz, Estilo, WagonR, Swift and Swift

Dzire models. The K-series engines would soon be extended to other models in the Maruti Suzuki range. Maruti Suzuki will be investing around Rs 1,250 crore (Rs 12.5 billion) on capacity expansion of the K-series engines. The expanded annual capacity will be over 7 lakh units from the present 5 lakh units. This will be a progressive investment to be completed by 2012. Over the quarter century of its existence, Maruti Suzuki's contribution as the growth engine for the Indian automobile industry is widely acknowledged. Maruti Suzuki has impacted the lifestyle and psyche of an entire generation of Indian middle class through the quality of its products and services that are in direct sync with the needs of the Indian populace

Just two years back, Maruti Suzuki inaugurated its state-of-the-art new engine plant at Gurgaon. This new technology plant churns out K-series engines that are lean, highly fuel efficient and environment friendly. The introduction of new technology engines is in line with the company’s commitment to offer latest technology in full range of models. The K-series engines presently power the A-star, Ritz, Estilo, WagonR, Swift and Swift

Dzire models. The K-series engines would soon be extended to other models in the Maruti Suzuki range. Maruti Suzuki will be investing around Rs 1,250 crore (Rs 12.5 billion) on capacity expansion of the K-series engines. The expanded annual capacity will be over 7 lakh units from the present 5 lakh units. This will be a progressive investment to be completed by 2012. Over the quarter century of its existence, Maruti Suzuki's contribution as the growth engine for the Indian automobile industry is widely acknowledged. Maruti Suzuki has impacted the lifestyle and psyche of an entire generation of Indian middle class through the quality of its products and services that are in direct sync with the needs of the Indian populace

Maruti India Limited Strategic Evaluation Ankit Jhamtani - Presentation Transcript

1. Maruti Suzuki India Limited Mr. R.C Bhargava Mr. Shinzo Nakanishi Chairman Managing Director

2. BRIEF HISTORY •The time when scooters had a waiting period. •Maruti Udyog Limited (MUL) was established in Feb 1981 through an Act of Parliament, to meet the growing demand of a personal mode of transport caused by the lack of an efficient public transport system. •MUL launched its first car Maruti800 on December 14, 1983 at initial price of Rs. 47,500.Mr. Harpal Singh, the first Maruti owner, still drives the car after 26 years.

3. Vision and Core Values “The leader in the Indian automobile Industry, Creating Customer Delight and Share holder’s Wealth; A pride of India” Core Values • Customer Obsession. • Fast, Flexible, & Fast Mover. • Innovation and Creativity. • Networking and Partnership. • Openness and Learning

4. Milestones 1983 “The people’s car is born”. 1987 Maruti goes overseas, exported 500 cars to Hungary. 1990 Launched India’s first sedan. (Esteem). 1992 Suzuki Motor Company increases stake in MUL to 50 %. 1993 Launched Maruti Zen “the world’s car”. 1996 1.5 million vehicles rolled out. 2000 JD power customer Satisfaction index Award. 2001 JD power customer Satisfaction index Award. 2001 Maruti versa launched , Maruti true value launched. 2002 JD power customer Satisfaction index Award. 2002 Maruti finance and insurance launched. 2002 Disinvestment, Suzuki Motor Company increases stake in MUL to 54.5%. 2003 Maruti gets listed on BSE and NSE (IPO Oversubscribed 11.2 times). 2003 JD

power customer Satisfaction index Award. 2004 JD power customer Satisfaction index Award. 2005 Launched Swift. 2005 JD power customer Satisfaction index Award. 2006 JD power customer Satisfaction index Award. 2007 Launched SX4 Luxury sedan and SUV Grand Vitara. 2007 JD power customer Satisfaction index Award 2008 World premier of concept A-Star at Auto Expo , New Delhi 2008 JD power customer Satisfaction index Award. 2008 Launched M800 LPG.

5. MARKETING STRATEGY OF MUL IN LATE 1980’s •Maruti was the first company in India which studied the consumer demand and responded to it well. •Market segmentation policy was adopted that targeted different type of consumers with different type of models. • Maruti800 targeted medium income group, while the deluxe model targeted rich income group. •Maruti van targeted businessmen and doctors(ambulance) •The Gypsy targeted the paramilitary forces and the police. •This resulted in complete control of maruti over the market . •The company advertised its different products according to costumers. •A special cell was made to make direct dealing of Gypsy with the government & the army.

6. The changing Auto Industry After year 2000,(and 2003 to be more precise)there was a change in automobile market which where due to - 1. The government has reduced regulation on the industry and more foreign players were invited. 2. Banks and other financing companies started providing car loans at reasonable interest rate. Impacts •The Indian consumer now started buying the mid-size cars rather than small cars ,the luxury cars also gained popularity, SUV’s also started coming in the market. •The increasing level of income of urban people ,the small cars were not considered to be luxury item any more. THE MAJOR FAULTS The MUL depended more on its M800 model, so when in late 1990’s the new players like when Matiz, Santro and Indica came into the market with more space and better comfort ,at same price, then Maruti lost a major share of market. Maruti Suzuki was far behind in luxury and SUV car ,the other player like GM, TATA, Mahindra , Mitsubhisi and Toyota were already established in the market ,so replacing them was not easy.

7. THE RESPONSE S OF MARUTI •To gain back its lost share Maruti launched Zen ,Alto and WagonR. These small segment car gained huge response for consumers. •Maruti also launched aggressive promotional policy to promote them like announcing Zen as the “world’s car”. •Maruti also made a slogan “count on us”. To emphasize its reliability. •In 2003 Maruti came up with “change your life campaign” ,it provided vehicle insurance at just Rs 1 to attract the customers. advertisement such as of Alto in which a small boy says to his father ”papa ki karan petrol khatam hi nahi honda” was make customer feel that Alto was best fuel efficient. •During 2003 and 2004, MUL visualized and implemented a strategy for its dealers to increase their profitability levels in view of increased competition. According to the strategy, the 300 plus -odd dealers of the company were asked to strengthen their manpower, increase the salaries of their sales agents, and offer them better incentives. • '2599' offer-In 2004, MUL introduced the '2599' offer under which a consumer could buy an M-800 by paying an EMI of Rs 2,599 only, for a period of seven years. The down payment was fixed at Rs 40,000. MUL entered into an agreement with the State Bank of India (SBI), the largest bank in India, to promote this scheme.

8. THE RESPONSE S (continued) •Promotion •Advertisements targeting different segments Promotional offers through out the years Psychographics is used : • Wagon-R : Smarter people (executives) • Omni : People who need to transport goods • Alto : Small car : small family • Zen Estillo : Young trendy people •Supply Chain •The joint initiatives taken by Maruti and its team of suppliers have generated over 29% cost reduction over three years for Maruti Less than 20 per cent of a car is manufactured in-house. The rest is accounted for by 215 suppliers and hundreds of second and third tier of vendors who, in turn, supply to them.

9. Maruti Suzuki’s Current Profile A. Maruti Suzuki India is India's leading maker of automobiles. B. A partnership with Suzuki, the company makes models such as the Alto, Gypsy, and Swift. One of its its newest models, the Swift Dzire, is a compact, entry-level sedan that offers a variety of modern features. C. Maruti Suzuki also exports selected models to many European markets. D. Annual capacity of about 650,000 cars.(Gurgaon, Delhi, Manesar) E. Maruti Suzuki enjoys just over a 50% share of its domestic market. "I believe in Dr. C. K. Prahlad's concept of finding value at the bottom of the pyramid. We are trying to increase market penetration through several innovative schemes. There is still a very large segment of our population which cannot afford a car." - Jagdish Khattar, Former Managing Director, MUL, in 2004.

10. Maruti Suzuki’s Current Market Facts

11. Maruti Suzuki’s Key Success Factors(KSF’s) A. Technology-Related KSF’s 1. R&D facilities and Japanese collaboration. 2. Suzuki internationally known for Small cars 3. Launch of World class quality cars like A- STAR and SPLASH B. Manufacturing-Related KSF’s 1. Designing cars best suited for Indian market. 2. Cost leadership in the market due to efficient value chain and manufacturing plants. C. Distribution-Related KSF’s 1. The record sales performance was affected through the Company's vast dealership network. 2. Car sales outlet increased to 600 covering 393 cities. 3. There are 265 ‘Maruti True Value’ outlets spread across 166 cities, which are engaged in the sale, purchase and exchange of pre-owned cars. ‘Maruti True Value’ is the largest organised pre-owned car sales network in India.

12. D. Marketing-Related KSF’s 1. Full range of cars- from entry level Maruti 800 & Alto to stylish hatchback A- star, Swift, Wagon R, Estillo and sedans DZire, SX4 and Sports Utility vehicle GrandVitara. 2. Communication through advertisement is totally to the need of indian culture 3. Pan-India service network. E. Skills and Capability -Related KSF’s 1. The service network had a total of 2,628 service outlets including dealer workshop as well as Maruti Authorised Service Stations, covering 1220 cities.

13. Maruti Suzuki’s Brand Equity A. Authorized Service Stations Maruti is one of the companies in India which has unparalleled service network. To ensure the vehicles sold by them are serviced properly Maruti has 2628 listed Authorized service stations and 30 Express Service Stations on 30 highways across India. B. Maruti Insurance 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. C. Maruti Finance To promote its bottom line growth, Maruti launched Maruti Finance in January 2002.Maruti claims that its finance program offers competitive interest rates to its customers, which are lower by 0.25% to 0.5% from the market rates. D. Maruti TrueValue Maruti True service offered by Maruti Udyog to its customers. It is a market place for used Maruti Vehicles. One can buy, sell or exchange used Maruti vehicles with the help of this service in India.

14. E. Accessories Maruti started a new initiative under the brand name Maruti Genuine Accessories to offer accessories like alloy wheels, body cover, carpets, door visors, fog lamps, stereo systems, seat covers and other car care products. These products are sold through dealer outlets and authorized service stations throughout India. F. N2N Fleet Management N2N is the short form of End to End Fleet Management and provides lease and fleet management solution to corporate. This fleet management service include end-to-end solutions across the vehicle's life, which includes Leasing, Maintenance, Convenience services and Remarketing. G. Maruti Driving School As part of its corporate social responsibility Maruti Udyog launched the Maruti Driving School in Delhi. Later the services were extended to other cities of India as well. These schools are modelled on international standards, where learners go through classroom and practical sessions. Many international practices like road behaviour

and attitudes are also taught in these schools. Before driving actual vehicles participants are trained on simulators.

15. Strength 1. Brand Loyalty 2.Service and Distrbution Weakness Network 1. Changing Customer 3. Japanese Technology Preferences. 2. Appears Daddy’s Brand. Opportunities Threats 1. Attraction Of Youth. 1. Foreign Brands. 2. Increasing Middle Class 2.Fuel Prices. Income. 3.Export Small Cars.

16. Competitive Advantage of MUL •Dealer network across the country wide dealership network allows the company to service customers over a wider geographical area than competitors. Currently, MUL has 500 sales outlets that cover 312 cities, as compared to 162 outlets of Hyundai Motors and 140 outlets of Tata Motors. •True Value Operations MUL providing its customers an opportunity to resale their car to MUL or exchange with a new Maruti car under its “True Value” network has proven really beneficial. In FY07 True Value network touched 10000 units a month and more than 90% of that resulted in the exchange of a new car. •Presence across segments In a car manufacturing plant, the press shop, paint shop, engine and transmission assembly, and machine shop are used for manufacturing different models. •Commonality of platforms- Commonality between the platforms of various models lead to lower product development efforts and higher benefits of economies of scale, uses only two platforms. Strong support in R & D and Product from parent - MUL’s strength lies in the strong parentage of SMC, Japan.

17. PRODUCT MIX Small Cars MUV’s SUV’s Hatch-Backs

18. Five Forces Model of Competitive Environment FIRMS IN OTHER INDUSTRIES OFFERING SUBSTITUTE PRODUCTS (Moderate) Buyers SUPPLERS RIVALRY AMONG Bargaining Bargaining Industry Power Power (High) (High) (Moderate) POTENTIAL NEW ENTRANTS (Moderate)

19. 1. Industry Rivalry A. High Fixed costs When total costs are mostly fixed costs, the firm must produce capacity to attain the lowest unit costs. Since the firm must sell this large quantity of product, high levels of production lead to a fight for market share and results in increased rivalry. The industry is typically capital intensive and thus involves high fixed costs. B. Slow market growth In growing market, firms can improve their economies. Though the market growth has been impressive in the last few years (about 8 to 15%), it takes a beat in even slight economic disturbances as it involves a luxury good. Aggressive pricing is needed to sustain growth in such situations. C. Low switching costs Free switching between products makes it difficult for the companies to capture customers. Since, the purchase of the product involves a good amount of decision making.

20. 2. Threat of substitutes A. Increasing Two wheelers/Motor Cycle Market, Because of rising fuel prices. B. Public Transportation.( Local trains, Metros, Buses) Maruti ‘s Advantage Price performance comparison favours heavily towards Maruti in most product categories. Also the high availability and quality of services offered by Maruti gives the customer a better trade-off. 3. Buyer Power A. When buyer power is strong, the buyer is the one who sets the price in the market. For Maruti , the sales volumes have shown increasing trend over past so many years. B. Difficult to measure since repurchases are rare. C. Buyers get incentives in the form of cost discounts and better after sales services.

21. 4. Supplier Power Critical Components General Components and Few Suppliers. and various Suppliers. High Supplier Low Supplier Power Power Steel is a major input in this industry and so steel prices have a sharp and immediate impact on the product price. Substitute inputs are restricted to non critical or additional components like electronic gadgets and interior design components. The industry being

capital intensive switching costs of suppliers Is high, other than steel as raw material which is highly price sensitive and the firm may easily move towards a supplier with lower cost.

22. 5. Barriers to Entry / Threat of Entry Government policies Encouragement of competition by the new policies and to avoid monopolistic Activities. Liberal policies for foreign brands to enter into India. Patents and Proprietary knowledge Maruti’s R&D capability has evolved. Its contribution to global design projects has been recognised, first with the Swift and now the Concept A-Star. Let us do more. Further, Maruti Suzuki has been rated first in customer satisfaction for eight years in a row. The same applies to the dealer practices, supply chain, quality processes, information technology, parts operations and so on. Economies of scale Economies of scale are becoming increasingly important as competition is driving the profit margins to lower levels. Also being a capital intensive industry economies of scale have important consequences

23. SUZUKI REDRAWS INDIA PLAN Suzuki Motor Corp is, reportedly, rethinking its India plans in line with market dynamics. Suzuki plans to rework its investment, product, marketing, and engineering strategies for India. As a first step, the car major effected a major organizational revamp and is all set to pump in an additional Rs 7,200 crore for upgrading Maruti Suzuki's marketing and research facilities in the country. The Rs 7,200-crore investment will add to the already earmarked Rs 9,000 crore, expected to spruce up manufacturing facilities in India. Suzuki plans to up capacity to one million units by year 2010. The Indian operations of the company are not anywhere near Suzuki Motor Corp’s output numbers. Suzuki Motor Corp still produces 1.2 million vehicles, while Maruti Suzuki is yet to reach even the million-unit mark. Aimed at establishing spare parts depots, vehicle stockyards, and display showrooms for the million units that will be produced in India, the revamp would also include the company’s research and development and engineering functions being upgraded. The company plans to set up a new research and development centre in the northern state of Haryana. Meanwhile, Maruti Suzuki has said that it has reported a 26.95 per cent increase in net profit for the quarter ended September 30, aided by a double-digit growth in its domestic market sales. The company posted a net profit of Rs 466.5 crore. While domestic sales went up 17.8 per cent to 1,79,154 units, exports almost doubled to 15,171 units. Source: The Hindu

24. Current and Future Market Strategies Design small cars suitable for the Indian conditions as a strategy to beat the stiff competition with the entry of global auto makers. Company would capitalise on Suzuki’s research and development capabilities and internal resources to finance its expansion, thereby cushioning itself from the higher interest rates and borrowing costs and become cost competitive. Company’s plan to stay away from the ultra low-cost segment. Maruti Suzuki is looking to make India an exclusive base to manufacture small cars for Europe.

25. Current Maruti Suzuki’s India News Maruti expects to grow 5-7 per cent in February 2009 Tuesday February 17, 2009 Maruti Suzuki India Limited (MSIL), after reporting the highest ever monthly sales in January this year, is expecting a sales growth of between 5 and 7 per cent in February as well. The company increased its production in January and is continuing the same this month, in order to meet growing demand. Its three hot selling models - the DZire. Maruti Swift touches 3 lakh sales mark Tuesday February 17, 2009 Maruti Suzuki’s premium hatchback, the Maruti Swift, crossed the 3 lakh sales mark this week, becoming the fastest car model to reach that milestone, in India. It took Maruti 3 years and 6 weeks to sell 3 lakh units of the Swift. Company representatives said that an online club for all Swift owners, known as the ‘Swift Life’, is being set up. Maruti Suzuki sales up 5.6 per cent in January; others go down Tuesday February 3, 2009 After three months of declining sales, Maruti Suzuki has registered a growth of 5.6 per cent in domestic sales in January 2009. The company sold 67,005 cars last month, as against 63,253 units in the corresponding period the previous year. Auto industry

experts have attributed this growth to the massive discounts offered by Maruti on its models. Maruti ties up with Corporation Bank Friday February 6, 2009 Following Hyundai’s tie-up with Syndicate Bank and Tata Motors’ tie up with the State Bank of India, the country’s biggest carmaker – Maruti Suzuki too has decided to work with the Corporation Bank to sell its cars. The bank announced yesterday that it had tied up with Maruti to finance the company’s vehicles.

26. Maruti Suzuki Heads with a Green Approach Practicing 3R Maruti Suzuki defines 3R as reduce, reuse, and recycle. The company is in continuous process of promoting 100% recyclable and reusable car parts. It also targets reducing fresh water consumption and implement rain water harvesting. Promoting Green Procurement Maruti Suzuki is also encouraging its customers to act upon environment friendly approach. Even at the supplier’s end the company conducts regular training and education programmes. Along with the suppliers, such sessions are also held at all possible places comprising people from all arenas of the car industry. Promoting Energy Conservation Excelling in spreading the need of eco-friendly car technologies for car industry, Maruti Suzuki also promotes energy conservation. It does this through various initiatives, education, and improvements on the shop floor. In recent years, the adoption of energy saving technologies has increased tremendously.

27. Some Word About MARUTI SUZUKI INDIA LIMITED (MSIL) "One of Maruti's great strengths is that we have internal resources to finance both R&D expansion as well as capital investments. The higher interest rates, and the risk of making large borrowings to finance capital costs, will not affect us.“ --Chairman "The employees of Maruti, whether they are technicians, engineers or sales persons, have fully imbibed the Japanese work culture of making constant improvement, and placing the prosperity of the Company as the means of their own advancement.“ --- Chairman Maruti Suzuki is now very much on the global map, recently being rated as the fourth most reputed automobile company in the world. This has happened because of the Contribution of all the stakeholders of Maruti.

Maruti market expantion startegies of maruti - Presentation Transcript

1. CASE STUDY ON MARKET EXPANTION STARTEGIES OF MARUTI UDYOGPresented by:Ajay KumarMunish Kumar

2.o In 1982, Government of India entered into a joint venture with Suzuki motor corporation of Japan

o Plant was established at Gurgaon in Haryana

3.o Launched its first model M-800 on December14, 1983

o Maruti Gypsy in 1985

o SMC’c share increased from 26% to 40% in 1987

o Maruti 1000 launched in 1990

o Liberalization of Indian economy in 1991

o Maruti Zen launched in 1993

o Delicencing of passenger car industry in 1993

4. Maruti 8005.o Paved way for global players like….

6.o Maruti esteem launched in 1994, production reached one million cars

o Difference of opinion between GOI and SMC regarding appointment of MD in 1997

o Production reached 2 million cars in 1997

o Maruti baleno and wagonR launched in 1999

o Alto Lx and Alto Vx1 launched in 2000, production reached 3million

7.o Suzuki takes over control in Maruti Udyog by hiking its stake in the company from 50% to 54.2%,

Maruti Udyog becomes the subsidiary of Suzuki in 2002

o Alto declared Best selling car in India in 2004

o Unveils Versa Variant At Rs 3.27 Lakh in same year

o Launched “2599’, &“Teacher plus” schemes to increase sales of M-800

8. COMPETITIVE FORCES IN INDIAN PASSENGER CAR MARKET9. SWOT Analysis of Maruti Udyog10. TOWS MATRIX11. GENERIC COMPETITIVE STRATEGIES

Lower cost DifferentiationBroad targetNarrow target

12. TURN AROUND STRATEGIES

o In wake of diminishing profits and market share Maruti initiated strategic responses with India’s liberalization process:

This can be observed from mission statement of Maruti1984: “Fuel efficient vehicle with latest technology”1997: “Creating customer delight and shareholders wealth” TO

13. BCG Matrix with respect to Maruti models14. Q1:What was the rationale for MUL to adopt promotions like “2599”, “Teacher plus”, and “Do se char”

offers? Do you think MUL’s sales promotion campaign was effective?Rationale:

o Because of focus strategy Maruti want to convert two

wheelers owners to four wheeler owners

o Want to penetrate at the bottom of the pyramid

Campaign effectiveness: Not effective

o M-800 was mini segment and people getting Alto compact

segment car by just paying little extra

o M-800 on the declining stage of product life cycle

o Unattractiveness among people due to old design where as

Alto was present with contemporary design15. Sales of M-800

Sales of Alto16. Q2:Discuss the implications of MUL’s premium compact car ‘swift’ priced at Rs. 3,87,000 for its

competitors. Also, given that its compact car, wagon R, is available in the same price range, discuss the steps MUL must take to prevent the cannibalization of its sales.A:

o Swift was launched with price competitive strategy

o Direct competition with Hyundai Getz (Rs. 4,50,000)

o As both brands are known for their value price offering Swift

definitely has an edge over its direct competitor Getz due to:- Brand image & strong service centre Steps to prevent cannibalization:

o Focus on advertising based on benefits to differentiate themselves in the market.

o Swift was a hatchback model so MUL should position swift as an next value product in between compact and mid size car

17. Q3: MUL prides itself in providing the lowest priced car(M-800) to its customer, Tata motors intends to launch the Rs. 1,00,000 car by 2008. What, in, your opinion, would be the implementation of this launch for MUL?

18. A: Implications for MUL:

o It will cannibalize the sales of M-800

o If the car has contemporary design and Euro 4 norms it will the only car available in mini car segment as Maruti has euro 3 norms

o With this Tata will penetrate towards the lower segment of value pyramid which is providing maximum market share to Maruti

Steps to counter Nano effect:New contemporary design should be launchedReduce the engine capacity to make it price effective and milegeable

19. Q4: Refering to the availability of pre-owned cars, an industry analyst said, “If the customer get a santro or wagon R for the prices of an 800, why would he prefer the small car?” In light of this statement, how can MUL differentiate its promotional campaigns between its new and pre-owned/used car market?A:

o Maruti should launch advertising campaign to arouse feeling in you or reminding your dreams of a new car

o It should give a customized car

o Should introduce peace of mind concept in advertisement campaign

o It may use promotional campaign to reduce perceived risk in the mind of customer regarding pre-owned cars

o promotional campaign which enlighten warranty given in pre-owned cars

20. THANK YOU….Any Suggestions?KIZASHI

MARUTI UDYOG LTD - Presentation Transcript

1. Case study MARUTI UDYOG LIMITED “ Maruti’s Thinking Brains” BUSINESS ENVIRONMENT & STRATEGIC ANALYSIS AMITY BUSINESS SCHOOL 24 th March 2009

2. GROUP MEMBERS

o Himanshu Ahuja

o Madhav Gulati

o V.Karthik

o Jagpreet Singh

o Kshitij Khanna

3.o Maruti Udyog Limited (MUL) was established in Feb 1981 through an Act of Parliament, to meet

the growing demand of a personal mode of transport caused by the lack of an efficient public transport system.

o Today,it is the largest automobile company in India

INTRODUCTION4. Market leader in the car segment, both in terms of volume of vehicles sold and revenue earned .

18.28% of the company is owned by the Indian government, and 54.2% by Suzuki of Japan.

5. Targeting

o Maruti was introduced targeting the middle class

o Its target segments are well depicted in its Product Pyramid profit model

o Targeting was based on a variety of factors such as style, color, price preference, features etc

3 – 5 lakhs 5 – 10 lakhs 15 – 30 lakhs < 3 lakhs Maruti 800, Alto, Omni Maruti Zen, Wagon R, Versa, Esteem, Swift Maruti Baleno, SX4 Maruti Suzuki Grand Vitara,

6. Strategies:

7. 1) PRICING STRATEGY

o caters to all segment and has a product offering at all price points

o Their pricing strategy is to provide an option to every customer looking for up gradation in his car

8. 2) CREATING DIFFERENT REVENUE STREAMS

o Maruti Finance

o Maruti Insurance

o Maruti Driving School (MDS)

9. 3) CORPORATE STRATEGIES: STABILITY

o Maintaining status quo due to limited environmental opportunities for gaining competitive advantage

o Few employees will have opportunities for advancement

o Critical that management identify key employees and develop specific HR retention strategies to keep them

10. 4) REPOSITIONING OF MARUTI PRODUCTS

o Whenever Maruti’s brand grew old or its sales started dipping ,it

o made the following efforts in the same field:

o Omni – interiors & exteriors, Omni cargo,& CNG Omni

o Versa – slashed prices by decreasing engine power

o Esteem – new look to boost sales

o Baleno – price slash from 1999 (7.2lacs) to 2003 (5.46)

o WagonR – modifications in engine and sporty look

o Zen- Modified 4 times and special editions

o Maruti 800- Introduced modified accessories .

11. 5) Differentiation

o In order to demand a premium price from consumers

o – By attempting to distinguish organizational products or services from other competitors

o Organization offers employees incentives and compensation for creativity

o HR strategy focuses on external hiring of unique individuals, and on retaining creative employees

12. SWOT ANALYSIS OF MARUTI UDYOG

13.o Threats

o Competition from second hand cars & TATA Nano

o Threats from Chinese manufactures

o Opportunities

o Increased purchasing power of Indian middle class category

o Government subsidies

o Tax benefits.

o Prospective buyers from the two-wheeler segment.

o Weaknesses

o Lack of experience with foreign market

o Comparatively new to diesel cars.

o People resistant to upper segment models.

o Heavy import tariffs on fully built imported models.

o Strengths

o Established distribution & after sales network

o Understanding of the Indian market

o Ability to design products with differentiating features

o Brand image

o Experience & know how in technology

14. Product Life Cycle

15. PRODUCT LIFE CYCLE

o 1) Introduction Stage

o Market share and growth is slight.

o Substantial research and development costs have been incurred.

o Marketing costs may be high in order to test the market, undergo launch promotion and set up distribution channels.

o Highly unlikely that companies will make profits on products.

o Example- A-Star, Swift Dezire

16. Contd….

o 2) Growth Stage

o Characterized by rapid growth in sales and profits.

o Profits arise due to an increase in output (economies of scale).

o Significant promotional resources are traditionally invested in products that are firmly in the Growth Stage.

o Cheaper for businesses to invest in increasing their market share.

o Example -Swift, Zen Estilo

17. Contd…

o 3) Maturity Stage

o Competition is most intense as companies fight to maintain their market share.

o Any significant moves are likely to be copied by competitors.

o The Maturity Stage is the time when most profit is earned by the market as a whole.

o Any expenditure on research and development is likely to improve production efficiency and quality.

o Example -Alto, Wagon-R

18. Contd….

o 4) Decline Stage

o Market is shrinking, reducing the overall amount of profit.

o Possible to take out some production cost, to transfer production to a cheaper facility, sell the product into other, cheaper markets.

o Depending on whether the product remains profitable, a company may decide to end the product.

o Care should be taken to control the amount of stocks of the product.

o Example -Baleno, Esteem

19.o Dogs

o Omni

o Versa

o BALENO

o Cash Cows

o Maruti 800

o Wagon R

o Alto

o Question marks

o SX4

o A STAR

o Stars

o Maruti Zen

o Swift

BCG Matrix DIVEST DIVEST/ LIQUIDATE20. OMNI BALENO VERSA HARVEST, DIVEST, LIQUIDATE LOW LOW, UNSTABLE LOW LOW Maruti 800 ALTO

Wagon R Maintain MKT DOMINANCE & LEADERSHIP LOW HIGH, STABLE LOW HIGH SX4 A Star HARVEST, DIVEST HIGH LOW, UNSTABLE, GROWING HIGH LOW SWIFT, ZEN INVEST, INTEGRATE, TAKE OVER HIGH HIGH, STABLE, GROWING HIGH HIGH Egs: STRATEGY CASH NEEDS EARNINGS GROWTH RATE MKT SHARE

21. GE matrix Harvest OMNI Harvest VERSA Selectivity/ Earnings WAGON R Low Harvest BALENO Selectivity/ Earnings SX4 Investment and growth (G) SWIFT DEZIRE Medium Selectivity/ Earnings A STAR Investment and growth (G) ALTO Investment and growth (G) SWIFT High Low Medium High Business strength - Size - Growth - Share - Position - Profitability - Margins - Tech. Position - Image - People Industry attractiveness – Size, Market Growth, Pricing, Mkt. Diversity Competitive Structure, Industry Profitability

22. Porter’s 5 Forces Model

23.o Intense

o players

o Better

o technology

- Presence of substitute inputs is high. -switching costs of suppliers is higho Product differentiation is high.

o - Buyers get incentives in the form of cost

o discounts and better after sales services.

o Government policies

o Patents & Proprietary knowledge

o Asset specificity

o Economies of scale

o Industry concentration

o High fixed cost

o Diversity

o Low switching cost

THREATS OF BARGAINING BARGAINING THREAT OF RIVALRY FORCES NEW POWER OF POWER OF SUBSTITUTE AMONG ENTRANT BUYERS SUPPLIERS PRODUCT COMPETITORS RESULT

24. McKINSEY 7s FRAMEWORK

25. McKINSEY 7’s

o Strategy : the plan devised to maintain and build competitive advantage over the competition.

o Structure : the way the organization is structured and who reports to whom.

o Systems : the daily activities and procedures that staff members engage in to get the job done.

26. Contd…

o Shared Values : called "superordinate goals" when the model was first developed, these are the core values of the company that are evidenced in the corporate culture and the general work ethic.

o Style : the style of leadership adopted.

o Staff : the employees & their general capabilities

o Skills : the actual skills and competencies of the employees working for the company.

27.o THANK YOU…

Maruti driving a nation by Sultan Omar

October 28, 2002

Often referred to as the Beetle's reincarnation, Maruti

has been India's largest selling car for nearly two

http://www.brandchannel.com/features_profile.asp?pr_id=96#author

decades and is practically etched into the nation's

psyche. As foreign automakers look to break into the

tremendous Indian market, what lessons can they

learn from a car company that so completely

dominates its home market? One might imagine that a car brand that redefines the meaning of personal transport in a country of a

billion people must be pretty powerful. And yet the unassuming people's car, the Maruti 800 (always

referred to by its cubic capacity), has ruled the Indian roads for almost two decades and keeps the

cash registers ringing for its manufacturer – the Suzuki Motor Corporation, acclaimed for its small car

ingenuity worldwide.

Not surprisingly, the name Maruti has become generic for "small car" in India, since it is invariably

most Indian's first car. It is probably also the world's cheapest car, priced at US$ 5,000. Considering

the car's accessibility, Maruti's tagline "Realize your dreams" seems especially apt.

The car's humble beginning dates back to the year 1982 when Suzuki Motor Corporation entered into

a joint venture with the Government of India to manufacture fuel-efficient passenger cars under the

brand name Maruti (a winged Hindu deity) at its plant outside Delhi. The company was christened

Maruti Udyog Limited (MUL), and the first car rolled off the lot in December 1983 with a 796cc 3-

cylinder engine that delivered 39.5 bhp at a very affordable price of US$ 960. Additionally the car

ushered in a work culture and Japanese philosophy for super-efficient manufacturing. It was a formula

that brought about the renaissance of the Indian components industry, rebuilding it from scratch over

20 years.

Doubting Thomases wrote the car off as a "matchbox" for its diminutive proportions and pronounced it

likely to cave in at the slightest bump. But the seemingly innocuous-looking car proved that looks are

deceptive when it debuted on the Indian roads. For its tiny dimensions the car was surprisingly

spacious enough to carry four adults. It did its job with great élan and proved a delight to drive in start-

stop city traffic. Suzuki's precision technology coupled with Maruti's sheer determination and will to

attain high levels of indigenousness have enabled a value-for-money pricing strategy for its vehicles.

Buoyed by the 800's success, MUL launched the car's van avatar, the Omni, in 1984. The van was an

instant hit among large families and taxi operators who took to its sheer functionality and economy.

Between 1973 and 1983, the year Maruti 800 made its advent, the Indian car market had stagnated at

a total volume of 35,000 cars. Maruti 800 was the change agent, reaching a total production of 1

million vehicles in March 1994. It crossed the 2 million mark in 1997. Together, 2.5 million units of the

two models (Omni) have been sold so far, representing a staggering 50 percent of all cars sold in

India in the last 18 years.

Over its lifetime the Maruti 800 has been put to the test on the most severest of Indian terrain (known

for its inhospitable nature) by the most insensitive Indian drivers, but the car's excellent

maneuverability assisted by a lightweight body structure weighing all of 665kgs with an efficient small

capacity engine makes it extremely drivable, leaving its critics behind. There have been numerous

instances where the Maruti 800 has registered six digit mileage measurements on the speedometer

without an engine overhaul. The car's versatility can be gauged from the fact that it has assumed

every role for which it was not originally conceived. But the USP of this car, which makes it all the

more invincible and enviable, is its unmatched fuel efficiency of 16-18 kilometers per liter under any

circumstances coupled with ridiculously cheap spares backed by a nationwide strong sales and

service support. No other car on Indian roads is more economical to own and run, with spare parts

available on virtually every corner of the sub-continent.

The road to fame was not easy for Maruti. For over a decade, MUL's focus had been churning out as

many 800s as possible, rather than doing anything to the car itself. The only major facelifts given to

the car were in 1986 and 1997 with the body exteriors. When competition arrived in 1999 from the

Korean carmakers Hyundai and Daewoo in the form of flagship brands Santro and Matiz, Maruti 800's

near ten-year monopoly came under fire.

Maruti became further waylaid when India's second largest automaker, Telco, challenged the

automaker for non-compliance with Euro2 emission norms. Suzuki responded aggressively by

transplanting the car's engine with a modern MPFI unit and improved the car's breathing

characteristics through a 4-valve-per-cylinder head; a new 5-speed gearbox further complemented

the engine. The result was a zippier Maruti 800, which delivered 47 horses from the same 800cc

displacement and achieved a top speed of 140kph. The car was widely acclaimed as a wolf in

sheep's clothing.

Over the years, Maruti has quietly set the stage for the successful launch of Suzuki's international

range in the Indian car market by way of the Zen, Alto, Wagon R, Gypsy, Esteem/Swift, Versa and the

Baleno, all backed by the inherent value proposition of high on quality, fuel efficient, and compared

with the competition, low in cost. This formula has been largely responsible for a new generation of

Indian car users swearing by the Maruti brand name.

Maruti 800 also holds the distinction of being the first "made in India" car to be exported to select

European and South American markets. In 2000, MUL was the lead in its home market and in the JD

Power Customer Satisfaction study.

However, today the Indian car market is in a transition phase with the Maruti 800 steadily losing

market share to bigger hatchbacks. Although the car retains its numero uno status, its market share

http://www.jdpower.co.jp/press/001023auto.html

http://www.jdpower.co.jp/press/001023auto.html

has declined from 49.5 percent in 1991 to a modest 21.7 percent now. Realizing that the 800 is

toward the end of its product lifecycle, Suzuki has conceived the AltoLX as its replacement. The

AltoLX has Maruti’s 800cc engine bolted on to a contemporary chassis, which conforms to the latest

safety norms.

Despite the passing of the torch, for now Maruti 800 remains the best-selling car in India since its

launch two decades ago. Its low cost structure remains unmatched even today. No manufacturer, not

even MUL itself, would be able to make a car like the 800 today, at the same price. The very fact that

Maruti 800 still adorns the porch of millions of Indian houses is itself a tribute to the inherent strength

of the car. As foreign automakers make a beeline for the still virgin Indian automobile market, Maruti

800 continues to gratify the basic commuter needs for the common Indian. It will go down in

automotive history as a car that put a nation on wheels.

Sultan Omar is a Business Development executive with a leading architecture company. He has an

MBA in Marketing from the Amity Business School and lives in New Delhi.

Maruti Suzuki India Limited, the leader in Indian car market, has bagged the ‘Golden Peacock Eco-Innovation Award’ for adopting environment friendly technology in its products and processes.The award was presented to the company by the World Environment Foundation during the recently organized ‘Global Convention on Climate’ in Palampur, Himachal Pradesh.An eminent jury, under the Chairmanship of Justice P N Bhagwati, former Chief Justice of India and Member, United Nations Human Rights Commission, selects the winner. The criterion of the award was based on a product or service, which shows a quantum jump in the usage of current technology to achieve maximum customer satisfaction at a minimum cost.Speaking on the occasion, Mr. MM Singh, Managing Executive Officer (Production) Maruti Suzuki said, “We are committed to contribute to the cause of environment by constantly bringing in green technology into our products and processes. We are very happy that our efforts towards a greener environment have been recognized. This award will provide us with further fillip to explore and research for new avenues to go green.”Maruti Suzuki was short-listed for the award for two landmark initiatives taken towards reduction in the green house gas emissions throughout the life cycle.First, the company launched K-series engines, that are ready for future emission norms,. This series includes engines that are compliant with BS-III, BS-IV norms (the currently applicable environment norms in India) as well as the Euro-V (for the European markets). These engines are highly fuel efficient while being very low on CO2 emission. The K series engines are used in the recently launched Maruti Suzuki Ritz as well as A-star in India. The A-star is exported as Suzuki Alto to the European markets. The Suzuki Alto is Euro-V compliant and has CO2 emissions as low as 103g/km.Maruti Suzuki’s parent company, Suzuki Motor Corporation, Japan has designed the K-series engines with an aim to play an important environmental role globally, by introducing Green Engine technology that is vital for reducing CO2 emissions and enhancing fuel consumption.

mailto:[email protected]?subject=regarding%20your%20Maruti%20profile%20on%20brandchannel

The KB engine plant at Maruti Suzuki’s Gurgaon manufacturing plant is a masterpiece, boasting of energy efficient, environment friendly manufacturing facility.The second initiative that helped Maruti Suzuki bag the award was the company’s initiative to use specially designed double-decker railway rakes for dispatching cars as opposed to the conventional use of trailers. This, first of its kind initiative in India helps in transporting cars in highly efficient manner, at much lower costs and impact on environment.The ‘Golden Peacock Eco-Innovation Award’ is given annually to the most innovative product satisfying the customers’ long-term needs in a most cost-effective manner. This international certification is awarded to a company only when it demonstrates its commitment and compliance to environmental concerns; ensure quality, especially in terms of customer satisfaction; and taking adequate health and safety measures to contain risks and hazards to its workforce.The World Environment Foundation (WEF) is one of the leading non-profit, non-governmental organizations solely dedicated to the improvement of the environment and the sustainable development.

Zen-Next. No more!Dropping a successful 17 year-old brand isn’t an easy task... Pawan Chabra questions whether Maruti is doing the right thing by killing the Zen!

“Zen is a brand which I have grown up with and it is more than a car to me,” asserts Ankush Kohli who drove the ‘Jellybean’ Zen for a decade, and has been associated with the Maruti Zen brand since then. (He even purchased the ‘Teardrop’ Zen Estilo for his wife in 2008.) But then, only change is evitable; for many like Kohli today, the fact is that the Zen brand no longer remains ‘the’ banner brand for Maruti Suzuki (even he drives a Maruti Swift today). And as far as the management was concerned, it was all made clear with the launch of the new Estilo in

August 2009, during which, Maruti declared that the company would now promote the Estilo brand and Zen will only be engraved accompanying the Estilo tag – in other words, reduced to a ‘dormant’ brand!

There is no questioning the fact that the Zen has been one of the cash cows for Maruti in the Indian market. The company sold a mind-boggling 7,60,000 units of the ‘Jellybean’ Zen in 14 years (before it was replaced with the ‘Teardrop’ Zen Estilo in 2006) – no mean feat by any standards. But it was perhaps after the advent of the ‘Johnny-come-lately’s’ that the Zen took a beating. The launch of the tall boyish Hyundai Santro and WagonR pushed back the sales of the Zen, which had started to fall faster than anticipated by most critics. That set all minds at Maruti working towards a replacement model. In fact, the nation’s largest automaker also spent a considerable time in building-up the WagonR brand in the Indian automotive market, all at a time when the Zen was being cannibalised, witnessing falling sales, quarter after quarter. But the new ‘Teardrop’ version of the Zen was able to somehow successfully make a mark for itself in the Indian market as Shashank Srivastava, Chief General Manager – Marketing, Maruti Suzuki affirms, “It was selling on an average of 3,000 units per month, which was more than GM’s Spark sales which accounts for its 80% of GM’s sales in the country...” One can always argue that it is still lower than the standards set by the entry level Alto and the youthful A-star, but the numbers are credible when it comes to reviving the brand and the product Zen, especially when it had almost reached the plateau of the Brand Life Cycle. Today, the automaker, which replaced the Maruti logo with a Suzuki logo some time back (to give its customers the feel of its ‘realigned superior technology and radical design’ focus), is quite pleased with the performance of the Zen Estilo during the initial months of its introduction. All said and done, the question remains – does it make sense to phase out over time (which is a definite possibility) a brand (Zen), which is today amongst the most recalled brands in the automotive sphere and has had a splendid run in the Indian market?

To establish Estilo brand in the Indian automotive market, the company is using the brand alone in its 360 degree integrated marketing campaign. “It was a part of the long-term plan to establish the Estilo brand first in the Indian market with the launch of the Zen Estilo and eventually take the Zen brand out of the umbrella,” explains Mayank Pareek, Managing Executive – Sales & Marketing, Maruti Suzuki. But ask Srivastava and you’ll see the management philosophy being shot in another direction as he claims, “The Zen Estilo was totally different from

the old Zen, and is therefore today one of the most interesting marketing case studies as the Zen Estilo didn’t match the Zen brand one bit.” However, Srivastava takes no time in further disclosing that the seeds for phasing out the Zen brand was sown on the basis of customer feedback and the confusion in positioning of the vehicle ignited the fire. “We initially planned to position Zen Estilo as a synonym for style but with the use of a female model in our communication and some feminine colours, the Zen Estilo was perceived a vehicle made for girls and hence we missed out on many consumers,” he said. However, as mentioned earlier, for now, the company has no intentions to kill the Zen brand completely; of course, they don’t mind its dormancy...as “the Zen brand is one of the most reputed and recalled in the industry, and has a huge set of loyal consumers for whom Zen is more than a car,” adds Srivastava.

Yes, critics argue that eight products in the A2 (hatchback) category may just create cannibalism within the Maruti umbrella, but the management discards all such fears; one of whom is Shinzo Nakanishi, Managing Director, Maruti Suzuki, who avers, “Maruti Suzuki has been very successful in drawing segments within the A2 segment and this is the way the industry will drive the growth forward taking it to the other segments as well.” Well, the management seems very clear on the positioning there... But just a thought – what if the A-star had that Zen tag on it? Wouldn’t it have worked just fine? “Values of the Zen brand were matching more with the A-Star but we had just launched the Zen Estilo around 4-5 months earlier. So the A-star became an altogether different brand. But you never know, it may have repeated the success if the Zen brand had been used with the A-star,” opines an optimistic Srivastava.

Optimistic indeed, but isn’t it also a fact that the Indian consumers seem to lap up everything that bears the ‘Maruti’ tag? Pray, don’t drop that...

Pawan Chabra

"Count on Us" - Maruti Suzuki

Maruti Udyog Ltd. (MUL) is the first automobile company in the world to be honoured with an ISO

9000:2000 certificate. The company has a joint venture with Suzuki Motor Corporation of Japan. It

is said that the company takes only 14 hours to make a car. Few of the popular models of MUL are

Alto, Baleno, Swift, Wagon-R and Zen.

Quick Facts

Year of Establishment February 1981

Vision "The Leader in The Indian Automobile Industry, Creating Customer Delight and Shareholder's Wealth; A pride of India."

Industry Automotive - Four Wheelers

http://www.surfindia.com/automobile/suzuki-motor-corporation.html

Listings & its codes BSE - Code: 532500NSE - Code: MARUTI Bloomberg: MUL@IN Reuters: MRTI.BO

Joint Venture With Suzuki Motor Company, now Suzuki Motor Corporation, of Japan in October 1982.

Registered & Corporate Office

11th Floor, Jeevan Prakash25, Kasturba Gandhi MargNew Delhi - 110001, India Tel.: +(91)-(11)-23316831 (10 lines)Fax: +(91)-(11)-23318754, 23713575 Telex: 031-65029 MUL IN

Works Palam Gurgaon Road Gurgaon -122015 Haryana, India Tel.: +(91)-(124)-2340341-5, 2341341-5

Website www.marutiudyog.com

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Segment and Brands

Products Brands

Four Maruti 800 Maruti Alto Maruti Baleno

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WheelersMaruti Esteem

Maruti Grand Vitara XL-7

Maruti Gypsy King

Maruti Omni Maruti Suzuki SX4 Maruti Swift

Maruti Versa Maruti Vitara Maruti Wagon-R

Maruti Zen Maruti Suzuki A-StarMaruti Suzuki Swift Dzire

Maruti Suzuki Zen Estilo

Maruti Suzuki Ritz new Maruti Eeco new

Maruti Cervonew

Awards & Accolades

2010 Maruti Suzuki manufactures 10 lakh units in 2009-10.

2009 Maruti Suzuki Swift becomes fastest to reach 3-lakh milestone.

Maruti Suzuki A-star breaks own record of fuel efficiency.

Maruti Suzuki wins 'Golden Peacock Eco-Innovation Award'.

Haryana allots 700 acres to Maruti Suzuki for hi-tech R&D complex at Rohtak.

Maruti Suzuki ships out 100000th A-star in less than a year.

ICSI awards top honours to Maruti Suzuki for corporate governance.

2008 Maruti Suzuki becomes the first Indian car company to export half a million cars.

Maruti Suzuki Ranks Highest in Automotive Customer Satisfaction in India For Ninth Consecutive Year.

Maruti Suzuki moves A-star for Europe on Auto Wagons .

Maruti Suzuki displays Fuel Efficiency of its 12 brands from the New Year .

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2007 Maruti Alto becomes first car in India to cross 2 lakh domestic sales in a fiscal.

Maruti Suzuki MD conferred a Doctorate (Honorary) by London Metropolitan University.

Global launch of Concept Car from Maruti Suzuki

Maruti's highest ever sales.

2006 UGS Asia Pacific PLM Excellence Award Grand Prize.

Maruti and Magma in pact for financing cars .

2005 Number one in JD Power SSI for the second consecutive year.

Number one in JD Power CSI for the sixth time in a row - the only car to win it so many times.

M800, WagonR and Swift topped their segments in the TNS Total Customer Satisfaction Study Leadership in the JD Power Initial Quality Study - Alto number one in its segment for the 2nd time in a row, Esteem number one in its segment for the 3rd year in a row, Swift number one in the premium compact segment.

WagonR and Esteem top their segments in the JD Power APEAL study.

TNS ranks Maruti 4th in the Corporate Reputation Strength (CSR) study (#1 in Auto sector)-Feb 05.

Maruti bagged the "Manufacturer of the year" award from Autocar-CNBC (2nd time in a row)-Feb 05.

First Indian car manufacturer to reach 5 million vehicles sales.

Business World ranks Maruti among top five most respected companies in India-Oct 04.

Maruti ranked among top ten (Rank7) greenest companies in India by Business Today - Sep '04

2004 Maruti Suzuki was No. 1 in Customer satisfaction, No. 1 in Sales Satisfaction No.1 in Product Quality (Esteem and Alto) and No. 1 in Product Appeal (Esteem and Wagon R).

No. 1 in Total Customer Satisfaction (Maruti 800, Zen and Alto).

Business World ranked us among the country's five most respected companies.

Business World ranked us the country's most respected automobile company.

Voted Manufacturer of the year by CNBC.

Voted one of India's Greenest Companies by Business Today-AC Nielson ORG-MARG.

Milestones

1981 Maruti Udyog Ltd. was incorporated.

1982 Steped into a JV with SMC of Japan.

1983 Maruti 800, a 796 cc hatchback, India's first affordable car was produced.

1984 Installed capacity reached 40,000 units. Omni, a 796 cc MUV was in production.

1985 Launch of Maruti Gypsy (970cc, 4WD off-road vehicle).

1986 Produced 100,000 vehicles (cumulative production).

1987 Exported first lot of 500 cars to Hungary.

1988 Installed capacity increased to 100,000 units.

1992 SMC increases its stake to 50 per cent.

1994 Produced the 1 millionth vehicle since the commencement of production.

1995 Second plant launched, the installed capacity reached 200,000 units.

1996 Launch of 24-hour emergency on-road vehicle service.

1997 Produced the 2 millionth vehicle since the commencement of production.

1998 Launch of website as part of CRM initiatives.

1999 Launch of Maruti - Suzuki innovative traffic beat in Delhi and Chennai as social initiatives.

2000 IDTR (Institute of Driving Training and Research) launched jointly with Delhi government to promote safe driving habits.

2001 Launch of customer information centers in Hyderabad, Bangalore, and Chennai.

2002 SMC increases its stake to 54.2 per cent.

Launch of Maruti Finance with 10 finance companies in Mumbai.

Start of Maruti True value in Mumbai.

2003 Production of 4 millionth vehicle.

Listed on BSE and NSE after a public issue oversubscribed 10 times.

2004 Maruti closed the financial year 2003-04 with an annual sale of 472122 units, the highest ever since the company began operations 20 years ago.

2005 The fiftieth lakh car rolls out in April, 2005.

2006 Maruti and Magma in pact for financing cars .

2007 Maruti starts driving and Technical Training Institute for Tribal Youth.

2008 Maruti Suzuki inks agreement with Mundra Port for a mega car Terminal for Exports.

2009 Maruti Suzuki launched premium hatchback Ritz on May 15.

2010 Maruti Suzuki manufactures 10 lakh units in 2009-10.

Company FlashbackMaruti Udyog Limited (MUL), established in 1981, had a prime objective to meet the growing demand of a personal

mode of transport, which is caused due to lack of efficient public transport system. The incorporation of the company

was through an Act of Parliament.

Suzuki Motor Company of Japan was chosen from seven other prospective partners worldwide. Suzuki was due not

only to its undisputed leadership in small cars but also to commitments to actively bring to MUL contemporary

technology and Japanese management practices (that had catapulted Japan over USA to the status of the top auto

manufacturing country in the world).

A licence and a Joint Venture agreement was signed between Government of India and Suzuki Motor Company (now

Suzuki Motor Corporation of Japan) in Oct 1982.

The objectives of MUL, then are as cited below:

Modernization of the Indian Automobile Industry.

Production of fuel-efficient vehicles to conserve scarce resources.

Production of large number of motor vehicles which was necessary for economic growth.

In 2001, MUL became one of the first automobile companies, globally, to be honoured with an ISO 9000:2000 certificate. The production/ R&D is spread across 297 acres with 3 fully-integrated production facilities. The MUL plant has already rolled out 4.3 million vehicles. The fact says that, on an average two vehicles roll out of the factory in every single minute. The company takes approximately 14 hours to make a car. Not only this, with range of 11 models in 50 variants, Maruti Suzuki fits every car-buyer's budget and any dream.

Documents

Maruti Suzuki