1 | P a g e

SUBMITTED BY- GROUP 18

A.M.PRADEEP KUMARAN 0002/51

ANKEETA 0044/51

AMANPREET SINGH 0033/51

ANUPRIYO MUNDAL 0062/51

MARKETING MANAGEMENT-1: ASSIGNMENT

SEGMENTATION, TARGETING AND POSITIONING

MARUTI SUZUKI INDIA AND HONDA MOTORS INDIA

“WHEN THE JAPANESE GIANTS WENT TO BATTLE IN INDIAN

GROUNDS....”

2 | P a g e

Table of Contents

1 .OUTLOOK: AUTOMOBILE INDUSTRY IN INDIA ............................................................................... 3

(a) EVOLUTION OF AUTOMOBILE INDUSTRY IN INDIA .......................................................... 3

(b) KEY PLAYERS AND PRODUCTS .............................................................................................. 3

(c) GOVERNMENT INITIATIVES .................................................................................................... 5

(d) FACTORS DETERMINING THE GROWTH OF THE INDUSTRY ........................................... 5

(e) INDUSTRY PERFORMANCE IN FY 2014-2015 ........................................................................ 5

2. BASICS OF STP OF PASSENGER CARS IN INDIA............................................................................... 6

3. MARUTI SUZUKI INDIA LIMITED AT A GLANCE ........................................................................... 10

4. HONDA CARS INDIA LIMITED AT A GLANCE ................................................................................ 12

5. SEGMENTATION, TARGETING AND POSITIONING BY COMPANIES ......................................... 13

MARUTI SUZUKI INDIA ...................................................................................................................... 13

PRODUCT MIX .................................................................................................................................... 14

(a) MARUTI ALTO 800 .................................................................................................................... 15

(b) MARUTI ALTO K10 .................................................................................................................. 16

(c) MARUTI WAGON R AND STING RAY: .................................................................................. 17

(d) MARUTI CELERIO: .................................................................................................................... 18

(e) MARUTI SWIFT: ......................................................................................................................... 19

(f )MARUTI RITZ: ............................................................................................................................ 20

(g) MARUTI SWIFT DZIRE: ............................................................................................................ 21

(h) MARUTI SUZUKI SX4: .............................................................................................................. 22

(i) MARUTI ERTIGA: ....................................................................................................................... 23

(j) MARUTI OMNI AND EECO: ...................................................................................................... 24

(k) MARUTI GYPSY AND GRAND VITARA: ............................................................................... 25

HONDA CARS INDIA : ........................................................................................................................... 26

PRODUCT MIX: ................................................................................................................................... 26

(a) HONDA BRIO : ............................................................................................................................ 27

(b) HONDA AMAZE :........................................................................................................................ 28

(c) HONDA CITY: .............................................................................................................................. 29

(d) HONDA CRV: .............................................................................................................................. 30

(e) HONDA MOBILIO: ...................................................................................................................... 31

6. FUTURE PRODUCTS : ............................................................................................................................ 32

MARUTI SUZUKI : ............................................................................................................................... 32

HONDA CARS INDIA LIMITED: ........................................................................................................ 32

7. WHAT THE LEADERS SAY: ................................................................................................................. 33

MARUTI SUZUKI: ................................................................................................................................. 33

HONDA CARS INDIA LIMITED: ......................................................................................................... 35

8. REFERENCES: .......................................................................................................................................... 38

3 | P a g e

1 .OUTLOOK: AUTOMOBILE INDUSTRY IN INDIA India‘s Automobile Industry is seventh largest in the world with an average annual

production of 17.5 million vehicles of which 2.3 million are exported. The Indian Automobile

market can be divided into several major sectors like two-wheelers, three-wheelers, passenger

cars, commercial vehicles. The Indian passenger vehicle market is dominated by cars at 79%.

Auto industry of India has been recording tremendous growth over the years and accounts for

7% of our total GDP and employees19 million people directly or indirectly. Also it accounts

to 22% of country‘s manufacturing GDP.

a) Evolution of Automobile Industry in India:

b) Key players and products:

Indian automotive industry has over 35 players in various segments. Mahindra and

Tata motors are two major home grown players in passenger car segment and commercial

vehicles segment. While Mahindra has market leadership in the Utility segment, Tata has

dominance in the commercial vehicle segment. It also key products in passenger segment like

the Indica, Nano etc. Maruti Suzuki is the market leader in passenger car segment. Passenger

car segment is extremely competitive with lot of foreign players like the Korean Hyundai

motors, Japanese giants like Suzuki, Toyota, Honda, German powerhouses like VW, Skoda

and American majors like Ford, General motors. Two wheeler segment is dominated by

Bajaj, Hero motors, Honda motors, Yamaha. Even the luxury segment has significant players

like BMW, AUDI, Mercedes Benz, Porsche etc. Commercial segment has players like Tata,

Ashok Leyland, AMW, Daimler India.

4 | P a g e

While mergers and acquisitions have been a trend of the late, few major

acquisitions include Mahindra‘s take over of Ssangyong motors of Korea, Tata‘s takeover of

JLR. Renault tied up with Nissan to develop products specific to India in a synergy contract.

The following picture below shows a bird‘s eye view of various brands existing in passenger

and luxury car segment in India.

Some of the most iconic products include the Maruti 800, Tata Indica, Mahindra‘s

Scorpio, Ford‘s Figo, Maruti Swift in the passenger and utility segment. In two wheeler

industry, some key products include the famous Splendor from Hero, Pulsar from Bajaj.The

following are some of the key products that revolutionised the automotive industry in various

time periods.

The iconic “Maruti 800”

World’s cheapest car “Tata

Nano”

The Mighty Muscular

Mahindra “Scorpio”

Legendary “Splendor”

Revolutionary “Bajaj

Pulsar”

The “Ambassador”

5 | P a g e

(c)Government Initiatives:

The Government of India has allowed 100 per cent FDI in the automotive

industry through automatic route. Special focus is on exports of small cars, multi-utility

vehicles (MUVs), two and three-wheelers and auto components, the automotive sector's

contribution to the GDP is expected to double reaching a turnover worth US$ 145 billion in

2016, according to the AMP 2006-2016. The Union Budget 2014-15 had given some

incentives to the auto industry by extending the excise duty concessions beyond 30th June

2014 for a period of 6 months up to 31st December 2014.

For small cars, motorcycle, scooters -duty has been reduced from 12 to 8 per cent.

For commercial vehicles and SUVs -duty has been reduced from 30 to 24 per cent.

Duty has also been reduced from 27 per cent to 24 per cent for large-segment cars,

and from 24 per cent to 20 per cent for mid-segment cars

(d)Factors determining the growth of the industry:

Fuel economy and demand for greater fuel efficiency is a major factor that affects

consumer purchase decision that will bring leading companies across two-wheeler and

four-wheeler segment to focus on delivering performance-oriented products

Sturdy legal and banking infrastructure

Increased affordability, heightened demand in the small car segment and the surging

income of the Indian population

India is the third largest investor base in the world

The Government technology modernization fund is concentrating on establishing

India as an auto-manufacturing hub

Availability of inexpensive skilled workers

Industry is perusing to elevate sales by knocking on doors of women, youth, rural and

luxury segments

Market segmentation and product innovation

(e)Industry performance in FY 2014-2015:

Industry output in August 2014 inclined by 14.86% of what it was in August 2013.

Domestic sales growth for passenger vehicles in April-August, 2014 was 4.46% over

the same period last year.

Passenger Cars and Utility Vehicles grew by 5.24 percent and 9.46 percent

respectively in April-August 2014 over the same period last year

The overall Commercial Vehicles segment registered a de-growth of (-) 13.66 percent

in April-August 2014 as compared to same period last year

Two Wheelers sales registered growth of 14.79 percent in April-August 2014 over

April-August 2013

In April-August 2014, overall automobile exports grew by 21.30 percent over the

same period last year, wherein for passenger vehicles it grew by 0.17%

In April 2014 export of utility vehicles showed an improvement of 298 percent with

41,550 units.

6 | P a g e

2. Basics of STP of Passenger Cars in India: Passenger car segment is one of the largest car segments in India. Sale of

domestic passenger cars rose 15.16 percent in August, marking the fourth consecutive month

of growth after nearly two years of deceleration, industry data showed Tuesday10. The new

generation of young executives with handsome salaries has increased purchasing power in the

Indian domestic market. India is witnessing a boom in the passenger car segment with major

car makers making their foray in India.

Passenger Vehicles sales is expected to grow at 11% CAGR over FY 12-16.The

Micro segment is expected to grow at a CAGR of 13.8 percent; the Mini segment will keep

its pace due to the penetration in tier III cities and the rural segment and is likely to grow at a

CAGR of 6.7 percent over the next five years (FY'14 - FY'19). The Compact segment is

likely to grow at a CAGR of 4.0 percent over the next five years. This segment is likely to be

affected in the near future due to increasing preferences for compact Sports Utility Vehicles

and Super Compact segment vehicles. The Super Compact segment which is expected to see

few more new launches is likely to grow at a CAGR of 10.3 percent over next five years.

This segment is perceived to be value for money .With a maximum number of new launches

by almost all the OEMs in Utility Vehicles (UVs), this segment is likely to grow at a CAGR

of 20.2 percent over the next five years. The SUV is seen as a status symbol and feeds the

aspirations of the growing middle class and the affluent. Another factor is the availability of

financing options which has brought the expensive SUV into the affordable range for the

consumer. UVs also provide the required capacity to accommodate the large Indian joint

family.

Segmentation:

Geographic - Segmentation of consumers based on country, region, state, urban/rural

areas constitute geographic segmentation.

Region –Different regions can have different buying seasons for cars. People generally

prefer buying such products at any special or auspicious festival and such things vary

among different region while some seasons are lean. So marketers need to identify when

to market a product according to the region in which the consumer lies.

Rural/Urban – Some companies segment on the basis of urban/Semi-urban/Rural

consumers. Accordingly they will have to identify how and which product to market in

those segments.

Demographic – Segmentation of consumers on the basis of religion, age, gender,

purchasing power, community, language, family size, occupation, social status.

Age – The car manufacturers are segmenting the consumers on the basis of age. For

younger generation they are providing them more of thrill and style and for middle and

old age people they are providing more of safety and reliability.

Gender – Mostly cars don‘t segment on basis of gender but it can be taken up. For ex,

Honda Fit She‘s pretty-in-pink version of the maker‘s familiar subcompact offers a few

properties the maker believes will specifically appeal to women, such as a windshield

designed to block skin-wrinkling ultraviolet rays.

7 | P a g e

Purchasing capacity – Buyer‘s preferred range is often related to their purchasing

capacity. Budget, Compact, Family and Premium car segments are some of the

segments on this basis.

Psychographic – Segmentation of consumers according to their social class, lifestyle,

personality and buying psychology. People prefer buying cars out of their lifestyle

practices and psychographic segmentation helps in positioning/repositioning, launch of

products.

Behavioral segmentation - Markets can be segmented on the basis of buyer behavior.

Different customer groups expect different benefits from the same product and

accordingly, they will be different in their motives in owing it and their behavior in

buying it. Some behaviors are utilitarian, hedonic and low involvement purchases.

Benefit sought like fuel efficiency and technology, usage rate, usage status, loyalty to

brand, decision roles like test rides etc. can be the basis for such segmentation.

Category segmentation of cars used in our project

The idea behind our project is to analyse the key segments of various cars by

Honda and Maruti and we are segmenting them on the basis of prices of cars. The

reason pricing category is chosen as a basis is because that is the most important factor

affecting a consumer decision of buying a car. Also the categories are more

differentiated and there is no overlap hence making our analysis more clear. Below is

the category basis:

Car

Segment

Distinguishing feature of the cars in this

segment

Car models belonging

to the segment

A Entry level Cars priced from 1 lakh to 3 lakhs Alto, Spark, Nano, Eon

B1 Hatchbacks priced lower than Rs. 6 Lakh Santro, Indica, Beat

B2 Hatchback priced between Rs. 6 to 7.5 Lakh Ritz, i10, i20, Swift,

Figo

C1 Sedan models priced below Rs. 8 Lakh Indigo, Fiesta, Sunny

C2 Sedan models priced between Rs. 8 to 9.5 Lakh Verna, Manza, Linea

C3 Premium Sedan models priced below Rs. 15 Lakh Fluence, Corolla

D1 Luxury Sedan models priced below Rs. 25 Lakh Sonata, Camry, Kizashi

D2 Luxury Utility vehicles priced above 25 lakhs Vitara,CRV

Other

Utility

vehicles

Gross products and cross overs like off roading

vehicles, single box construiction vehicles and few

SUVs, MPVs

Omni, Mobilio, Eeco,

Innova

Again, there are lot of chances of overlap. The compact SUVs like Eco sport and Duster

are priced at a base of around 7 Lakhs. But for sake of convenience and based on research,

we have opted to keep the utility vehicles classified separately as the companies we have

chosen are predominantly into hatchbacks and sedans.

8 | P a g e

Targeting:

In targeting, some measures and ideas are developed for making the segment

attractive and also it involves deciding upon which segment should be targeted. The company

fully concentrates its marketing energies in reaping the benefits from target segment.

Sometimes through selective segmentation companies approach more than one segment. Also

through deep segmentation a deep differentiation can be created among the products in the

market. There are distinct group of car buyers with widely varying and clearly distinguishable

needs. Hence marketers target these kinds of buyers created sub-segments.

To decide upon the segmentation there are a few effective segmentation criteria:

1. Measurable – The size, purchasing power and characteristics of the segments can be

measured. For cars, purchasing power matters the most.

2. Substantial – The segment should be large and profitable enough to serve. Also when

a company rolls a new car model it invests heavily on its R&D and so target segment

should be large enough so that it can cover its cost.

3. Accessible – The segment should be effectively reached and served. Also for cars like

sedan which can be targeted for semi urban/rural consumers company should be able

to reach them.

4. Differentiable – The segment should respond differently to different marketing-mix

elements and programs. Different cars follow different marketing mixes so segments

should be differentiable for each mix.

5. Actionable – It should allow programs to be formulated for attracting and serving the

segments. Cars should attract buyers by programs like EMI option, 0 down payment,

etc.

So in identifying the target segment a need based market segment approach can be applied. It

is a seven step process.

1. Needs-based Segmentation – group customers into segments based on similar needs

and benefits sought by customers in solving a particular consumption problem.

2. Segment Identification – For each needs-based segment, determine which segment

factors (demographics, lifestyles, etc.) can come into play.

3. Segment Attractiveness – Using predetermined segment attractiveness criteria the

attractiveness of it can be determined.

4. Segment Profitability – Determine how profitable the segment is in terms of long

term revenue inflow.

5. Segment positioning – A value proposition can be created for positioning.

6. Segment “Acid Test” – Assess and test the attractiveness of each segment‘s

positioning strategy and identify if it is gaining audience for that.

7. Marketing-Mix strategy – 4P‘s analysis and expanding segment positioning strategy.

9 | P a g e

Positioning:

Positioning is placing the product in consumers‘ minds relative to

competitors product A good positioning has a ―foot in the present‖ and a ―foot in the future‖

such that any future launches of products with added features doesn‘t have to position itself

all over again. A focused value proposition is created successfully for the consumers.

Positioning requires the following things:

1. Determining a competitive frame of reference: It is to decide which brand to compete

with and focus on the competitive analysis for that. One needs to identify its competitors

both actual and potential. Also an analysis of competitor and its offerings should be done,

So in case of cars when there are so many small and large players in the market one needs

to carefully observe its competitors .

2. Identifying optimal points of difference and points of parity-POD refers to the added

benefits a consumer gets in the brand and they should be able to feel that they could not

find the same benefit with the competitor brand. POP focuses on the benefits of the

product which need not necessarily be unique to it. It can be required to negate

competitors perceived POD‘s and negate a perceived vulnerability of the brand as a result

of its own PODs. So when it comes to cars both POPs and PODs are important.

3. Choosing POPs and PODs – Marketers focuses on brand benefits in choosing the POPs

and PODs that make up their brand positioning. Such should be the case in passenger

vehicle segment also.

4. Brand Mantras – It is helpful to define a brand mantra. It is an articulation of the heart

and soul of the brand. These are short 3-5 word phrases which shows the spirit of the

brand. For eg, Fiat – Driven by passion, Tata motors – even more car per car.

5. Establishing brand positioning – After determining the strategy it should be

communicated to everyone in the organization so that they work for it together. It aims at

making the brand a superior choice of consumers. For eg, Tata motors shows the highest

level of employee involvement in working towards realizing the brand mantra.

Passenger cars in India can be positioned as city cars, which are comfortable to

drive, give high mileage, low operational cost and low price. The competition is growing in

this segment as more companies are entering to gain from the growth in the sector. So each

manufacturer should position it better than anyone else by upgradation, price benefits, new

technology, and better payment options like EMIs and down payments. Showing below a

table of how positioning is done for cars.

Brand and

company

Target

Customers

Benefits Value Proposition

(PODs)

Positioning

Santro Eco,

Hyndai

Environmentally

Conscious

Consumers who

want a small and

safe car

Better power and fuel

efficiency, less

maintenance cost,

Economical ,environment

friendly small car

Santro Eco –

An

environment

friendly car

Swift,

Maruti

Suzuki

Customer seeking

a powerful and

stylish car for city

driving

Powerful styling

and handling,

advanced

features

A vehicle that provides

comfort, power and luxury

in small package

Style, modern

looks and

young attitude

10 | P a g e

3. MARUTI SUZUKI INDIA LIMITED AT A GLANCE

Maruti Suzuki started out in 1982 in Gurgaon, Haryana with a Maruti Suzuki

factory. 1st lot of Maruti cars assembled in 1983 and Maruti Suzuki 800 hit the streets. They

had a commitment to create value through innovation, quality, creativity, partnerships,

openness and learning. They alone make 1.5 million Maruti Suzuki family cars every year.

That‘s one car every 12 seconds. They provide evolutionary cars that deliver great

performance, efficiency and environment friendliness with low cost of ownership. Maruti has

14 cars with over 150 variants ranging from Alto 800 to the Life Utility Vehicle Maruti

Suzuki Ertiga.

Journey: A brief look

1. 1983- First car launched

2. November, 1984 – First MUV in India, the iconic Omni

3. December, 1985 – First off loader Maruti Gypsy was launched

4. 1990 – India‘s first luxury Sedan, Maruti 1000 was launched.

5. 1993- Premium hatchback ZEN launched

6. 1994- Esteem launched in India giving Sedan a new look

7. May, 1996 - Launched India's first 24 hour- On-road service

8. 2000- The first car company in India, to start a customer care centre

9. 2002- Suzuki Motor Corporation acquired majority stake in MUL

10. 2005 - Ranked 7th in the world by Forbes magazine

11. 2007 - MarutiUdyog Limited is renamed Maruti Suzuki India Limited

12. 2012 - Ranked no.1 in customer satisfaction for an unprecedented 13th time in a row

(JD Power Customer Satisfaction Index Study conducted in 2012)

SWOT Analysis:

Strengths

1. Market leader, highest domestic sales

2. Largest dealer network and sales and services center

3. Strong Brand Value and Customer Loyalty

4. Good technology and varied range of cars.

Weakness

1. Image of being the brand selling the cheapest cars

2. Younger generation going towards foreign brands

3. Not doing well in SUV segment

Opportunities

1. R&D on electric cars can be done

2. New Dzire from Maruti expected to do well

3. Economic growth of the company is increasing

Threats

1. Newer players entering the market

2. Increasing fuel prices

3. Substitute public transport available

SWOT

11 | P a g e

Sales Volume Statistics:

The following charts below indicate the volume contribution of sales to Maruti year

on year and the market share in India as on August 2014. As seen from the recent data,

Maruti retains its leadership position with a whooping 46.84% of market share in passenger

car segment.

12 | P a g e

4. HONDA CARS INDIA LIMITED AT A GLANCE:

Honda Cars India Limited (HCIL) is a leading manufacturer of premium cars

in India. It was established in 1995 with a commitment to provide Honda‘s latest passenger

car models and technologies to the Indian customers. It is a subsidiary of Honda Motor Co.

Ltd., Japan. Its first manufacturing unit was set up at Greater Noida, U.P in 1997. Its product

range includes Honda Brio, Amaze, City, CR-V. Its models are strongly associated with

advanced design and technology apart from the established qualities of durability, reliability

and fuel-efficiency. The company goes by the mission statement of maintaining a global

viewpoint, dedicated to supplying products of the highest quality, yet at a reasonable price for

worldwide customer satisfaction. HCIL has a strong sales and distribution network spread

across the country. The network includes 187 authorized dealership facilities in 121 cities.

HCIL dealerships are based on the "3S Facility" format, offering complete range of Sales,

Service and Spares services to its customers.

Journey: A brief look

1. 1995 – HCIL was first launched in India

2. 1998 – Compact Sedan Honda City Launched in India

3. 2001 – Honda Accord launched

4. 2005- Business Standard Motoring Car of the Year 2004 - Honda City

5. 2006 - Best Indian Company (unlisted) by Business Standard Group

6. 2011- 5 door subcompact hatchback, Honda Brio Launched

7. August, 2012 - he company officially changed its name to Honda Cars India Ltd.

(HCIL) and became a 100% subsidiary of Honda

8. April, 2013 – Honda Amaze launched which is a 4-door subcompact sedan.

9. July, 2014 –7-seater mini MPV, Honda Mobilio launched.

SWOT Analysis:

Strengths

1. Excellent branding, advertising and after sales service

2. High brand Equity & Brand Loyalty

3. Refined production system and powerful R&D

4. High after sale services

Weakness

1. Cost structure is high compared to others

2. Caters to upper middle segment hence limited customer base.

3. Controversies over recalling of models several times

Opportunities

1. R&D on hybrid and fuel efficient cars

2. Fast growing automobile market

Threats

1. Newer players entering the market

2. Increasing fuel prices

3. Substitute public transport available

SWOT

13 | P a g e

5. SEGMENTATION, TARGETING AND POSITIONING BY COMPANIES

MARUTI SUZUKI INDIA : Maruti Suzuki has product offerings in almost all segments. Maruti has distinguished

itself from other competitiors in terms of superior customer satisfaction reliability,sevice

quality and accessibility, affordable and competitive pricing and intense distributuion

networks. Currently it has a market share of 47%. Maruti has consistenty maintained

leadership position in its Customer Service Index(CSI) by JD power for 14 years. This has

truly contributed to its market leadership.

14 | P a g e

Product mix:

The following table illustrates the various product offerings of Maruti Suzuki

India. For sake of direct comparison, Utility vehicles have been classified separately. As it

can be seen from the table, Maruti Suzuki has market leadership from entry segment to C3

segment.* All prices in the report are with reference to those sold in Delhi.*

SEGMENT PRODUCT BASE PRICE POSITION IN SEGMENT

(AS ON AUG 14)

A ALTO 800,K10 241137 1

B1 WAGON R,STING RAY 348514 1

CELERIO 376385 2

B2 RITZ 423124 4

SWIFT 443208 1

C1 SWIFT DZIRE 485162 1

C2 SX4 715138 BOTTOM

C3 CIAZ UPCOMING NA

UTILITY

OMNI 245531 3

EECO 366852 5

ERTIGA 580228 6

GYPSY 542187 10

GRAND VITARA 2268064

The following chart shows the sales figures as on August 2014. As it can be

seen from the chart below, Maruti Suzuki occupies the top 4 positions. Overall it has 8

products in the top 20.

15 | P a g e

(a) MARUTI ALTO 800:

SEGMENT - A

VARIANTS - Petrol CNG Fuel variants, Base to High – Lxi, Vxi

PRICING - 241137(Base petrol Lxi) to 352968 (Top eng CNG)

CHIEF RIVALS - Hyundai Santro, Tata Indica+Vista, Chevrolet Beat

CITY / HIGHWAY FUEL ECONOMY - 17.0 kmpl / 22.74 kmpl

ENGINE DISPLACEMENT - 796 cc

POWER - 47.3BHP@6000RPM

TORQUE - 69Nm@3500 RPM

“LETS GO” POSITIONING

TV COMMERCIAL

With the honour of being India‘s best selling car, Alto was launched in India in

September 27,2000. It was targeted at the younger generation during time of launch as the

legendary Maruti 800 occupied the leadership in the entry level segment. It had the ―Lets Go‖

campaign in 2010 where two couples on a date are shown driving the car where they develop

a sense of intimacy and trust with themselves and get closer. This was done to indicate that

people get closer with the product to develop a sense of trust and affection with the brand. In

2012, the product underwent a major change with new body and interiors. The powertrain

was retained. But the product was priced lower than the earlier variant. It also has a CNG

variant to appeal to cities like Mumbai, Delhi and offers a mileage of 30.46 KMPL.After the

production of Maruti 800 was stopped in January 2014, Maruti Alto 800 has become the

entry level offering of Maruti.

16 | P a g e

(b) MARUTI ALTO K10 :

SEGMENT - A

VARIANTS - Petrol, Base to High – Lxi, Vxi

PRICING - 318918 (Base petrol Lxi) to 3331678 (Top end)

CHIEF RIVALS - Hyundai Eon, Tata Nano, Chevrolet Spark

CITY / HIGHWAY FUEL ECONOMY - 17.0 kmpl / 20.92 kmpl

ENGINE DISPLACEMENT - 1.0-litre 67.1bhp 12V K Series Petrol Engine

POWER - 67.1bhp@6200rpm

TORQUE - 90Nm@3500rpm

“CHASE YOUR PASSION”

TV COMMERCIAL

With an interest to tap into the potential into the growing younger generation with

potential to buy, AltoK10 was launched in India in 2010 with a new Kappa engine. Maruti

Suzuki Alto K10 is all about Performance, Energy and Zippiness whose attributes where

derived from the new powertrain with better power and driveability. The advertisement

shows a pair of young musicians who take of their in their Alto K10 and get their recording

done. Though shown as being disappointed initially, the commercial shows that their drive in

K10 helps them get energized and follow their passion. Thus the car is shown to have an

emotional connect with younger generation who are driven by their passion to achieve. K10

has been a run away success since its launch with over 3,00,000 units sold in its first three

years.

17 | P a g e

(c) MARUTI WAGON R AND STING RAY:

SEGMENT - B1

VARIANTS - Petrol, CNG Base to High – Lxi, Vxi

PRICING - 348514 (Base Wagon R) to 455562 (Top end Stingray)

CHIEF RIVALS - Hyundai Eon, Tata Nano, Chevrolet Spark

CITY / HIGHWAY FUEL ECONOMY - 17.08 kmpl / 20.51 kmpl

ENGINE DISPLACEMENT - 1.0-litre 12V K Series Petrol Engine

POWER - 67.1bhp@6200rpm

TORQUE - 90Nm@3500rpm

“FOR THE SMARTER RACE”

“MY THING EVERYTHING”

Wagon R was the first product which had the tall boy design keeping in mind the

space and comfort requirements expected by Indian families. Though it was initially

positioned as India‘s first Multi Active Vehicle, later it was repositioned as ―For the smarter

people‖ in 2003. It was targeted at the middle and upper middle class families who were

looking for more space, comfort, reliability. Since then the product had been consistently

repositioned with respect to changing customer profiles. In 2013, Wagon R stingray was

launched as an upmarket version with the focus on enhanced styling, features etc.

18 | P a g e

(d) MARUTI CELERIO:

SEGMENT - B1

VARIANTS - Petrol, CNG Base to High – Lxi, Vxi

PRICING - 376385 (Base) to 443641 (Top end AMT version)

CHIEF RIVALS - Hyundai Eon, Tata Nano, Chevrolet Spark

CITY / HIGHWAY FUEL ECONOMY - 19.08 kmpl / 22 kmpl

ENGINE DISPLACEMENT - 1.0-litre 12V K10B Petrol Engine

POWER - 67.1bhp@6200rpm

TORQUE - 90Nm@3500rpm

“LIFE TAKES A LEAP”

“DRIVE EASY- DIL UCHHLING”

Maruti Suzuki went about taking a huge gamble with a product having the

Automatic transmission as its key differentiator in the conservative Indian market where the

automtatic system was perceived to have lot of issues and hence higher maintenance costs. It

convinced the potential buyers by highlighting the astronomical fuel efficiency values. The

target segment was people between 33-42 years and for the families which needed a second

car predominantly driven by housewives and others where ease of drive and operation was a

necessity. Its ad campaign also focused on these features. It shows a young couple in a

Celerio and another Celerio with four young executives waiting and then moving ahead in a

traffic signal with ease. The focus was on traffic conditions in India and how the Celerio can

help the customers overcome the same without losing out on the pleasure of driving

19 | P a g e

(e) MARUTI SWIFT:

SEGMENT - B2

VARIANTS - Petrol, Diesel Base to High – L to Z variants

PRICING - 376385 (Base) to 443641 (Top end Petrol)

CHIEF RIVALS - VW Polo, i10 Grand, Nissan Micra

CITY / HIGHWAY FUEL ECONOMY - 15.6 / 18.6 kmpl(Gas), 18.1/22.9 kmpl(Diesel)

ENGINE DISPLACEMENT - 1.2-litre 16V K Series Petrol Engine and 1.2L Diesel

POWER - 87 ps @ 6200 rpm(Petrol), 75 ps @ 4000 rpm(Diesel)

TORQUE - 110Nm@3500rpm(Petrol), 190 Nm @ 2000 rpm(Diesel)

“YOU’RE THE FUEL”

“THE NEW SWIFT-MORE SWIFT”

Launched in 2005, Swift has been a revolution in terms of its brand image and

fan following. It was a potential game changer for Maruti which targeted the higher income

younger generation which wanted a car that was peppy, stylish and a sense of ownership

pride. It took styling cues from the famous Hayabusa and was launched in 2005. It was an

instant hit. The commercials focused on young couples and friends performing various stunts

with perfect control and getting their adrenaline pumped up. The tagline ―You‘re the fuel‖

connected emotionally with the audience to go and experience the way the wanted to. It

crossed 1 million mark in sales in eight years. There have been frequent refreshes with the

latest offering focusing on more features. Despite the intense competition in the segment,

Swift has been the market leader in its segment owing to its pricing, brand image and

reliability.

20 | P a g e

(f)MARUTI RITZ:

SEGMENT - B2

VARIANTS - Petrol, Diesel Base to High – L to Z variants

PRICING - 376385 (Base) to 443641 (Top end Diesel)

CHIEF RIVALS - VW Polo, i10 Grand, Nissan Micra

CITY / HIGHWAY FUEL ECONOMY - 14.7 / 18.5 kmpl(Gas), 18.6/23.2 kmpl(Diesel)

ENGINE DISPLACEMENT - 1.2-litre 16V K Series Petrol Engine and 1.2L Diesel

POWER - 85.80hp@6000rpm (Petrol), 73.97hp@4000rpm (Diesel)

TORQUE - 114Nm@4000rpm (Petrol), 190 Nm @ 2000 rpm(Diesel)

“JOY INSIDE”

“HOW MANY MOMENTS HAVE YOU LIVED-

LIVE THE MOMENT”

Maruti launched the Ritz in May 2009 targeting the upper end of the hatchback

segment. The car was positioned to ―Live the moment‖ and it was all about romancing the

life. The commercial features number of moments a couple and others experience while

driving and made an emotional connect with the audience to live and experience life through

the Ritz. It also offered a fantastic mileage and it was a success reaching over 2 lakh unit

sales within 2 years of its launch.

21 | P a g e

(g)MARUTI SWIFT DZIRE:

SEGMENT - C1

VARIANTS - Petrol, Diesel Base to High – L to Z variants

PRICING - 485162(Base) to 651440 (Top end Diesel)

CHIEF RIVALS - Honda Amaze, Hyundai Xcent, Toyota Etios

CITY / HIGHWAY FUEL ECONOMY - 15.6 / 18.6 kmpl(Gas), 18.6/23.4 kmpl(Diesel)

ENGINE DISPLACEMENT - 1.2-litre Petrol Engine and 1.3L Diesel Engine

POWER - 87 ps @ 6200 rpm(Petrol), 74 ps @ 4000 rpm(Diesel)

TORQUE - 110Nm@3500rpm(Petrol), 190 Nm @ 2000 rpm(Diesel)

“LET YOUR DESIRE SHOW..”

TAXI – COMMERCIAL USE

Swift dzire was in March 2008. It was the first indeginiously developed product

for India by Suzuki. They vehicle was an extended version of Swift to make it more of a

Sedan but within 4m to benefit from the tax regulations in India. Also there was not much of

promotion in the first year and word of mouth campaign was the medium chosen. It was

backing up on the phenomenal success of Swift. Its value proposition targeting customers

who could afford and move on from a Premium hatchback but couldn‘t afford a sedan was

the key to its success. Infact the first commercial on air was an year after its launch. Swift

Dzire is also sold as a commercial segment vehicle as Taxis owing to its offering in Space,

Comfort, Fuel efficiency and reliability. Dzire has been consistently among the best sellers in

India and recently in July 2014 it was the best selling car in India.

22 | P a g e

(h)MARUTI SUZUKI SX4:

SEGMENT - C2

VARIANTS - Petrol, CNG, Diesel Fuel Variant, Base to High–Vxi, Zxi

PRICING - 7,15,137 (Base petrol Vxi) to 9,53,823 (Diesel Zdi)

CHIEF RIVALS - Hyundai Verna, Honda City, Vento

CITY / HIGHWAY FUEL ECONOMY - 21.7 kmpl(Diesel),16.5 kmpl(Petrol), 22.1 kmpl(CNG)

ENGINE DISPLACEMENT - 1586 cc (Petrol, CNG) ,1248cc (Diesel)

POWER - 104.7 PS @5600rpm (Petrol),90 PS @ 4000 rpm (Diesel)

TORQUE - 145Nm @4100rpm (Petrol),200 Nm @ 1750 rpm(Diesel)

“NOW THAT’S A MAN”

TV COMMERCIAL

SX4 was Maruti‘s offering in the sedan segment. It had the ―Now that‘s a Man‖

campaign in 2009 where it was shown that men are back with the launch of Maruti Suzuki‘s

SX4 . This was done to show that the car is as strong as the built of a man. The Ad

consistenly featured well dressed up men resembling corporate professionals to establish a

connect with the target group. It was targeted at high income men who are the primary

decision makers with respect to purchase of cars and in the self driven office goers segment.

In 2011, Maruti came up with the diesel version of the car.The car comes with unique safety

features to give you a powerful ride, mile after mile. It is definitely, for the boys who grew up

to be men. The CNG version was introduced in August 2010.

23 | P a g e

(i) ERTIGA:

SEGMENT - UTILITY

VARIANTS - Petrol, CNG, Diesel Fuel Variant, Base to High–Vxi, Zxi

PRICING - 580000(Base petrol Vxi) to 849000(Diesel Zdi)

CHIEF RIVALS - Innova, Honda Mobilio, TATA Sumo

CITY / HIGHWAY FUEL ECONOMY - 20.7 kmpl(Diesel),16.2 kmpl(Petrol), 22.3 kmpl(CNG)

ENGINE DISPLACEMENT - 1373 cc (Petrol, CNG),1248cc (Diesel)

POWER - 95 PS @6000rpm (Petrol), 90 PS @ 4000 rpm (Diesel)

TORQUE - 130Nm@4000rpm (Petrol), 200 Nm @1750 rpm (Diesel)

“A Feeling called LUV-Life Utility Vehicle”

Live life with LUV

Maruti Suzuki made a huge move by stepping into the MUV segment by

launching the much awaited Maruti Ertiga, a 7-seater MUV on 12th April 2012.Both the

petrol and diesel engines are the ones which has revolutionized the hatchback segment with

the most number of bookings in a single month. It had the ―A Feeling called LUV-Life

Utility Vehicle‖ campaign in 2012, where it showed that Ertiga is to enhance your lifestyle.

In June 2013, Maruti Suzuki added its Ertiga models with Compressed Natural Gas (CNG),

The Maruti Suzuki Ertiga comes integrated with a wide range of features that ensure the

safety of all occupants.

24 | P a g e

(j) MARUTI OMNI AND EECO:

“KAMYABI KHUSHIYON SE SAJAIYE..”

AMBULANCE SERVICE

HAPPINESS FAMILY SIZE!! EECO AS AMBULANCE

Launched in 1985, the Maruti Suzuki Omni pioneered a segment in Indian

automotive industry. It has different options with 4,5 and 8seater options catering to different

needs from family to ambulance. Owing to its reliability and dependability, it is hugely

adored by its customers and it is positioned as "Kamyabi Khushiyon Se Sajaiye".

Eeco was launched after replacing the Versa model of Maruti and it was

predominantly positioned as a family vehicle. The catch phrase of ―Happiness Family Size‖

was used to communicate the positioning as a typical family vehicle. Eeco is also used in

commercial segment as Ambulance.

25 | P a g e

(k) MARUTI GYPSY AND GRAND VITARA:

“TAKE ON THE CHALLENGES OF UNKNOWN UNCHARTERED TERRAIN..”

GRAND VITARA-PLAY IT YOUR WAY!!

Gypsy was launched as a utility vehicle primarily. Though not a market leader in

itself it is used in defence sector for select applications. Grand Vitara was a premium offering

in the luxury Sports Utility Vehicle segment. However owing to its higher price and

availability of better offerings like the Honda CRV, Pajero etc the vehicle was not a success.

26 | P a g e

HONDA CARS INDIA :

Honda Cars India Ltd. (HCIL) is a subsidiary of the Honda of Japan for the

production, marketing and export of passenger cars in India. Having inherited the legacy of

an automobile manufacturer that is known around the world for its cutting edge technology

and futuristic designs, Honda India has excelled in bringing the best tools and technologies in

the cars that it offers in the country's market. The company's total investment in its

production facilities in India as of 2010 was over INR16.2 billion. Honda has152 dealerships

across 98 cities in 20 states and 3 Union Territories of India. It sold 55,884 units during the

period between April 2009 and February 2010 as against 45,052 units during the same period

a year ago, recording an increase of over 24%.

Product mix:

The following table illustrates the various product offerings of Honda India. For sake

of direct comparison, Utility vehicles have been classified separately. As it can be seen from

the table, Honda has gained a lot market due to AMAZE and is place among the top segment

as compared to others.

SEGMENT PRODUCT BASE PRICE POSITION IN SEGMENT

(AS ON AUG 14)

B2 BRIO 410000 9

C1 AMAZE 541000 2

C2 CITY 726000 BOTTOM

D2 CRV 2025000 9

UTILITY MOBILO 649000 NA

From 2012,Honda started offering products at low cost and features that appeal to

Indian customers like space, comfort, reliability and low cost of ownership. The strategy has

worked in figure as Honda has managed to turn its fortunes . Currently Honda is the third

largest manufacturer of cars based on sales volume.

27 | P a g e

(a) HONDA BRIO :

SEGMENT - B2

VARIANTS - Petrol, Base to High – E MT, VX AT

PRICING - 410000(Base petrol E MT) to 600000 (VX AT)

CHIEF RIVALS - Toyota Etios Liva, Ford Figo, Maruti Suzuki Ritz

CITY / HIGHWAY FUEL ECONOMY - 16.5 kmpl / 19.4 kmpl

ENGINE DISPLACEMENT - 1198 cc

POWER - 88PS @ 6000rpm

TORQUE - 109Nm @ 4600rpm

“IT LOVES YOU BACK”

“LOVE MY BRIO”

The Honda Brio is a five-door subcompact hatchback produced by Honda in

India, Thailand and Indonesia. The car was introduced in 2011.The name Brio means

energetic and cheerful in Italian. The car is developed to position in a class below Honda

Amaze for emerging markets. It had the ―Loves you back‖ campaign in 2011 where it was

shown even if your girlfriend ditches you or stops loving you, but Honda Brio will love you

back unconditionally. This was done to indicate that people get closer with the product to

develop a sense of trust and affection with the brand.As Love is always about protecting your

loved ones,hence the Brio asserts its love for you with a range of enhanced safety features

when it comes to safety. Honda BRIO‘s 1.2L advanced i-VTEC (intelligent Variable Valve

Timing and Electronic Lift Control) engine delivers high power output at an impressive fuel

economy.

28 | P a g e

(b) HONDA AMAZE :

SEGMENT - C1

VARIANTS - Petrol and Diesel, Base to High – E, VXAT

PRICING - 541000(Base petrol E) to 820000 (VXAT)

CHIEF RIVALS - Maruti Suzuki Dzire, Hyundai Xcent

CITY / HIGHWAY FUEL ECONOMY - 16 kmpl / 19 kmpl (Petrol), 22 kmpl / 25 kmpl (Diesel)

ENGINE DISPLACEMENT - 1198 cc (Petrol)/ 1498cc (Diesel)

POWER - 88 PS @ 6000 rpm (Petrol)/ 100 PS @ 3600 rpm (Diesel)

TORQUE - 109 Nm@4500 rpm(Petrol)/200 Nm@1750 rpm (Diesel)

“ORDINARY IS OUT..AMAZING IS IN”

“HONDA AMAZE CHANGES YOUR

WORLD”

The Amaze is the sedan version of the Brio. Honda launched the Amaze in India on

April 11, 2013. The Amaze is available in petrol and diesel engine.The Amaze was a

significant step for the company in India as it will be its first diesel car in India.It had the

―honda amaze changes your world‖ campaign in 2013 where it was shown that honda amaze

gives you some much advanced features that it would change your life and you would find

reasones to drive it. This shows that Honda is looking to connect emotionally with the

consumers to create awareness. The diesel car have a 1.5L i-DTEC Engine. This 1.5 L

engineering marvel is the lightest engine in its category ,that enables greater reduction in the

overall weight of the vehicle, and a much lower burden on the engine.

29 | P a g e

(c) HONDA CITY:

SEGMENT - C2

VARIANTS - E, VX, SV (Petrol/Diesel)

PRICING - 410000(Base petrol E MT) to 600000 (VX AT)

CHIEF RIVALS - Maruti Ciaz, Hyundai Verna, VW Vento

CITY / HIGHWAY FUEL ECONOMY - 22.0 kmpl / 25.1 kmpl

ENGINE DISPLACEMENT - 1498cc(Diesel)

POWER - 98.6bhp@3600rpm

TORQUE - 200Nm@1750rpm

“THE GREATER DRIVE”

TV COMMERCIAL

The Honda City is a four-door sedan produced by Honda in India, Thailand and

Indonesia. The car was introduced in 1982 as a sub-compact car but later on went on through

a period of transitions and became a sedan. The car is positioned as an affordable car for the

emerging and rapidly growing upper middle class. The ad campaign primarily focussed on its

luxuriousness and its ability to remain attainable to those who work hard.―The greater drive‖

tries to unify the core concepts of industry and elegance, and focuses on those people who are

willing to work hard and do great good to your life. This philosophy of the ad resonates in

unison with aspirations and struggles of middle class and upper middle, and henceforth the

connection.

30 | P a g e

(d) HONDA CRV:

SEGMENT - D2

VARIANTS - 2WD, 2WD AT, 4WD AT

PRICING - Rs. 20,70,000 - Rs. 25,00,000

CHIEF RIVALS - Ford Escape, Hyundai Santa Fe, Nissan Rogue

CITY / HIGHWAY FUEL ECONOMY - 12 kmpl / 17 kmpl (Petrol)

ENGINE DISPLACEMENT - 2499 cc

POWER - 185 @ 7000

TORQUE - 163 @ 4400

“IMPOSSIBLE MADE POSSIBLE”

TV COMMERCIAL

The Honda CR-V is a compact SUV (now called crossover in North America),

manufactured since 1995 by Honda. It was loosely derived from the Honda Civic. There are

discrepancies as to what "CR-V" stands for. Honda sales literature in UK reportedly made

references to "Compact Recreational Vehicle" (Ref: Wikipedia). The ad primarily focusses

on the car‘s image of being impossible to craft. The company wants to project it as a work of

art and technical genius never seen before. The primary target audience would be the

corporate people who‘ve got high purchasing power. The product is positioned as a complete

product for the elite.

31 | P a g e

(e) HONDA MOBILIO:

SEGMENT - UTILITY

VARIANTS - Petrol,Diesel

PRICING - Rs. 6,49,000 - Rs. 11,54,996

CHIEF RIVALS - Maruti Ertiga, Toyota Innova, Mahindra XUV

CITY / HIGHWAY FUEL ECONOMY - 13.8/17.3(Petrol), 18.3/24 kmpl (Diesel)

ENGINE DISPLACEMENT - 1500c

POWER - 118bhp@6600rpm(Petrol),98.63bhp@3600rpm(Diesel)

TORQUE - 145Nm@4600rpm(Petrol),200Nm@1750rpm(Diesel)

“APNE LIYE..APNO KE LIYE”

“THAT’S MY RIDE”

The Mobilio is based on the same Brio platform. Mobilio is targeted at the growing

utility segment targeting families with over 5 people. The tag line ―Apne Liye..Apno Ke

Liye‖ is intended to convey the same message. The advertisement features a family of seven

people. They look at the car and sing a song, with a reason as to why the car is for them.

While everyone says some reasons like ‗bachatwali car‘ (money-saver car), wanting to

include it in every plan, the family head confesses at the end that he bought the car for

himself. The family of seven are seated comfortably inside and on ‗their ride‘. Thus it

establishes an emotional connect to appeal to large sized families especially joint families.

32 | P a g e

6. FUTURE PRODUCTS :

MARUTI SUZUKI :

Maruti is yet to make a mark in the sensational hot market of Compact SUVs. It

has lined up the SX4 cross to challenge the likes of Ford Ecosport, Renault Duster. It has also

planned to launch a sedan in premium segment called Ciaz to replace the Maruti SX4. Both

the products were unveiled in the Auto expo on Sep14,2014.

SX4 CROSS OVER CIAZ

HONDA CARS INDIA LIMITED:

Honda India has just launched the Mobilio and has lined up the modified Jazz to

make a splash in the competitive compact SUV segment. The earlier modelof Jazz was an

exciting offering with unique and attractive styling, comfortable and feature rich. But it was

affected by its poor pricing strategy. Honda withdrew the model owing to its losses. Now the

revitalised model of Jazz is set to make its comeback.

ALL NEW HONDA JAZZ

33 | P a g e

7. WHAT THE LEADERS SAY:

MARUTI SUZUKI:

1. “Maruti to retain focus on small cars for growth in India says MD & CEO, Kenichi

Ayukawa” – Economic Times, July 20,2013.

(a) Maruti Suzuki has maintained its leadership position despite increased global competition.

What's your role in shaping the Indian subsidiary?

As the industry leader we try to protect our position and take on the challenges thrown to us. The

Indian market is changing and getting highly competitive with virtually every global carmaker present

here. We have managed to maintain our leadership even as our global peers like Honda, Toyota or

Volkswagen have tried to increase their market share. We have the advantage of huge reach in both

sales and servicing.

(b) Maruti Suzuki has primarily been a petrol carmaker with exception of Fiat-licensed 1.3 litre

diesel engine. Do you plan to develop in-house diesel technology to tap the increasing demand

for diesel-powered cars?

We have a single diesel engine borrowed from Fiat that has proved to be a roaring success. Going

forward as we get into new segments and launch different vehicles, we would need diverse

technology for diesel and other alternate fuels. A huge capital investment is required for development

and production. There are some thoughts, but it would be difficult to commit by when we can

implement that.

(c)For the past three years, Maruti Suzuki has been trying but finding it tough to penetrate the

million-mark in domestic sales. How do you plan to stimulate sales?

It is right. Sales have not grown in the past few years. Our peak domestic sales were in 2010. We have

not been able to breach that even though we maintained our market share consistently around the 40%

mark. We would be working on new products, especially small cars, to grow our share in the Indian

market. Despite the current slowdown, we expect Indian market to touch 4-million mark by 2016 and

Maruti sales should go beyond 1.6 million in the same period.

(d) Labour troubles have also impacted Maruti Suzuki performance in the past. Any labour-

related strategy on your agenda?

It has been a sad case of miscommunication with our work force that led to such perennial problems

in the past two years. We are trying to improve communication with the workers as well as carry out

definitive changes in the Manesar plant. In the absence of a regular union, an interim representative

body of workers has been established to improve information flow and open new channels with the

workers. In case our workers want to switch to a regular union, the company would welcome and

support the move.

(e)Intermittent labour strife has caused frequent disruptions and production shutdowns. How

do you plan to take the profitability issues in the light of slowing market and increasing

competition?

My responsibility is to enhance the Indian business. There has been some improvement in the past

few months, but that got diluted by fluctuating currencies which are beyond my control. Going ahead,

we expect the Indian market to catch momentum and reach 4-5 million-sales mark, which would help

us to fully utilize our facilities and maximise scope of Indian operations. Also, the government needs

to pitch in with more measures for the industry to turn around faster.

34 | P a g e

2. “Maruti Kicks off Auto Expo with Two 'Futuristic' Launches: SX4 S-Cross, Ciaz” –

Forbes India, September 14, 2014

The Auto Expo 2014 kicked off on Wednesday with Maruti Suzuki—the country's largest

passenger carmaker—launching two futuristic models, the SX4 S-Cross, a crossover model

of the current SX4, and the sedan Ciaz.

―The SX4 S-Cross and Ciaz are models to expand our product range in future,‖ said Maruti

Suzuki India Managing Director and CEO Kenichi Ayukawa.

Parent firm Suzuki Motor Corp‘s executive vice-president T Suzuki said the two new cars

were aimed at meeting the growing demand of sedans in India, China and elsewhere. But

officials have declined to specify when the new cars would be available in showrooms.

The SX4 S-Cross offers various driving modes for better performance and safety and hopes

to compete with the Mahindra XUV. The Ciaz, which has a sporty look, is being introduced

to compete with Hyundai‘s Verna and Honda‘s City.

Maruti‘s Ayukawa was optimistic about the future despite slowing sales. ―The automobile

market in India is on a slowdown,‖ he said, but added that he was hopeful of matching the

annual sales of the last fiscal. Maruti clocked sales of around 10.6 lakh units in the domestic

market in the year ending March 2013.

Ayukawa further said: ―In the last 30 years, we have sold 12 million cars but still just touched

just one percent of the population. We have along way to go.‖

The much talked-about Maruti hatchback, the Celerio, was kept under wraps on the first day.

Maruti expects the Celerio to change the way Indians drive with a special automatic gearbox.

Based on promotional model, the Celerio is also expected to carry a Bluetooth-enabled audio

system, steering-mounted controls for audio, manual aircon, more rear leg room and dual

tone interiors and blinkers on door mirrors.

The Auto Expo comes at a time when carmakers are battling declining sales for several

months, as sluggish economic growth, higher fuel costs and interest rates have pushed

potential buyers to delay their purchases.

India‘s car sales fell almost 10 percent year-on-year in 2013, the first decline for 11 years,

according to data from the Society of Indian Automobile Manufacturers. Annual domestic car

sales, seen as a pointer to overall economic health, fell to 1,807,011 units in 2013 from

1,998,703 in 2012, according to SIAM.

But the Forbes India team believes that the mood at the Expo is of optimism. Most of the

companies are hopeful that the economy will start to turn around and the good times will roll

again soon.

35 | P a g e

HONDA CARS INDIA LIMITED:

1. Our counter-attack has started- President and CEO, Honda Cars India – The

Hindu,July8,2013

President and CEO of Honda Cars India Ltd. Hironori Kanayama has had a difficult year ever since

he took up his post. The car-maker has seen its market share nearly halve over the last five years after

a series of mis-steps, the most prominent being not having a diesel model. A year later, however, Mr.

Kanayama believes he is ―reaping the benefits that were sowed by his turnaround strategy.‖ With the

newly-launched Amaze sedan now counting for nearly 50 per cent of the company‘s sales in India, the

car-maker‘s counter-attack has just begun.

(a)How have the last 12 months been for both you and Honda Cars India?

It has been amazing for me. Since I reached India last April, difficulty has surrounded us — difficulty

like the depreciation of the rupee. As you can imagine, this has increased our import costs. Besides

this, we only had petrol models in the market. So, when petrol prices increased, it affected our

operations tremendously. Therefore, in the last few years, we have been focusing on the development

of diesel models, starting with the Amaze.To reduce the influence of the exchange rate fluctuation, we

had to accelerate localisation. In fact, in some models we have achieved around 90 per cent

localisation. Basically, in the last few years, we started sowing the seeds of development. What you

see now is us starting to reap some of those benefits.

(b)Is it Honda’s India strategy to lag slightly behind the curve, in terms of coming out with new

products such as a diesel model or a compact SUV, and watch how your competitors do first?

Our strategy, globally, is to bring out whatever model the customer would like to have. We don‘t

really adopt the ‗wait and watch‘ model that you are referring to. From an India stand point, it seems

like that we have taken such an action. This is more because of how different our company‘s history is

when compared with others.

Most of you compare Japanese manufacturers, mainly Suzuki and us. Honda mainly went into

advanced markets such as the U.S. and Europe, and in some of these markets, the ratio of diesel to

petrol cars is almost negligible. Therefore, we focussed only on petrol engine models, especially in

the last ten years. The global trend has also curved towards more eco-friendly technology. In fact, this

is where we are the best.

On the other hand, you take Suzuki. They focussed on the Indian customer market… they decided not

to compete with other Japanese manufacturers like us. They started operations 30 years ago, and

pulled off a great success. Therefore, it isn‘t surprising that Suzuki makes diesel models which are a

great hit here.The characteristics of the Indian market are unique. Nearly 50 per cent of cars sold are

diesel. Nearly 50 per cent is in the hatchback range, and so on. We are used to bigger engines and

petrol models. Now that we have started focusing on the Indian market, we will study all segments

that will be accepted by our customers. Our counter-attack has just started!

( c)How important is India for you in your global strategy?

Well, look at this way. Honda has sold about 4 million cars globally in the last fiscal, which ended

this March. Our President has announced that this will be increased up to 6 million in the fiscal year

ending March 2017. And, the increase comes from emerging markets, which include India. Therefore,

36 | P a g e

in that sense, the contribution of the Indian market to Honda‘s global strategy will be increased

tremendously.

(d)India is a growing country for now, but there is fast deceleration. Does this worry you?

History has proven that there is no market that grows permanently. Japan and China are classic

examples of this. The speed of growth has come down. But this does not mean the Chinese or

Japanese market has disappeared! While there may be some fine-tuning going on in India, I‘m sure it

will pick up.But yes, in the short-term, this is a slight concern. However, our management strategy

cannot be formulated based on a short-term view of the economy. We need huge investment to

succeed here. If we worry about the short-term view, we will never be able to invest here.

(e)Do you think the Indian market has attained a certain level of maturity?

I don‘t think you should say maturity. You should say progress. See, the number of cars on the road is

around 25 million or 26 million, including commercial vehicles. This is just 2 per cent against the

population. In Japan, it is around 75 million, and that too Japan has one-tenth of the population of

India.

Therefore, it is not about right or wrong, but more about the development stage. As the economy

grows here, the ratio will increase. More customers will be exposed to the ‗car experience‘. In due

course, the same will happen in China.In Japan, in the 1960s, people longed for owning a car. It is no

longer like that now! Buying a car has become like buying a bicycle in Japan! But here in Chennai,

here in India, this is different. Owning a car here is proof of social status. Therefore, we have to

respect such sensibilities. We want to inculcate the pride of owning a ‗Honda‘ car here…we don‘t

want to just provide customers with the convenience of mobility.

(f)But why can’t countries like India leapfrog to electric? You can’t have ten out of every

hundred people driving a car here. It would cause an environmental disaster.

The electric car, or EV, has many disadvantages and advantages. The first big thing is that it costs, it

costs big time. Second, you need charging stations. You get less mileage.

It is said that those cars need to replace their batteries every few years as well. These are simple facts.

Yes, it is true that people in Beijing are suffering from air pollution. They definitely want electric cars

— but they don‘t want to have to ‗pay‘ for it with all these disadvantages. Similarly, Indian people are

very fuel-efficiency conscious. The bottom line is whether it pays for them to drive an electric car.

Most importantly though, we should not mix the fact there are environmental problems and that

simultaneously there is potential for greater penetration of cars. We manufacturers cannot solve

environmental problems on our own. The government must do something as well. In Japan, for

instance, hybrid car sales are around 10-20 per cent. This is because the Japanese Government has

subsidised such eco-friendly cars!

We do need to reduce exhaust from the cars. At Honda, we are developing such technologies — the

fuel cell car, for instance. This type of car exhausts only water. But, of course, it costs a lot, and we

are struggling to reduce the cost. It is quite eco-friendly, it has no CO2 and no NOX at all.

The final problem is that in India, for EVs, how do you produce electricity? At the generation stage,

you produce a lot of CO2. All you are doing is shifting the place of pollution!

37 | P a g e

(g)In the industrial belts of Delhi and NCR, industrial relations are getting worse. Does this

worry you? What kind of strategies does Honda have in place?

Well… do you know that I once served in the Honda union? I was a full-time union officer for six

years. I think that the mental gap or the mental barrier between the management and the

associates/employees are the major cause of all labour disputes.

We, at Honda, have a philosophy that is called ‗respect for the individual‘. One of its meanings is

respecting the gender, educational background, and nationalities of all employees. Honda will give

equal opportunity to all people, regardless of any of those characteristics.I am trying to materialise

such a way of thinking here in India. For the last one year, I have direct communication with my

associates/employees. It is the little things that matter. For instance, in office, we all wear the same

white union uniform.

We all use the same canteen…half of the week. I even eat Indian food! During Diwali time, we all

celebrate together. I even once played guitar in the presence of all the employees and their families!

There is no reason that management and associates/employees should be enemies. It doesn‘t help us.

The common objective is the development of the company. At the end of the day, everybody wants

higher wages, job security, and the pride of working in a specific company. However, without

company development, none of this can be realised. Therefore, all of us are working towards the same

target.

Another major concern in the Indian market is the interest rates. How does this alter your strategy, as

most Indian car buyers are EMI-financed buyers.Well, of course, high interest rates are the major

cause of the recent de-growth in the car market. Therefore, we really hope that the economy will pick

up soon. But, as you may know, the market has de-grown by around 10 per cent. And, it has lost

growth for the last seven months. But for the last fiscal year, we grew nearly 35 per cent. This is at a

time when the market is de-growing. Therefore, even if the economy is sluggish, it does not mean that

the market has disappeared. It is just a matter of the speed of the growth.

Therefore, whatever the market is, what we have to do is provide the customers with the most

attractive models with best-in-class service.

(h)Why is Honda not actively looking at India as an export hub?

If India has more FTAs [with ASEAN countries], there is a possibility that we will export more cars.

However, that said, our forecast for the domestic market is not export. We believe in the potential of

the Indian market, and we want to commit to it.

Furthermore, Honda has many factories all over the world. It is only in Africa and the Middle-East

that we don‘t have. India is our closest factory to this. On the other hand, we have even exported cars

from Thailand. So, whenever there is room to export, we will. Our basic strategy, however, is

focusing on the domestic market. It is our philosophy that we want to prove ourselves in this market. I

don‘t want to say that India does not have export potential. It does have. But we first want to have a

stronger presence here… that will be our first mission.

38 | P a g e

REFERENCES:

1. http://www.prokerala.com/automobile/cars/

2. http://www.scribd.com/doc/19046599/Positioning-Small-Cars-India

3. http://www.currentweek.com/annual-passenger-car-production-in-india-analysis-report-

infographic/

4. http://www.ibef.org/industry/india-automobiles.aspx

5. http://118.67.250.203//Media/Release/SiamViewMediaRelease.aspx?id=369

6. http://www.business-standard.com/article/news-cd/indian-auto-market-top-five-gainers-of-

june-2014-114070500410_1.html

7. http://www.ibef.org/industry/autocomponents-india.aspx

8. http://simconblog.files.wordpress.com/2013/11/pic1.jpg

9. http://www.mbaskool.com/brandguide/automobiles/1299-maruti-suzuki.html

10. http://www.mbaskool.com/brandguide/automobiles/1197-honda-motors.html

11. http://www.marutisuzuki.com/

12. https://www.hondacarindia.com/

13. http://www.newindianexpress.com/business/news/Indias-Domestic-Passenger-Car-Sales-

Up-15.16-Percent/2014/09/10/article2424363.ece

14. http://www.frost.com/prod/servlet/press-release.pag?docid=290557104

15. http://www.team-bhp.com

16. http://www.cardekho.com

17. Http://www.autocarindia.com

18. http://www.siamindia.com

19. http://www.economictimes.com

20. http://www.thehindu.com

21. http://www.forbesindia.com

22. http://www.campaignindia.in