Maruti Udyog Limited

Chapter # 1Introduction of Motor Industry GLOBAL FOUR WHEELER INDUSTRY Evolution The automobile industry has undergone significant changes since Henry Ford first introduced the assembly line technique for the mass production of cars. Production concepts, processes and the associated technologies have changed dramatically since the first cars were built. Some 70 years ago, car assembly was primarily manual work. Today, the process of car a ssembly is almost fully automated. In the old days, firms attached importance to the production of virtually every part in a single plant, while today, carmakers concentrate on only a few specific production stages (i.e. car assembly). Parts and module production, services and related activities have been shifted to other, specialised firms (outsourcing of production steps).Since the 1980s, it has become clear that further productivity gains to retain competitiveness can be possible only by outsourcing and securing greater flexibility. For example, firms, especially small car producers whose markets have been threatened by imports, have diversified their production programmes (e.g. by building off -road cars or convertibles) thereby introducing greater flexibility in the production process. Also, firms and their production have become more internationalized in lieu of outsourcing. Current Scenario The global passenger car industry has been facing the problem of excess capacity for quite some time now. For the year 2002, the global capacity in the automotive industry was 75 million units a year, against production of only 56 million units (excess capacity estimated at 25%). Efforts to shore up capacity utilization have prompted severe price com petition, thus affecting margins and 1 forcing fundamental changes in the industry. The pressure on sales and margins is driving players to emerging markets in pursuit of better growth opportunities and/or access to low-cost manufacturing bases. ‡ The concept of selling in the passenger car industry is changing from original sales towards lifecycle value generation, encompassing financing, repairs & maintenance, cleaning, provision of accessories, and so on. ‡ Vehicle manufacturers are moving into completel y new materials and technologies²partly guided by environmental legislation ²in striving to come up with radically different products. Some of these new technologies involve parts that can be bolted on to an existing vehicle with relatively few implications for the rest of the vehicle. Others are much more fundamental, and are likely to have a profound impact throughout the supply chain. The examples include battery, electric or hybrid power trains, and alternatives to the all-steel body. Carmakers are increasingly outsourcing component production, and focusing on product design, brand management and consumer care, in contrast to the traditional emphasis on manufacturing and engineering. ‡ The increasing need to attain global scales underscores the importanc e of platform sharing among carmakers. All original equipment manufacturers (OEMs) are trying to reduce the number of vehicle platforms, but raise the number of models produced from each platform. This means producing a number of seemingly distinct models from a common platform. ‡ As in manufacturing, distribution in the automobile industry is undergoing significant changes, involving Internet use, retailer consolidation, and unbundling of services provided by retailers. 2 Indian Four Vehicular Industry Evolution The Indian automobile industry developed within the broader context of import substitution during the 1950s. The distinctive feature of the automobile industry in India was that in line with the overall policy of State intervention in the economy, vehicle production was closely regulated by an industrial licensing system till the early 1980s that controlled output, models and prices. The cars were built mostly by two companies, Premier Automobiles Limited and HM. However, the Indian market got tra nsformed after 1983 following the relaxation of the licensing policy and the entry of MUL into the car market. In 1991, car imports were insignificant, while component imports were equivalent to 20% of the domestic production, largely because of the contin uing import of parts by MUL. The liberalization of the Indian automotive industry that began in the early 1990s was directed at dismantling the system of controls over investment and production, rather than at promoting foreign trade. Multinational companies were allowed to invest in the assembly sector for the first time, and car production was no longer constrained by the licensing system. However, QRs on built-up vehicles remained and foreign assemblers were obliged to meet local content requirements even as export targets were agreed with the Government to maintain foreign exchange neutrality. The new policy regime and large potential demand led to inflows of foreign direct investment (FDI) by the mid-1990s. By the end of 1997, Daewoo, Ford India, GM, DaimlerChrysler and Peugeot had started assembly operations in India. They were followed by Honda, HMIL, and Mitsubishi. 3 348 10.2 19. 066 24.C mp tit Sales From Total Market Total number Share (in %) of exports in AprilApril 06-07 ovember 06-07 2.043 68.9 5.07.6 4.2 16.M j Key players Pl .348 24.105 31 9.374 12.512 31536 52.4 1.7 23.182 1.928 - M ti Suzuki Hyundi TATA Honda Ford Toyota and ot rs Market shares of major players i Indian passenger car segment 4 .91. com/india/automobile/overview/cars/sales/ 5 .Contribution to exports by major Indian players in passenger car segment http://www.naukrihub. Current scenario in Passenger Car Category The dominant basis of competition in the Indian passenger car industry has changed from price to price -value. the stranglehold of Economy models has been slackening. the higher-end MUVs. the market for MUVs has been redefined in India. reflecting the increasing sophistication of the Indian consumer. While the Indian market remains price sensitive. Currently. having successfully shaken off the tag of commercial vehicles attached to all MUVs till recently. especially in the passenger car segment. a dominant trend in the Indian passenger car segment is the increasing fragmentation of the market into sub -segments. Domestic car manufacturers are now venturing into areas such as car financing. With the launch of new models from FY2000 onwards. to complement their mainstay-business of selling new cars. occupy a niche in th e urban market. leasing and fleet management. 6 . commonly known as Sports Utility Vehicles (SUVs). and used-car reconditioning/sales. Additionally. giving way to higher-priced products that better meet customer needs. especially at the upper -end. New multinational players may enter the market. y Access to distribution network is important. Automotive players are rationalizing their vendor base to achieve consistency in quality. This is related to the quantum of investments made by the players in capacity creation and the selling price of the car. improved performance and after-sales support is critical. (compact and mid size segments).Co etitive Forces in Indian assenger Car Market Critical Issues and Future Trends The critical issue facing the Indian passenger car industry is the attainment of break-even volumes. 7 . y y Increased awareness among consumers has increased expectations. Threat from substitutes: Low to medium y With consumer preferences changing. Product differentiation via new features. Thus the ability to innovate is critical. Increased competitive intensity has limited the pricing power of manufacturers. y Financial strength assumes importance as high are required for building capacity and maintaining adequacy of working capital. y Lower tariffs in post WTO may expose Indian companies to threat of imports. The amount of investment in capacities by passenger car manufacturers in turn depends on the production . Threat from the new players: Increasing y Most of the major global players are present in the Indian market. inter product substitution is taking place (Mini cars are being replaced by compact or mid sized cars). y There is keen competition in select segments. Market strength of suppliers: Low y Rivalry within the industry: High y Market strength of consumers: Increasing y y A large number of automotive components suppliers. few more are expected to enter. Setting up integrated manufacturing facilities may require higher capital investments than establishing assembly facilities for semi knocked down kits or complete knocked down kits. In recent years. in terms of engine capacity. the Indian passenger car market is moving towards cars of higher capacity.These are strategies of the car manufacturers. and automotive exports are likely to gain increasing importance over the medium term. competition is likely to intensify in the SUV segment in India following the launch of new models at competitive prices. This apart. Although the Mini segment is expected to sustain volumes. the growth rates are likely to vary across segments. Additionally. it is still low for quite a few car manufacturers in India. However. growth in the medium term is expected to be led largely by the Compact and Mid -range segments. it is likely to continue losing market share. India is also likely to increasingly serve as the sourci ng base for global automotive companies. 8 . even though the rati o of sales to capacity (an important indicator of the ability to reach break -even volumes) of the domestic car manufacturers have improved. State ent of roble Comparative Study of Tata Motors and Maruti Suzuki 9 . y To find out whether the manufactured process f ollowed by the Maruti and Tata motors is running successfully or not. y To know whether is there is any problem which the customers are facing. y To know customers expectations. y To find out the manufactured cars are comfortable and flexible in driving or not. y To find out whether this products are gaining people¶s attention. 10 .Objectives of roble y To know the people thinking and their demands. y 70% of the people would be buying cars because of good facilities. y Majority of people would be buying the products through the advertisement which is given through different medium. y I think only 40%.Hy othesis y More than 60% of the respondents will be aware about the care facilities and their usage. of the people are interested in low budget cars which can suit their pockets. y Majority of respondents would like their cars as they are very famous in the market. y Majority believe that advertising attracts the customers. 11 . To evaluate the effectiveness of display of a product. c) How many decide to buy.Methodology The two methods which I followed while making this Report. are stated as below:1. where hidden cameras are used. In a departmental store. Service Stations-Pose as a customer. Questionnaire Method Elaboration:  Observation Method: The observation method involves human or mechanical observation of what people actually do or what events take place during a buying or consumption situation. ³Information is collected by observing process at work. 2. To determine typical sales arrangement and find out sales enthusiasm shown by various salesmen-Normally this is done by an investigator using a concealed tape -recorder. go to a service station and observe. 12 . 4. Super Market is the best location in the shelf. observer notes:a) How many pass by. b) How many stopped to look at the display.´ The following are a few situations:1. Observation Method 2. 3. are more easily discussed with questionnaires than they are observed.  Disadvantages of Observation Method: 1. customers/consumers state of mind. thus. motivations. 2. It also takes time for the investigator to wait for a particular action to take place. 13 .  Cost is the final disadvantage of observation method. If the researcher observes and record events. The biasing effect of interviewers is either eliminated or reduced. observational data are more expensive to obtain than other survey data. Data collected by observation are. Under most circumstances. The observer has to wait doing nothing. between even ts to be observed. their buying motives and their images. 2. Personal and intimate activities. 3. it is not necessary to rely on the willingness and ability of respondents to report accurately. The most limiting factor in the use of observation method is the inability to observe such things such as attitudes. Advantages of Observation Method:1. more objective and generally more accurate. such as watching television late at night. The unproductive time is an increased cost. then jobholders or supervisors may identify as related to the job. importance. Can get a large amount of information in a short time. called a task inventory. it to be completed by job -holders and approved by job-holder¶s superiors. frequency. are useful when a large number of jobs are to be covered. A questionnaire is a quick and efficient way to obtain information from a large number of employees. Each task or behavior should be described in terms of features such as difficulty. y Types of questionnaire method: - There are two types of questionnaires: A] Structured questionnaire B] Open-ended questionnaire The structured questionnaire uses a standardized list of work activities. 14 . time spent and relationship to performance.  Advantages of questionnaire method:      Quick and easy to administer. Allows for employee participation. Relatively less expensive. It must cover all job related to tasks and behavior. Does not require trained interviewer. The open-ended questionnaire asks the jobholder to describe the work in his or her own words. Questionnaire ethod: Questionnaire is a job analysis method.  Disadvantages of questionnaire method:        Quality of information related to the quality of the que stionnaire. May be difficult to construct. Must have high school reading and writing ability to complete one. Responses may be difficult to interpret (open-ended) 15 . Often needs follow-up interview or observation. Responses may be incomplete. May have low response rate. They are as follows: 25. we need to consider how many respondents are required per category. I have done my sample design in two different categories based on age of the peoples.45 50% 45 & Above 50% 16 .e. The proposed sample design includes multiple steps in order to reduce response bias. multi-stage sampling).Sampl D i For analysis purposes and in order to draw conclusions about di erent settings and di erent age groups wit in t ose settings. There are many sample designs from which researcher can choose.45 Age group  45 and above Age group Age groups= 100 25. This sampling design is carried in di erent stages and usually involves more than one sampling method (i. Sample design is determined before data are collected.  Facing the different peoples and knowing their views accordingly was quite Knowledgeable. The problems Faced were as follows:  It was difficult to conduct a survey on the basis of age of people. I felt this task was time consuming.Li itation Making this report possible was not at all an easy job.  It was a lengthy process of first making people to fill the questionnaire and then doing the work of tabulation which consume d a lot of time.  Convincing the people to fill the questionnaire was a difficult job.  Judging the individual behavior while filling the questionnaire was a tuff work. but time consuming procedure .  Due to busy schedules of some people. I came across following problems which made me lose hope but still following the formula of Ask questions. clarify facts and evaluate options to find a workable solution . 17 . with his elder son Sir Dorabji Tata and his cousin Ratanji Dadabhoy Tata. which opened in 1903. The plant started production in 1912. and chemicals. he set up the C entral India Spinning Weaving and Manufacturing Company Limited and thus marked the Group's entry into textiles. energy. materials. His younger son Sir Ratan Tata joined the firm in 1896. Tata Hydro-Electric Power Supply Company. the Indian Hotels Company was incorporated to set up the Taj Mahal Palace and Tower. The Tata Iron and Steel Company (now known as Tata Steel) was established to set up India's first iron and steel plant in Jamshedpur. and in 1945. Tata & Sons. the Tata Memorial in 1941. In 1887. Jamsetji Nusserwanji Tata laid the foundations of Tata Group when he started a private trading firm in 1868. the Tata Institute of Fundamental Research. consumer products. Today. In 1902. engineering.Cha ter # 2 INTRODUCTION OF THE COM ANY Tata Motors History Tata Group is one of India's largest and most respected business groups. Jamsetji Tata formed a partnership firm. The Group gave India her first steel plant. Tata Group's name is synonymous with India's industrialization. Its Trusts have instituted the Tata Institute of Social Sciences in 1936. India's first cancer hospital. hydro-electric plant. In 18 . In 1910. which became the cradle of India's Atomic energy program. In 1874. Tata Group comprises 96 operating companies in seven business sectors: information systems and communications. services. (now Tata Power) was set up. and its companies export products and services to 120 countries. The Group has operations in more than 54 countries across six continents. inorganic chemistry plant and created a reservoir of scientific and technological manpower for the country. India's first luxury hotel. Voltas. UK. was set up to manufacture watches. Tata Chemicals. Tata Tea acquired the Tetley Group. In 1996. This was the first major acquisition of an international brand by an Indian business group.1917. In 1945. engineering and manufacturing organization. In 1968. was established. Tata Consultancy Services (TCS). was established. Tata Engineering and Locomotive Company (renamed Tata Motors in 2003) was established to manufacture locomotive and engineering products. Tata McGraw-Hill Publishing Company was created to publish educational and technical books. In 1962. India's major marketing. Tata Finlay (now Tata Tea). In 1984. presently. Tata Indica. In 1970. India's first software services company. India's first indigenously designed and manufactured car. In 1939. In 1954. was established as a division of Tata Sons. was launched by Tata Motors. In 2000. Tatas entered aviation sector with the establishment of Tata Airlines. detergents and cooking oils. In 1932. Tata Teleservices (TTSL) was established to lead the Group's foray into the telecom sector. a joint venture between the Tata Group and the Tamil Nadu Industrial Development Corporation (TIDCO). one of the largest tea producers. the largest producer of soda ash in India. Titan Industries. In 1998. Tata Oil Mills Company was established to make soaps. 19 . was established. and a shareholder base of 3.8 per cent of this coming from business outside India. The major Tata companies are Tata Steel.Background Tata companies now operate in seven business sectors: communications and information technology. Tata Motors. Tata Chemicals. services. Every Tata company or enterprise operates independently. The Tata name has been respected in India for 140 years for its adherence to strong values and business ethics. They are. Tata Power. There are 28 publicly listed Tata enterprises and they have a combined market capitalization of some $60 billion. by and large. 334 crore) in 2008 -09. based in India and have significant international operations. Figure shows TATA Group firms TATA GROUP TATA Consultant Services TATA Communication TATA Steel Indian Hotels TATA Motors TATA Tea TATA Chemicals TATA Power 20 . with 64. Tata Tea.8 billion (around Rs325.5 million. Indian Hotels and Tata Communications. engineering. to whom it is answerable. energy. materials. and they employ around 363.039 people worldwide. The total revenue of Tata companies. Tata Consultancy Services (TCS). consumer products and chemicals. was $70. taken together. Each of these companies has its own board of directors and shareholders. Core Values o TATA Tata has always been values-driven. These values continue to direct the growth and business of Tata companies. The five core Tata values underpinning the way we do business are: y ³Integrity: We must conduct our business fairly, with honesty and transparency. Everything we do must stand the test of public scrutiny.´ y ³Understanding: We must be caring, show respect, compassion and humanity for our colleagues and customers around the world, and always work for the benefit of the communiti es we serve.´ y ³Excellence: We must constantly strive to achieve the highest possible standards in our day-to-day work and in the quality of the goods and services we provide´. y ³Unity: We must work cohesively with our colleagues across the group and with our customers and partners around the world, building strong relationships based on tolerance, understanding and mutual cooperation.´ y ³Responsibility: We must continue to be responsible, sensitive to the countries, communities and environments in which we wo rk, always ensuring that what comes from the people goes back to the people many times over.´ 21 TATA Chemicals Limited In the early 1920s, Kapil Ram Vakil, a chemical engineer educated in England, saw the possibility of developing salt works in the Okhamandal region, now in the state of Gujarat. He approached the then Maharaja of Baroda, Sayaji Rao Gaekwad. Always keen to develop his princely state, the Maharaja gave his assent. In 1927, Vakil set up the Okhamandal salt Works and V T Krishnamachari, the Diwan of Baroda, laid the foundation stone. A decade later, Vakil wanted to expand and set up a soda ash plant, but did not have the financial resources. He approached Gaekwad who wrote to the Tata's if they would be interested in assisting in a project of national importance. Tata Chemicals was born in 1939 and Vakil stayed on as its director. In those days the soda ash formula was a closely guarded secret between six companies in the world. It was, therefore, no easy task setting up such a proje ct. The British chemicals giant Imperial Chemical Industries (ICI), located in the Sindh province of what is now Pakistan, was the only company in the subcontinent with the necessary expertise and technology. When ICI was approached, they taunted Vakil, sa ying: "You put in salt and you get out salt." Darbari Seth, a young chemical engineer who had joined Tata Chemicals told the Board that they did not need foreign help. The management bought into the argument and Tata Chemicals cracked the code. Finally, in 1944, the 80 tonnes per day plant started production. In 1964, a capacity of 400 tonnes was achieved. To commemorate this feat the 'Four Hundred Tonnes Production¶ tower (FHTP) was erected in front of Mitha Mahal, the company guesthouse at Mithapur, where it still proudly stands. Tata Chemicals (TCL) is the second largest producer of soda ash in the world. It is India's market leader in the branded and iodized salt segment as well as in urea and phosphatic fertilizers. 22 VISION ³Enrich the quality of life by offering product and services that meet the essential needs of people.´ MISSION ³We shall be the most respected company in the business and geographies we operate in our growth and success will be achieved by: o Enhancing the value we deliver to our custom ers o Being globally competitive. o Internationalization shareholder value. o Improve shareholder value. o Commitment to corporate sustainability o Strengthening stakeholder relationship o Providing new and innovative offerings o Employees are our strength, and we will create an environment that fosters achievement learning and teamwork.´ 23 Tata Salt.SALTS Tata Chemicals is the market leader in packaged salts in India with more than half the total market consuming Tata brands.e. In Northern Region Company has launched 3 brands of salts i. New brands I-Shakti and Tata Salt Lite are also creating waves in the market. Tata Salt has won accolades as India's most trusted food brand for several years. IShakti and Tata Salt Lite SALTS AVAILABLE IN NORTHERN REGION TATA SALT I-SHAKTI TATA SALT LITE 24 .Products related to Internship. B. TATA SALT i. It is manufactured through a technologically advanced production process by evaporating sea brine in steam -heated vacuum evaporators. iv. It contains requisite amount of Iodine that ensures proper mental development of children and also prevents iodine deficiency disorders in adults. It provides an opportunity for the masses have access to a good quality iodised salt at an affordable price iii. i. 25 . iii. It sells an average of 40. Tata Salt is a vacuum evaporated iodized salt produced by Tata Chemicals. I-Shakti has been playing a significant role in mitigating the iodine deficiency of Indian consumers by providing them adequate iodine intake in every pinch of salt. I-Shakti is endorsed by the International Council for the Control of Iodine Deficiency Disorders (ICCIDD) for being the salt brand that offers adequate quantity of iodine. I-SHAKTI I-Shakti salt was launched to provide a platform for upgradation of users of loose salt and local branded salts. which may not provide a consistently dependable quality of iodized salt. iv.Characteristics of Salts A. Tata Salt today has a 43 per cent market share in the national branded salt segment. December 08). ii. v. ii.000 metric tons per month and is available for its consumers at over 12 lakh retail outlets (source: Nielsen Retail Audit. ii. It has been specially formulated to provide 15 per cent lower sodium than ordinary salt.C. Tata Salt Lite was launched to provide consumers who sought preventive measures to keep the blood pressure of family members under check. a convenient means of help in these stressful times. TATA SALT LITE Tata Salt Lite is low sodium salt from the Tata Salt brand franchise. This salt is for those who are highly healthy conscious and want a balanced life in case of health. i. iii. 26 . profit by company. Pricing Strategy There are various factors to determine a price of a car. A weather-proof camera is fixed to the rear car to help the driver while reversing the car. These factors are such as market condition (it can¶t be too low or too high with the prices of same vehicle from competitors. One of these innovations is the Tata Safari 4X4 Dicor that has ³Reverse Guide System´. 27 .Marketing strategies of Tata otors Marketing Strategies of Tata Motors that have allowed it to Take A Giant Leap in the Marketplace and How You can Benefit from These Marketing Strategies that They Have Used What makes the marketing strategy so successful? 1. it was introduced in 1996 and shortly the car has been used in the famous James Bond movie. 2. Product. Advertising is one of the most common ways to make car buyer or car enthusiast aware of the new car with special promotion price. Over the years Tata Motors have been successful in creating their brand image especially they use some famous stars as their spokesman. innovations. it has to be at par). Take BMW Z3 for example. This is similar to Nissan 350 Fairlady Z in the recent 2007 Fast and the Furious 3 ± Tokyo Drift. dealer profit. Tata Motors provide many innovative features to attract car lover. cost incurred to build a car. from no one knows it until everyone know it. and Advertising Every business started from 0. Branding. Other important marketing strategies are such as th e packaging. and quality control. Another more important way of advertising is to create an image or brand image. from the plant to dealership and to end user.Giving discount every month and special promotion for certain type of vehicle also one of the strong strategy use by Tata Motors. Maintenance and Support After sales service is also another important marketing strategy for most of the car buyer to choose for the right car. physical location. oil filter and some simple checking. Discount can be made from Company¶s profit or from dealer¶s profit at certain range. End user will not want to spend a lot of time to travel to a far place just to service the car such as change engine oil. The channel of distribution. and dealership method of distribution and sale s is generally adopted. 3. Place Place of dealership does play an important role. 4. Parts and accessories must also easy to access when it is needed to keep the customer satisfy from buying Tata cars until maintaining the car or even until they sell the car and change to a newer Tata mode 28 . The distribution of vehicle must be in a very systematic way. This is not only in India itself but also to the world-wide dealership. where a weather-proof camera is fixed to the rear end of the car to help the driver while reversing the car. Tata Motors have been successful in their own might in creating a brand image for itself. The company is the world's fourth largest truck manufacturer and second largest bus manufacturer in the world. The pricing policy of Tata Motors is always appreciated by the public. The marketing strategy of Tata Motors is one of the most successful marketing strategies used by a car maker in the car industry. 29 . cost incurred to build a car. Over the years. The car company lays emphasis on the Product Branding and Advertising. advertis ing also help to create a brand image. SUVs and many more since the company began in 1945.g. Tata Motors makes use of strategies such as discount and special promotions every now and then. Tata Motors is the leader in every commercial vehicle segment and it is the third largest passenger car maker. Tata Motors is being able to provide many innovative features to lure customers. innovations and quality control of a product. Tata Motors also stresses on the packaging. E. Tata Motors has felt its presence across India and abroad with its showrooms. the Tata Safari 4X4 Dicor with its "Reverse Guide System". profit by company and dealer profit.Tata Motor¶s Success Mantra Tata Motors is India's largest company in the commercial vehicle sector. In India. This attracts car lovers to opt for a Tata car. commercial vehicles. Advertising is the common way to make public aware of the new product. trucks. This is another marketing strategy of Tata Motors that boosts sales of vehicles.. The price of a car can be determined by factors such as market condition. Tata Motors is able to produce more than 4 million different types of vehicles such as cars. Besides. Tata Motors gives discounts based the company's profit or from dealer's profit at a certain range. banking. public sectors domains and other major fields apart from automobiles which has made Tata a Household name in India and abroad. Tata which is a huge conglomerate has branched its business into various segments like finance.The car company has established many servicing centers as well which stands as a back bone for the company to connect wit h the people. know the pulse of the people unlike many other car make rs. due to its presence in the commercial as well as the passenger vehicle segment. 30 . Tata Motors easy access to the general public has made the brand grow in size and stature. Tata. For example after the Daewoo acquisition the Indian company leaned work discipline and how to get the final product 'right first time. and the companies have an agreement to build a pick-up targeted at Central and South America. For example. the Fiat Palio Style was launched by Tata in 2007. Is the brand associated with commercial vehicles and low-cost passenger cars to the extent that it has isolated itself from lucrative segments in a more aspiring India? One weakness which is often not recognized is that in English the word 'tat' means rubbish. Not only is it focusing upon new products and acquisitions. Indian market. but it also has a programme of intensive management development in place in order to establish its leaders for tomorrow. Weaknesses y y y The company's passenger car products are based upon 3rd and 4th generation platforms. 31 . which put Tata Motors Limited at a disadvantage with competing car manufacturers.SWOT Analysis Strengths y y y The internationalisation strategy so far has been to keep local managers in new acquisitions. The benefit is that Tata has been able to exchange expertise. Despite buying the Jaguar and Land Rover brands (see opportunities below).' The company has a strategy in place for the next stage of its expansion. The company has had a successful alliance with Italian mass producer Fiat since 2006. Would the brand sensitive British consumer ever buy into such a brand? Maybe not. and to only transplant a couple of senior managers from India into the new market. Tat has not got a foothold in the luxury car segment in its domestic. but they would buy into Fiat. This has enhanced the product portfolio for Tata and Fiat in terms of production and knowledge exchange. Jaguar and Land Rover (see opportunities and strengths). Opportunities y y y y y In the summer of 2008 Tata Motor's announced that it had successfully purchased the Land Rover and Jaguar brands from Ford Motors for UK £2.3 million. Two of the World's luxury car brand have been added to its portfolio of brands, and will undoubtedly off the company the chance to market vehicles in the luxury segments. Tata Motors Limited acquired Daewoo Motor's Commercial vehicle business in 2004 for around USD $16 million. Nano is the cheapest car in the World - retailing at little more than a motorbike. Whilst the World is getting ready for greener alternatives to gas-guzzlers, is the Nano the answer in terms of concept or brand? Incidentally, the new Land Rover and Jaguar models will cost up to 85 times more than a standard Nano! The new global track platform is about to be launched from its Korean (previously Daewoo) plant. Again, at a time when the World is looking for environmentally friendly transport alternatives, is now the right time to move into this segment? The answer to this question (and t he one above) is that new and emerging industrial nations such as India, South Korea and China will have a thirst for low -cost passenger and commercial vehicles. These are the opportunities. However the company has put in place a very proactive Corporate Social Responsibility (CSR) committee to address potential strategies that will make is operations more sustainable. The range of Super Milo fuel efficient buses are powered by super efficient, eco-friendly engines. The bus has optional organic clutch with booster assist and better air intakes that will reduce fuel consumption by up to 10%. 32 Threats y y y y Other competing car manufacturers have been in the passenger car business for 40, 50 or more years. Therefore Tata Motors Limited has to catch up in terms of quality and lean production. Sustainability and environmentalism could mean extra costs for this low cost producer. This could impact its underpinning competitive advantage. Obviously, as Tata globalizes and buys into other brands this problem could be alleviated. Since the company has focused upon the commercial and small vehicle segments, it has left itself open to competition from overseas companies for the emerging Indian luxury segments. For example ICICI bank and DaimlerChrysler have invested in a new Pune-based plant which will build 5000 new Mercedes-Benz per annum. Other players developing luxury cars targeted at the Indian market include Ford, Honda and Toyota. In fact the entire Indian market has become a target for other global competitors including Maruti Udyog, General Motors, Ford and others. Rising prices in the global economy could pose a threat to Tata Motors Limited on a couple of fronts. The price of steel and aluminum is increasing putting pressure on the costs of production. Many of Tata's products run on Diesel fuel which is becoming expensive globally and within its traditional home market. 33 Cor orate Governance As part of the Tata group, the Company¶s philosophy on Corporate Governance is founded upon a rich legacy of fair, ethical and transparent governance practices, many of which were in place even before they were mandated by adopting highest standards of professionalism, honesty, integrity and ethical behaviour. As a global organisation the Corporate Governance pra ctices followed by the Company and its subsidiaries are compatible with international standards and best practices. Through the Governance mechanism in the Company, the Board alongwith its Committees undertake its fiduciary responsibilities to all its stakeholders by ensuring transparency fairplay and independence in its decision making. The Corporate Governance philosophy has been further strengthened with the implementation, a few years ago, by the Company of the Tata Business Excellence Model as a means to drive excellence, the Balanced Scorecard methodology for tracking progress on long term strategic objectives and the Tata Code of Conduct which articulates the values, ethics and business principles and serves as a guide to the Company, its directors and employees and an appropriate mechanism to report any concern pertaining to non adherence to the said Code and addressing the same is also in place. The Company is in full compliance with the requirements of Corporate Governance under Clause 49 of the Listing Agreement with the Indian Stock Exchanges (³the Listing Agreement´). The Company¶s Depository Programme is listed on the New York Stock Exchange and the Company also complies with US regulations as applicable to Foreign Private Issuers (non-US listed companies) which cast upon the Board of Directors and the Audit Committee, onerous responsibilities to improve the Company¶s operating efficiencies. Risk management and internal control functions have been geared up to meet the progressive governance standards. 34 CEO & Managing Director and the Chief Financial Officer (CFO) have 35 . All the Independent Directors have confirmed that they meet the 'independence' criteria as mentioned under Clause 49 of the Listing Agreement.THE BOARD OF DIRECTORS The Board of Directors alongwith its Committees provide leadership and guidance to the Company's management and directs.33%) are Non-Executive Directors. including the tenure and terms of remuneration are also approved by the members. None of the Directors of the Company is related to each other. The required information as enumerated in Annexure IA to Clause 49 of the Listing Agreement is made available to the Board of Directors for discussions and consideration at Board Meetings. None of the Directors on the Company's Board is a Member of more than ten Committees and Chairman of more than five Committees (Committees being. supervises and controls the performance of the Company. Mr Carl -Peter Forster was appointed as Tata Motors Group CEO & Managing Director of the Company w. Audit Committee and Investors' Grievance Committee) across all the companies in which he is a Director. April 1. are liable to retire by rotation.f. The Board currently comprises of twelve Directors out of which ten Directors (83. 2010. The Company has a Non -Executive Chairman and the six Independent Direct ors comprise of half of the total strength of the Board. All Non Executive Directors excluding the 'Steel' Director (Tata Steel representative). All the Directors have made necessary disclosures regarding Committee positions held by them in other companies and do not hold the office of Director in more than fifteen public companies. The Board reviews the declaration made by the Managing Directors regarding compliance with all applicable laws on a quarterly basis as also steps taken to remediate instances of non compliance. The appointment of the Managing Directors.e. October 1. 2010. The maximum time -gap between any two consecutive meetings did not exceed four months. July 27. November 27. number of directorships (including Tata Motors). 2009. 2009. May 29. February 26. October 26. 2010. 2010 and March 30. 2010. memberships/chairmanships of the Board and Committees of public companies and their shareholding as on March 31. 2010 in the Company are as follows: Sixty-fifth annual reports 2009-10 36 . attendance at Board Meetings held during the Financial Year under review and at the last Annual General Meeting. eleven Board Meetings were held on April 27. 2009. The composition of the Board. August 31. 2009.certified to the Board in accordance with Clause 49 V of the Listing Agreement pertaining to CEO and CFO certification for the Financial Year ended March 31. During the year under review. January 29. 2009. 2009. June 26. 2009. 2009. The relationship between the Board.e. All the Board members and senior management of the Company as on March 31. the Board of Directors appointed Mr Ranendra Sen as Non Executive Director w. The Board of Directors and the Committees also take decisions by the circular resolutions which are noted at the next meeting. A Declaration to this effect. the Board has constituted a set of Committees with specific te rms of reference/ scope. THE COMMITTEES OF THE BOARD To focus effectively on the issues and ensure expedient resolution of diverse matters. the Board has also adopted a Code of Conduct for Non-Executive Directors. The minutes of the meetings of all Committees of the Board are placed before the Board for discussions/ noting. 2010 have affirmed compliance with their respective Codes of Conduct.Code of Conduct May 27. the Committees and the senior management functions is illustrated alongside.f. 2010. Audit Committee Remuneration Committee Investor¶s Grievance Committee Other Committee 37 . June 1. The Committees operate as empowered agents of the Board as per their Charter/ terms of reference. duly signed by the CEO and Managing Director is annexed hereto. both of which are available on the Company¶s web site. 2010 Whilst the Tata Code of Conduct is applicable to all Whole -time Directors and employees of the Company. Targets set by them as agreed with the management are reviewed periodically and mid -course corrections are also carried out. Commercial passenger Carriers And Defence Vehicles Passenger cars Utility Vehicles Trucks Commercial Passenger Carriers Indica vista Safari Dicor Tata Novas Buses Indigo XL Nano Fiat cars Sumo Grande Sumo Xenon XT TL 4×4 Winger Magic 2.Marketing Mix 1. Wherever you are. and dealership method of distribution and sales is generally adopted. physical location. Tata always have something for the lower class people with Nano being their trump card. Trucks. 38 . Product: Tata has a very wide range of products it has passenger cars. Price: The prices of Tata motors are generally affordable acceptable by the general public at large. Place: Tata Motors has an extensive dealer ne twork covering Indian and International markets. The channel of distribution. The distribution of vehicle must be in a very systematic way. utility vehicles. Giving discount every month and special promotion for certain type of vehicle also one of the strong strategy use by Tata Motors. from the plant to dealership and to end user. there is a Tata Motors Sales and Service dealership close to you. This is not only in India itself but also to the world wide dealership. Discount can be made from Company¶s profit or from dealer¶s profit at certain range. 3. Processes: Tata motors follow Balanced Scorecard Collaborative. 6. Tata Nano and the company has already received 203. Physical Evidence: The management of the company has managed to keep their hopes alive even in this recession and hopes that the worse is behind Tata Motors recently launched the most awaited car of the year. People : Tata Motors owe our success to the highly motivated and talented staff.4.000 booking that are fully paid and 70 percent of the applicants are ready to wait till the end of 2010 for the car to be manufactured. 7. management and engineering institutes in India. Our recruitment division picks the crème-de-la-crème from premier universities. Inc for achieving excellence in overall Company performance. they put them through rigorous training programmes to hone their entrepreneurial skills and impart comprehensive product knowledge. Promotion: Tata motors promote their products via Advetising and after sales services 5. 39 . the co any gets a variety of roducts. T he Telco Grihini Electronics Sahakari Audyogic Sanstha Maryadit assembles a variety of flashers. grinders. situated in the tree -shaded residential section of the Tata Motors complex in Pune. And then there is the Poornima Chapati Society. The Telco Grihini Shivankala Sahakari Audyogic Santha Maryadit (a tailoring cooperative) makes gloves. and snacks. The Telco Grihini Cable Harness Sahakari Audyogic Sanstha Mariyadit manufactures a variety of cables.Contribution to Society The coo eratives s awned by Tata Motors rovide extra inco e to e their fa ilies. dry masalas. etc. on e of Tata Motors' four grihini udyogs. huge mixing vessels. registers to pickles. comprising 90 women who turn out 50. tool bags. are all being vigorously scrubbed amid much chatter and laughter. 20 women are busy in the weekly cleaning of the premises of the Telco Grihini Vividh Karyakari Sahakari Audyogic Sanstha Maryadit (loosely translated as the Telco housewives' multipurpose industrial cooperative society limited). chutneys. the floors and walls. timers and other electronics products. from stationary items such as office files.000 chapatis a day for the huge Tata Motors canteen. This one makes a variety of articles. fro loyees and cables for its vehicles to cha attis for its canteen Saris tucked in and their hair neatly bound up. part of a unique company-employee initiative. 40 . switches and instrument panel connectors. In return. uniforms. There is an infectiously happy atmosphere in this women's cooperative. Ovens. horns. diaries. horns. Downstairs. All the women are shareholders in their respective cooperatives. that might otherwise have been idle. the rest deftly solder the small components that go into making the 12 and 24 -V flashers. has been harnessed and made productive. there is an air of quiet concentration as 25 or so women sit in long rows on either side of a table. multifunction kits. At the Vividh Karyakari. Most of the products are sold to Tata Motors. condiments and bags ² are also sold in the open market. so that the women do not have to commute long distances to work. jointly owned and run by the women dependents of Tata Motors employees. Around Diwali. we stage plays and hold blood donation drives. Most of them have some degree of education. Each shift is just four hours long and women choose the timing most convenient to them.000 a month. which are run by elected office bearers." says an enthusiastic Ms Kanitkar. Malati Kanitkar explains that an annual general meeting is held each year to elect an 11-member managing commit tee. busy working with soldering irons.The women are paid the government -prescribed minimum wage and they also get all statutory benefits. 41 . indicators. "We had an essay competition on Women's Day. and manage to find work suitable to their skills in one or the other cooperative. Each cooperative is an independent entity. after household chores are attended to.Chinchwad. In this way a large pool of womanpower. We have cooking competitions and art exhibitions. though some ² like the pickles. This is one of three centres run by the electronics cooperative. The ladies in blue overalls are the trainees. which has 292 member s. The cooperative makes about Rs 80. HRD manager Jyoti Gokhale says that the cooperatives allow their women employees to work in their spare time. this can go up to a lakh and more. Operations are spread out over several centers in Pune and the neighboring industrial city of Pimpri. Profits are divided among the shareholders and every outfit is run with 42 . who is in charge of the centre. they have become independent units. schoolbags. earning members of their families. It looks complicated but Manda Purohi t. selling their products in the open market as well. To work here. The 551 members of the society operate from 10 centres. Initially Tata Motors supplied the raw material and bought the finished products. This society has 526 shareholders who work in 11 centres. Members can also collect the material from the centres and work at home. They can get financial aid to buy their own sewing machines. women have to undergo a two -week training course. In another small room. Now 1.200 confident women across the twin cities of Pune and Pimpri-Chinchwad have become selfsufficient. gloves. Who would have thought that some of the cables used in Tata vehicles are made by housewives? At the cable harness cooperative women work expertly on stran ds of colourful wires and thick cables. They themselves manage the affairs of their cooperative societies and are always looking out for new ideas and areas to expand into. reading from an industrial drawing and testing the cables to ensure they meet specifications. canvas tool bags.timers and relays used in Tata vehicles. piles of uniforms. and members of the tailoring cooperative are working on their sewing machines. But. The merchandise is supplied to Tata Motors and is also sold to other buyers. kitchen aprons and gloves are stacked. To think that it all began in 1973 with just six housewives. says it doesn't take much time for the women to learn the process. The cooperative initiative began after Tata Motors employees were encouraged to come together as shareholders and form industrial cooperatives which could employ their family members. as the cooperatives have grown and prospered. Running these cooperatives hones the managerial skills of the employees who administer them. formed by wives of Tata Motors employees. has 30 members. Steel fabrication and furniture are new areas the society has tapped." explains A. which are bought back by the Tata Motors foundry. The Comptel Society provides the other cooperatives with computerised services. " All the societies come under various senior Tata Motors managers. after the initial years. who help and guide us. and make suggestions. It recycles scrap wood into packing crates and furniture. Computers can be seen everywhere. The Vanita Consumers' Cooperative. employs 185 people and has a turnover of Rs 215 lakh. "But we administer the society ourselves and. employs 18 people and has a turnover of Rs 45 lakh. Its profit for 2003-04 was Rs 4. while the Trimurthy Society delivers housekeeping and conservancy services. employs 42 workers and has a turnover of Rs 84 lakh. we have asked for no financial help. It handles the battery cable assembly requirements of Tata Motors." There are four other societies: the Saptashringi Society has 21 members. the society's working chairman. The Chaitanya Society.professional competence. In 2003-04.38 lakh. 43 . Dhumal. it now has 60 shareholders.02 lakh. B. which does the fett ling of various castings from the foundry.into bales of uniform quality mild steel. started in 1981. it had a turnover of Rs 461 lakh and made a net profit of Rs 8. sells a variety of consumer durables at reasonable prices. has 43 shareholders and 250 employees. The Shreekripa Society. The Sahajeevan Society compresses mild steel scraps ² generated in the course of production ². Started in 1981. Division Of roducts y Tata Indica y Tata Indigo SW y Tata Indigo y Tata Magic y Indica Safari Dicor y Tata Safari y Tata Sumo Grande 44 . South Africa. is likely to gain access to Fiat¶s diesel technology and to the latter¶s strong overseas distribution network for its passenger cars. The launch of the global truck will mark the entry of the company into developed markets like Europe and the USA. Southeast Asia. but later Tata Motors decided to work with Iveco as Daewoo¶s design was not in sync with the needs of sophisticated European customers. in which Tata Motors will hold a 70% stake. Europe. Tata Motors plans to launch the new pick-up in India.Case Study TATA Motors Joint Venture with FIAT Tata Motors. The company also plans to expand its global footprint with the launch of µGlobal Truck¶ and µGlobal Pick -up¶ in domestic and international markets by 2007 -08. Turkey and Saudi Arabia. The JV product is likely to be a part of Tata Motors¶ µGlobal pick-up¶ plans. The JV will set up a plant with capacity to manufacture pick -ups a year and will sell them in Thailand. and in other regional markets. The project was initia lly a collaboration between Tata Motors and its subsidiary Tata Daewoo Commercial Vehicles.( Exhibit-1) an independent auto assembler. 45 . The company has formed a JV with Thailand¶s Thonburi. the second largest pick-up market in the world. through its JV with Fiat. Tata Motors is looking to extend this relationship to other segments like pick-ups and MHCVs. Effect of govern ent olicy on Tata otors Effect of Government Policy on TATA Motors CV Division Commercial Vehicles segment sector has been at the forefront of the strong showing by the automotive industry over the past few years. Following factors have led to growth in sales: · The cut in excise duty that enabled manufacturers like TATA Motors to reduce prices · The attractive financing offers and freebies enabled by low interest rate policies by Government · · The need to transport higher volumes of agricultural and industrial goods Low interest rates 46 . luxury car Baleno. premium small car Zen. indeed its impact on the lifestyle and psyche of an entire generation of Indian middle class. Versa. The company has a portfolio of 11 brands. completely designed and styled in-house. with a capability to produce about half a million vehicles. Zen and Esteem. decades.Cha ter # 3 Introduction of Maruti Udyog Li ited Maruti Udyog Limited. The company has also ranked highest in India Sales Satisfac tion Study. lease and fleet management service 47 .50. is widely acknowledged. The company's service businesses including sale and purchase of pre-owned cars (True Value). Its manufacturing plant. Power Asia Pacific 2005 India Customer Satisfaction Index (CSI) Study. off-roader Gypsy. mid size Esteem. has an installed capacity of 3. global auditors for International Organization for Standardization.D. the MPV. international brands Alto and WagonR. Swift and Luxury SUV Grand Vitara XL7. Maruti has made major strides towards its goal of becoming Suzuki Motor Corporation's R and D hub for Asia. Maruti supports safe driving and traffic management through mass media messages and a state-of-the art driving training and research institute that it manages for the Delhi Government.Omni.In recent years. The company's quality systems and\practices have been rated as a "benchmark for the automotive industry world-wide" by A V Belgium. In keeping with its leadership position.000 units per annum. Maruti's contribution as the engine of growth of the Indian auto industry. including Maruti 800 . located some 25 km south of New Delhi in Gurgaon. It has introduced upgraded versions of WagonR. a subsidiary of Suzuki Motor Corporation has been the leader of the Indian car market for about two of Japan. Itsemotional connect with the customer continues Maruti tops customer satisfaction again for sixth year in a row according to the J. In our paper we are attempting to identify the future of Maruthi Udyog Ltd which is currently the market leader. Maruti Insurance and Maruti Finance are now fully operational. The main questions we will be addressing are.. one of the fast growing Indian auto manufacturer. based on the Suzuki Alto kei car which at the time was the only modern car available in India. its' only competitors. Maruti Udyog Limited (MUL) was established in February 1981. Maruti Suzuki India Limited is a publicly listed automaker in India. It was the fir st company in India to massproduce and sell more than a million cars. The company's headquarters remain in Gurgaon. It is the market leader in India. near Delhi. Suzuki Motor Corporation of Japan holds a majority stake in the company. Maruti Udyog was renamed to Maruti Suzuki India Limited. On 17 September 2007.for corporate (N2N).the Hindustan Ambassador and Premier Padmini were at that point of time. It is a leading four -wheeler automobile manufacturer in South Asia. the first brand that comes to Indian customer mind is Maruti.. besides providing total mobility When it comes to Indian auto industry. though the actual production commenced in 1983 with the Maruti 800. ‡ ‡ ‡ ‡ ‡ Can it sustain its market share? Will there be a decline in profits What can it do to keep its growth rate? How can it compete in the highly competitive small car segment? What are its strategic alternatives? We will analyze the competitors briefly concentrating more on TATA motors. These initiatives. 48 . It is largely credited for having brought in an automobile revolution to India. Govt. ownership has changed hands and the customer has evolved.28% of the company was owned by the Indian government. with Suzuki as a minor partner to make a people's car for middle class India. The Indian government held an initial public offering of 25% of the company in June 2003. Govt. and 54. then and now. 18.Until recently. of India no longer has stake in Maruti Udyog. Over the years. is Maruti¶s mission to motorise India. 49 . the product range has widened. As of May 10. 2007. With this. of India sold its complete share to Indian financial institutions. Maruti Suzuki was born as a government company.2% by Suzuki of Japan. What remains unchanged. brand management and consumer care. thus affecting margins and forcing fundamental changes in the industry. the global capacity in the automotive industry was 75 million units a year. 50 . and are likely to have a profound impact throughout the supply chain. repairs & maintenance. ‡ The concept of selling in the passenger car industry is changing from original sales towards lifecycle value generation. encompassing financing. in contrast to the traditional emphasis on manufacturing and engineering. against production of only 56 million units (excess capacity estimated at 25%). All original equipment manufacturers (OEMs) are trying to reduce the number of vehicle platforms. electric or hybrid power trains. Carmakers are increasingly outsourcing component production. cleaning. For the year 2002. and so on. provision of accessories. The examples include battery. Some of these new technologies involve parts that can be bolted on to an existing vehicle with relatively few implications for the rest of the vehicle.Current Scenario The global passenger car industry has been facing the problem of excess capacity for quite some time now. and focusing on product design. This means producing a number of seemingly distinct models from a common platform. but raise the number of models produced from each platform. The pressure on sales and margins is driving players to emerging markets in pursuit of better growth opportunities and/or access to low-cost manufacturing bases. ‡ The increasing need to attain global scales underscores the importance of platform sharing among carmakers. ‡ Vehicle manufacturers are moving into completely new materials and technologies²partly guided by environmental legislation ²in striving to come up with radically different products. Others are much more fundamental. Efforts to shore up capacity utilization have prompte d severe price competition. and altern atives to the all-steel body. distribution in the automobile industry is undergoing significant changes. and unbundling of services provided by retailers.‡ As in manufacturing. involving Internet use. 51 . retailer consolidation. Large number of Indian managers.67 mn in 1984 to Rs.Background The Evolution Maruti¶s history of evolution can be examined in four phases: two phases during pre-liberalization period (1983-86. 17 mn without any tax obligation.54 mn in 1998 but started declining during 1997 -2001. Batches of Japanese personnel came over to Maruti to train. 52 . 1986-1992) and two phases during postliberalization period (1992-97. During the pre-liberalization period (1983-1992) a major source of Maruti¶s strength was the wholehearted willingness of the Government of India to subscribe to Suzuki¶s technology and the principles and practi ces of Japanese management. 607 mn and profit of Rs. 6854. 1997-2002). From such a modest start the company in just about a decade (beginning of second phase in 1992) had turned its elf into an automobile giant capturing about 80% of the market share in India. followed by the full privatization of Maruti in June 2003 with the launch of an initial public offering (IPO). supervise and manage. Employees grew to 2000 (end of first phase 1986). During the initial years Maruti had 883 employees. The first phase started when Maruti rolled out its first car in December 1983. The profit after tax increased from Rs 18. Maruti¶s style of management was essentially to follow Japanese management practices. 3900 (end of second phase 1992) and 5700 in 1999. a capital of Rs. supervisors and workers were regularly sent to the Suzuki plants in Japan for training. Employees reported early in shifts so that there were no time loss in-between shifts. ethics and human beings. (c) Constant efforts to increase the productivity of labor and capital . (e) Customer orientation.rotation.The Path to Success for Maruti was as follows: (a) Teamwork and recognition that each employee¶s future growth and prosperity is totally dependent on the company¶s growth and prosperity . 53 . There were laid -down norms. (f) Long-term objectives and policies with the confidence to realize the goals . The plant had an open office system and practiced on -the-job training. (b) Strict work discipline for individuals and the organization . The ³path to success´ translated into practices that Maruti¶s culture approximated from the Japanese management practices. Employees were handsomely rewarded with increasing bonus as Maruti produced more and sold more in a seller¶s market commanding an almost monopoly situation. team work and job. These practices were unheard of in other Indian organizations but they worked well in Maruti. All the employees ate in the same canteen.liberalization period the focus was solely on production. Maruti adopted the norm of wearing a uniform of the same color and quality of the fabric for all its employees thus giving an identity. (d) Steady improvements in quality and reduction in costs . (g) Respect of law. principles and procedures for group decision making. Attendance approximated around 94-95%. They commuted in the same buses without any discrimination in seating arrangements. quality circles. During the pre. Near-total transparency was introduced in the decision making process. kaizen activities. Ford. bring down number of vendors and introduce competitive bidding. Athreya. Dr. The redesign process saw Maruti complete a Rs. reduce production costs by achieving 85-90% indigenization for new models. GM. Toyota. Maruti. Maruti executed a plan to launch new models for different segments of the market. Mitsubishi. In its redes ign plan. have been consulted on modes of strategy and organization development during the redesign pro cess.70. business focus was to ³sell what we produce´.000 vehicles per annum. With increasing competition from local players like Telco. Together with the redesign plan. Consultancy firms such as AT Kearney & McKinsey. At the same time the Indian government permitted foreign car producers to invest in the automobile sector and hold majority stakes. Maruti initiated strategic responses to cope with India¶s liberalization process and began to redesign itself to face competition in the Indian market. The earlier focus of the whole organiz ation was "production. production and production" but now the focus has shifted to 54 . together with an internationally reputed OD consultant. the whole auto industry structure in India has changed in the last seven years and resulted in the declining profits and market share for Maruti. Mahindra & Mahindra and fo reign players like Daewoo. launches a new model every year. Hindustan Motors. 4000 mn expansion project which increased the total production capacity to over 3.Key Strategic Initiatives by Maruti A) TURNAROUND STRATEGIES MARUTI FOLLOWED Maruti was the undisputed leader in the automobile utility-car segment sector. PAL. there has been a shift in business focus of Maruti. In the wake of its diminishing profits and loss of market share. When Maruti commanded the largest market share. revamp marketing by increasing the dealer network from 150 to 300 and focus on bulk institutional sales. controlling about 84% of the market till 1998. This would save foreign currency and also stabilize prices that fluctuate with exchange rates. it followed a high volume production of about 400. increase productivity. change in the mindset was not as fast as required by the market. Maruti had wasted two crucial years (1996-1998) due to governmental interventions and negotiation with Suzuki of Japan about the break -up of the share holding pattern of the company.000 vehicles / year. Focus on customer care has become a key element for Maruti."marketing and customer focus". Cost reduction is being achieved by reaching an indigenization level of 85 -90 percent for all the models. Sato of Suzuki became the Chairman in June 1998.J. Maruti faced a 55 . However. This can be observed from the changes in mission statement of the organization: 1984: "Fuel efficient vehicle with latest technology". Mr. the market structure changed drastically. Cost reduction and increasing operating efficiency were another redesign variable. MPFI). and the new Mr. Post 1999. Institutional sales. 1997: "Creating customer delight and shareholders wealth". 1987: "Leader in domestic market and be among global players in the overseas market". Just before this change. quality and upgrade its technology (Euro I&II. Increasing Maruti service stations with the scope of one Maruti service station every 25 km on a highway. concentrated on marketing and institutional sales. Khatter was a believer in consensus decision making and participative style of management. which currently contributes to 7-8% of Maruti¶s total sales. There was a change in leadership. Maruti launched new car models. Khatter was appointed as the new Joint MD. To increase its market share. In addition. Maruti planned to reduce costs.As a result of the internal turmoil and the changes in the external environment. which entailed a smooth relationship between the workers and the managers. The organizational learning of Maruti was moderately successful.8% market share and 40% rise in profit for the FY2002-2003. reducing profits. and increase in inventory le vels. which it had not faced in the last 18 years. Maruti bounced back to competition with 50. the cost was relatively inexpensive as Maruti had its strong Japanese practices to fall back upon. rationalization of cost and enhanced productivity. After their fall in market share they redesigned their strategies and through their parent company Suzuki they learned a lot. With the program of organizational redesign.depleting market share. 56 . ( erstwhile-Ashok Leyland Finance). Their sole motive of having so many product offering is to be in the consideration set of every passenger car customer in India. Maruti has tied up with 8 finance companies to form a consortium. This consortium comprises Citicorp Maruti. It has a car priced at Rs. Maruti Insurance and Maruti Finance. Sundaram Finance. Maruti Finance: In a market where more than 80% of cars are financed. ICICI Bank. Maruti has tied up with Natio nal Insurance Company.00 which is the lowest offer on road. Maruti has brought all car insurance needs under one roof. Kotak Mahindra.1. OFFERING ONE STOP SHOP TO CUSTOMERS OR CREATING DIFFERENT REVENUE STREAMS Maruti has successfully developed different revenue streams without making huge investments in the form of MDS. Their pricing strategy is to provide an option to every customer looking for up gradation in his car. These help them in making the customer experience hassle free and helps building customer satisfaction.B) CURRENT STRATEGIES FOLLOWED BY MUL I. Maruti Insurance : Insurance being a major concern of car owners. This has been found to be a major driver in converting a Maruti car sale in certain cases. N2N. Maruti gets 70% business from repeat buyers who earlier had owned a Maruti car. Maruti Countrywide.87. II. New India Assurance and Royal Sundaram to bring this service for its customers. Maruti has strategically entered into this and has successfully created a revenue stream for Maruti. From identifying the most suitable car 57 .000. Finance is one of the major decision drivers in car purchase. HDFC Bank. Bank of Punjab and IndusInd Bank Ltd.PRICING STRATEGY CATERING TO ALL SEGMENTS Maruti caters to all segment and has a product offering at all price points. Bajaj Allianz. True Value ± Initiative to capture used car market Another significant development is MUL's entry into the used car market in 2001. by paying the difference.This helps them retain the customer. Services include end -to-end backups/solutions across the vehicle¶s life: Leasing. allowing customers to bring their vehicle to a 'Maruti True Value' outlet and exchange it for a new car. The used car market has a huge potential in India. Maruti knows its strength in Indian market and has filled this gap of providing trust in Indian used car market. N2N: Car maintenance is a time-consuming process.coverage to virtually hassle-free claim assistance it's your dealer who takes care of everything. Convenience services and Remarketing. recondition them. Maruti Insurance is a hassle-free way for customers to have their cars repaired and claims processed at any Maruti dealer workshop in India. give them a fresh warranty. Maruti Driving School (MDS): Maruti has establ ished this with the goal to capture the market where there is inhibition in buying cars due to inability to drive the car. Maintenance. and sell them again. The used car market in developed markets was 2-3 times as large as the new car market. They are offered loyalty discounts in return. With Maruti True Value customer has a trusted name to entrust in a highly unorganized market and where cheating is rampant and the biggest concern in biggest driver of sale is trust. This brings that customer to Maruti showroom and Maruti ends up creating a customer. Maruti¶s N2N Fleet Management Solutions for companies. All investments for True Value are made by dealers. 58 . takes care of the A-Z of automobile problems. Maruti has build up a strong network of 172 showrooms across the nation. Maruti has created a system where dealers pick up used cars. especially if you own a fleet. 46 lacs. They decreased the engine power from 1600cc to 1300cc and modified it again considering consumers perception. Here are the certain changes observed in diff erent models of Maruti. This made it a big failure on launch.4 lacs. A variant with LPG is receiving a very good response from customers who look for low cost of running. In 2003 they launched a lower variant as Baleno LXi at 5. Wagon-R was perceived as dull boxy car when it was launched. This was to reduce the price and attract customers. Omni has been given a major facelift in terms of interiors and exteriors two months back. which has been positioned as a vehicle for transporting cargo and meant for small traders. That was limited period offer to boost short term sales. They had come up with a limited period variant called Zen Classic. 59 . It has received a very good response from market.III. Other changes have been made from time to time based on market responses or consumer feedbacks or the competitor moves. This was a result of intensive survey done all across the nation regarding the consumer perception of Versa. Zen has been modified four times till date.3 lacs. A new variant called Omni Cargo.2 lacs. Versa prices have been slashed and right now the lowest variant starts at 3. Then further modifications in engine to increase performance and a facelift in the form of sporty looking grills on the roof. In 2002 they slashed prices to 6. A new look last year has helped b oost up the waning sales of Esteem. Baleno was launched in 1999 at 7. Esteem has gone through three facelifts. Now it¶s of the most successful models in Maruti stable. REPOSITIONING OF MARUTI PRODUCTS Whenever a brand has grown old or its sales start dipping Maruti makes some facelifts in the models. Maruti has proper customer complain handling cell under the CRM department. The Maruti call center is another effort which brings Maruti closer to its customer.sector laid back attitude image and has inculcated the customer -friendly approach in its organization culture. Maruti is investing a lot of money and effort in building customer loyalty programmes. Their Market Research department remains on its toes to study the changing consumer behaviour and market needs. is trained on greeting etiquettes. The Dealer Sales Executive. There are instances of cancellation of dealerships based on customer feedback. head light.Maruti 800 has so far been facelifted two times. CUSTOMER CENTRIC APPROACH Maruti¶s customer centricity is very much exemplified by the five times consecutive wins at J D Power CSI Awards. The customer centric attitude is imbibed in its employees. Once it came with MPFi technology and other time it came up with changes in front grill. Maruti has taken a number of initiatives to serve customer well. Focus on customer satisfaction is what Maruti lives with. rear lights and with round curves all around. Maruti has successfully shed off the public .Maruti enjoys seventy percent repeat buyers which further bolsters their claim of being customer friendly. IV. They have eve n changed their showroom layout so that customer has to walk minimum in the showroom and there are norms for service times and delivery of vehicles. Maruti dealers and employees are answerable to even a single customer complain. 60 . who is the first interaction medium with the Maruti customer when the customer walks in Maruti showroom. we will charge a little extra in the EMI and offer free maintenance.000 for monthly maintenance.000. That. to be the engine of growth in the future. While researching they found that rural people had strange notions about a car .000 and Rs 5. Rs. if you want it that way. As far as the maintenance cost is concerned. Maruti partnerships with State Bank of India and its Associate Banks took organized finance to small towns to enable people to buy Maruti cars.V. But.000 for fuel (would be the cost of using the car). plus another Rs 1. COMMITTED TO MOTORIZING INDIA Maruti is committed to motorizing India. maintenance need not be. 2599 scheme was one of the outcomes of this effort. Maruti expects the compact cars. which currently constitute around 80% of the market. To counter that apprehension. Control over the fuel bill is in the consumer's hands. The low penetration levels at 7 per thousand and ri sing income levels will augur well for the auto industry.500-2. Robust economic growth. Maruti is right now working towards making things simple for Indian consumers to upgrade from two -wheelers to the car. Maruti is busy fine-tuning another innovation. favorable regulatory framework.that the EMI (equated monthly instalments) would range between Rs 4. Towards this end." 61 . the company is working on a novel idea. another Rs 1. affordable finance and improvements in infrastructure favor growth of the passenger vehicles segment. Says Khattar: "What the company is doing now is saying how much you spend on fuel is in your hands anyway. At its meeting the company's board approved a total investment of Rs3. The above signifies when GOI was a major stakeholder in the MUL strategies which lead to investment have had a bureaucracy fact or in it but after the disinvestment strategy followed is a TOP DOWN approach with a fast implementation. making it the biggest privatization in India till date.9 crore for these two ventures. complete control of MUL means a lot.off deal is proof of its success. of course. DISINVESTMENT AND IPO OF MARUTI UDYOG LIMITED It was a long and tough journey. Quoting from the report that appeared in The Economic Ti mes. Now looking at the strategy point of it ± for Suzuki.424 crore. which will be located in Haryana. Maruti is its most pr ofitable and the largest car company outside Japan. MUL. managing director. The Indian car giant Maruti Udyog Limited has finalized its two mega investment plans ² a new car plant and an engine and transmission manufacturing plant. 62 . After the disinvestment Suzuki became the decision maker at MUL. The response to changing market conditions and technological needs will be faster. They flowed fund in India for the major revamp in MUL. but a rewarding one at the end. A reward worth Rs 2.271. the sale represents a staggering return of 35 times The best part of the deal is the Rs 1. Both the projects will be implemented by two different companies. The size of Maruti¶s sell. when Maruti Udyog Limited (MUL) was formally set up. 4th April 2005. On the investment of Rs 66 crore it made in 1982. Suzuki will now be in the driver¶s seat and will not have to mind the whims and fancies of ministers and bureaucrats. ³Decisions will now become quicker.VI.´ says Jagdish Khattar.000 crore control premiu m the Government has been able to extract from Suzuki Motor Corporation for relinquishing its hold over India¶s largest car company. Another third went into fuel. It revolves around the total life time value of a car. Says R. In this scheme.Suzuki's proposed two-wheeler facility in India.000 units a year. Says Kalsi: "So the question was. you know where the company's revenues come from. traveled across the world. As the Indian market matured. REALISATION OF IMPORTANCE OF VEHICLE MAINTENANCE SERVICES MARKET In the old days. general manager (new business). say. customers began to change cars faster. one third of that is spent on its purchase. And the final third went into maintenance. Disinvestment had helped by removing the red tape and bureaucracy factor from its strategic decision making process.S. MUL was just making and selling cars. Earlier. The new scheme is more complicated. The disinvestment followed by IPO gives the insight in the fact that now all the strategic decisions are taken by Maruti Suzuki Corporation. trying to capture more of the total lifetime value of a car. how can I make sure that it comes back to me each time it changes hands ? So Maruti has changed gears to take a big share of this final one-third spent on maintenance. Maruti was getting only the first one-third of the overall stream. VII. a life span of 10 years. Maintenance market has a huge 63 . Components came from the 'vendors' to the 'factory' where they were assembled and then sent out to the 'dealers'. in which Maruti has 51 per cent stake. wondering about new revenue streams. would start making motorcycles and scooters by the end of 2005 through a joint venture. if a car is going to see three users in. Work on this began in 1999. MUL: "While car companies were moving from products to services." If a buyer spends Rs 100 on a car during its entire life. when a MUL team. Kalsi. The two -wheeler unit will have a capacity of 250. the company's operations could be boiled down to a simple three-box flowchart. VIII. Every regional office is having a separate services and maintenance department which look after the growth of this revenue stream. The company has set itself (and its vendors) the target of a 50% improvement in productivity and a 30% reduction in costs in three years. PLAYING ON COST LEADERSHIP Maruti is the price dictator in Indian automobile industry. It¶s the low cost provider of car.market potential. Even after having fifty lakh vehicles o n road Maruti is only catering to approximately 20000 vehicles through its service stations everyday. Maruti also made strides in applying IT to manufacturing. The ability to keep lowering the prices sets Maruti apart from other players in the league. assuring them that for every drop in price. Maruti consolidated its vendor base.e. Based upon such activities. The lowest car on road is from Maruti stable i. Maruti also increased focus on vendor management. The impressive sales and profits were the result of major efforts within the company. product competi tiveness in the market will further increase. Maruti spread the overheads over a larger base. Maruti has increased its authorized service stations to 1567 across 1036 cities. Maruti is now encouraging its vendors to develop R&D capability for specialized components. For this they are conducting free service workshops to encourage consumers to come to their service stations. Maruti 800. A new Vehicle Tracking System improved efficiency on the shop floor and enhanced quality 64 . Maruti achieves this through continuous improvements in operational efficiency and productivity. Maruti does that by working with vendors. This has provided its vendors with higher volumes and higher efficiencies. volumes will go up. MARUTI PLANS FOR A BIG DIESEL FORAY The new car manufacturing company. The new car manufacturing plant will begin commercial production by the end of 2006. Pe rhaps being the flagship product phasing out of Maruti 800 faced lots of resistance from dealers all over.00 more margins to dealer on the sale of Wagon-R as compared to Zen. called Maruti Suzuki Automobiles India Limited.control. smoothened Maruti¶s Just In Time operations. II. PHASING OUT ZEN IN 2007 The launch of Swift and phasing out Zen is a strategic move. 2005 in the price band starting from 4 lacs. Another reason behind not phasing out Maruti 800 was the fear of brand shift of customers to other competitor¶s product.2 crore plant will have a capacity to roll out 1 lakh cars per year with a capacity to scale up to 2.524. This is to let dealer push Wagon R instead of Zen. The Rs1. 3000. Alto was launched keeping in mind that it will take over Maruti 800 market in future. will be a joint venture between Maruti Udyog and Suzuki Motor Corporation holding a 70 per cent and 3 0 per cent stake respectively. The major reason behind this decision was cannibalization of Wagon R and Swift due to overlapping of price band.5 lakh units per annum. Before launch of Swift Maruti management had decided that they will phase out Zen since it had already came up with two modifications. C) MAJOR FUTURE STRATEGIES I. Swift was launched in May. It is a rational decision to kill a product before it starts facing the decline stage in product cycle. 65 . Maruti is offering Rs. The e Nagare system. adopted from Suzuki Motor Corpor ation. INDIA AS EXPORT HUB FOR MARUTI Three years back as an experiment.000 petrol engines and 1.7 crore. based on the increasing design capabilities of suppliers in countries like India.4 lakh transmission assemblies. IV. The ultimate total plant capacity would be three lakh diesel engines. It will manufacture new generation CRDI (common rail direct injection) engines in collaboration with Fiat-GM Opel and engines will be of 1200 cc. While the annual growth in the diesel segment was 13 per cent in the last three years. However. Maruti has currently an insignificant presence in diesel vehicle. making them more competitive in the Indian market. Mexico and South Africa -. III. Investment in this facility will be Rs. McKinsey did an exercise to figure out just how much money could be saved if automobiles were to be made in overseas locations like India. 20. The commercial production will start by the end of 2006. Peugeot of France.Maruti would set up a diesel engine plant at Gurgaon in line with its plan to become a major player in diesel vehicles in a couple of years. The plant with a capacity to produce one lakh diesel engines would be operational in 2006. This has been done in the wake of major competition from Tata Indica and meets the growing demand of diesel cars in India. MARUTI PLANS FOR A NEW ENGINE AND TRANSMISSION PLANT The engine and the transmission plant will be owned by Suzuki Powertrain India Limited in which Suzuki Motor Corporation would hold 51 per cent stake and Maruti Udyog holding the balance. it was 19-20 per cent in the first quarter (April-June) of the current fiscal.1. so to 66 . the initial production would be 1 lakh diesel engines. suppli es diesel engines for Maruti's Zen and mid-sized Esteem models. This will further reduce the imported component in Maruti vehicles.747.an automobile BPO. At present. Till recently. and an additional $ 170 billion annually in new revenues once demand shoots up following the drop in prices. Though the main market for the Maruti vehicles is Europe.presumably this figure is going up now that Altos from Maruti. the 300. the study says. Germany. where it is selling over 70% of its exported 67 . it will cost 22-23 per cent less. and transport costs. among others. Hungary. Chile. Nepal. over 90 per cent of automobiles today are sold in the countries they are made in. Santros from Hyundai. Germany. In August.00 mark was crossed by the shipment of 571 units to the same country. Yet. has been very popular in Europe where a landmark 200. 2003 Maruti crossed a milestone of exporting 300. why produce cars in high-wage islands? If a car was produced in India instead of in Japan.000 vehicles since its first export in 1986. so there's a lot of money to be made by shifting the production overseas. UK. and the combination of which means a 25 per cent increase in existing revenue levels. The result was staggering: the industry stands to gain $ 150 billion annually in cost savings. U.000 vehicle were exported till March 2003. lower levels of automation. are being regularly exported out of India. as McKinsey points out. France and Poland in that order. Italy. after factoring in higher import duties for components/steel.speak. since it just costs $ 500 and just three weeks (and both figures are falling) to ship out a car to anywhere in the world. According to the study. France and Italy Maruti vehicles have made a mark. Indicas from Tata Motors. Europe is the largest destination of Maruti¶s exports and coincidentally after the first commercial shipment of 480 units to Hungary in 1987. which meets the Euro-3 norms. and Ikons from Ford.000 cars produced in low -cost countries were exported to high-cost ones -.K. The top ten destination of the cumulative exports have been Netherlands. Greece. Even in the highly developed and competitive markets of Netherlands.. The Alto. just 100. Ethiopia. Saudi Arabia.com/ol w/courses/books/Corporate%2520Strategies/Diversification%2520Using%2520 Mergers%2520and%2520Acquisition&page=8&ndsp=28&ved=1t:429. In the financial year 2003-04 Maruti exports contributed to more than 10% of total Maruti sales. The MiddleEast region has also opened up and is showing good potential for growth. Maruti has entered some unconventional markets like Angola.s:20 3&biw=1440&bih=710 68 . Djibouti. are Algeria. Benin.google. Uganda. Qatar and UAE. Costa Rica and El Salvador.r:20. Chile.openlearningworld. are Saudi Arabia. Kuwait.quantity.co.000 vehicles in 2003-04 which was 59% higher than last year. http://www. Bahrain. The markets outside of Europe that have large quantities. Maruti exported more than 51. it is exporting in over 70 countries. Srilanka and Bangladesh. Some markets in this region where Maruti is. in the current year.in/imgres?imgurl=http://www. Morocco. according to a top official of the firm. is also important as it has completely divested now as a result MUL will now become a 100% subsidiary of Suzuki in the coming year.V. MARUTI EMERGING AS R&D HUB FOR SUZUKI MOTOR CORPORATION Japanese auto major Suzuki is all set to convert Maruti Udyog Ltd¶s research and development (R&D) facility as its Asia hub by 2007 for the design and development of new compact cars. Also the technical skills are abundantly available. Investment would be more in terms of manpower than in infrastructure. Suzuki¶s investment in India.  Thirdly. The country¶s leading car manufacturer will make substantial investments to upgrade its research and development centre at Gurgaon in Haryana for executing design and development projects for Suzuki.  Secondly. The company will be hiring more software engineers and technocrats to handle Suzuki¶s R&D projects. 69 . Apart from working on innovative features. modernisation and greater use of composite technologies in upcoming models. India is growing as an export hub along with the Indian market growing aggressively into becoming an attractive one for investors. which is already in place. the R&D teams will focus on latest technologies using CAD -CAM tools to roll out new models that will meet the needs of MUL¶s diverse customers in the future. again at a cheaper cost. The reasons as to why it can be good for R&D is that  Firstly the cost involved in R&D and infrastructure is low in India as compared to other countries. This includes localisation. best service advisor experience. The J. best in-service experience. 70 . 92% of Maruti Suzuki owners feel that work gets done right the first time during service. customers will find all car related needs met under one roof. Power CSI study 2004 also reveals that 97% of Maruti Suzuki owners would probably recommend the same make of vehicle. (4)One Stop Shop At Maruti Suzuki. (2)A Buying Experience Like No Other Maruti Suzuki has a sales network of 307 state-of -the-art showrooms across 189 cities. Maruti Suzuki scored the highest across all 7 parameters: least problems experienced with vehicle serviced. insurance. while 90% owners would probably repurchase the same make of vehicle. (3)Quality Service Across 1036 Cities In the J. best service delivery.1 in the premium compact car segment and the Esteem in the entry level mid . with a workforce of over 6000 trained sales personnel to guide MUL customers in finding the right car.size car segment across 9 paramet ers. fleet manage ment services. The Alto was chosen No.D.Key Success Factors (1)The Quality Advantage Maruti Suzuki owners experience fewer problems with their vehicles than any other car manufacturer in India (J. Whether it is easy finance. most user-friendly service and best service initiation experience.D. Power IQS Study 2004).D. exchange Maruti Suzuki is set to provide a single -window solution for all car related needs. Power CSI Study 2004. highest service quality. Not so in the case of a Maruti Suzuki. Although a car ma y be affordable to buy. This means every Maruti Suzuki owner gets the ideal combination of power and performance from his car. (6)Lowest Cost of Ownership The highest satisfaction ratings with regard to cost of ownership among all models are all Maruti Suzuki vehicles: Zen. and it is here where Maruti Suzuki shines. Maruti 800. This new technology harnesses the power of a brainy 16 -bit computer to a fuel-efficient 4-valve engine to create optimum engine delivery. Alto and Omni. (7) Technological Advantage It has introduced the superior 16 * 4 Hypertech engines across the entire Maruti Suzuki range. Esteem. it may not necessarily be affordable to maintain. It is in the economy segment that the affordability of spares is most co mpetitive. Wagon R. as some of its regularly used spare parts may be priced quite steeply.(5) The Low Cost Maintenance Advantage The acquisition cost is unfortunately not the only cost customers face when buying a car. 71 . Maruti is looking forward to bring about a perception change about the company and its cars. Companies like Toyota. Chevrolet is launching Spark in 20 06. Skoda is launching Fabia. Honda is launching Jazz in 2006. The major thrust in the facelift endeavour is with the launch of 1. This could be of concern to Maruti which is low cost provider of passenger cars. Maruti Baleno has failed due to one of the major reasons being that customers could not identify Maruti with a car as sophisticated as Maruti Baleno. It has replaced the traditional Maruti logo on grill µstylish µM¶ with S¶. Maruti has also changed its logo a t the front grill.  New emission norms like Bharat Stage 3 which has come into effect from April 2005 has increased car prices by Rs. Hyundai is launching its new compact car in 2006. Maruti wants to change it for a more aggressive image.3 litre Swift. Honda and Fiat are planning to come out with small segment cars in near future. Maruti started the exercise with the new-look Zen.20000 and Bharat Stage 4 which is coming into force in 2007 will contribute in increasing car prices further. Ford. GM is has reduced prices of its Corsa. and Suzuki's decision to pick India as one of the first markets for this radically different -looking car gave this endeavor a new thrust.Future Challenges  Maruti has always been identified as a traditional carmaker producing value -formoney cars and right now the biggest hurdle Maruti is facing is to shed this image.  The next threat Maruti faces is the growing competition in compact cars .Ford is launching Focus and Fiesta. Fiat is coming up with Panda and new Fiat Palio. GM is launching Aveo in 2006. It¶s a style statement from Maruti to Indian market. All this will pose a major threat to Maruti leadership in compact cars. 72 .  Rise in petrol prices and growing popularity of other substitute fuels like CNG will be another threat to Maruti. There is also a threat to Suzuki from R&D investment by Toyota and Honda i n Hybrid cars. Hybrid cars could run on both petrol and gaseous fuels. 73 . Maruti will have to keep on making modifications in its present models or its models will face extinction. As Swift and Wagon R are replacing the Zen market. Maruti is planning phasing out Zen in 2007 and there were rumors of phasing out Maruti 800 also. Maruti models like Maruti 800 which is in market for the last twenty years and others like Zen and Esteem which have also entered the decline phase are the other threats. This all makes Suzuki to replace these brands with new launches .  There is a threat to Maruti models ageing. skill& usage ‡ Introduce a Potential Appraisal System ‡ Improvements in internal & external Training & its effective utilization. Training need identification ‡ Systematic career planning. Empowerment. HR INITIATIVES ‡ Prepare MUL Strategic Business Plan-2000-2003. Roll out of Vision ‡ Raise cost consciousness for cost control and reduction ‡ Exposure on Brand Strategy to all non .its process. Job enrichment ‡ Periodic communication meeting at various levels. create a learning and vibrant organization with high sense of pride amongst it members. To achieve the Vision & Goal ‡ Improve the performance Appraisal system .HR Department Lead and Facilitate continuous change towards organizational excellence.marketing staff ‡ Retention of Talent 74 . Job Rotation. CULTURE BUILDING INITIATIVES SINCE INCEPTION Japanese Management philosophy of Team Spirit ‡ Common uniform ‡ Open office ‡ Common Canteen ‡ Open Office ± Easy accessibility. Speedy ‡ Communication and decision making ‡ Morning Meetings ‡ Morning Exercises FOCUS OF EFFECTIVE MANAGEMENT PROCESS ‡ Management Committee Meetings ± every Tuesday ‡ ·Single unaffiliated Union ‡ Excellent Industrial Relation scenario ‡ No loss of Monday due to strike/lockout etc. Supervisors. in past 5 yrs. ‡ Declared organization structure Workers (Technical /Assistant. ‡ Maruti Udyog Sahyog Samiti ± a forum for non unionized staff.). 75 . Managers ‡ Top Driven HR ± MD is also Director HR ‡ HR¶s role of a facilitator ‡ Line managers as HR Managers ‡ Year of the Customer ± ‡ HR Internal Customer Focus ‡ Focus on Internal & External Customer. Executives. 1} Preliminary Interview (screening applications) Initial screening is done to weed out totally undesirable/unqualified candidates at the outset. the necessary information is also elicited from 76 . Depending on availability of infrastructure Interview of shortlisted/ qualified personnel MEANING OF SELECTION It is the process of searching the potential candidate.Selection and Recruitment process The recruiting procedure at a Maruti dealership is as follows: For a particular city. It is negative in nature in the Indian context. The complexity of selection procedures increases with the level and responsibility of the position to be filled. It is a series of successive hurdles or barriers which an applicant must cross. Steps in Selection Process of Maruti Udyog ltd Selection process consists of a series of steps. at the same time. These hurdles or screens are designed to eliminate non qualified candidate at any poi nt in the selection process There is no standards selection procedure to be used in all organizations or for all jobs. at each stage. It is essentially a sorting process in which prospective candidates are given the necessary information about the nature of the job and the organization. for a particular Dealership The dealership should release an advertisement. But it is positive in the US context. facts may come light which may lead to the rejection of the applicant. 2} Application Form Application form is traditional and widely used device for collecting information from candidates. training. It helps to determine whether it is worthwhile for a candidate to fill up the application form. 3} Selection Test Psychological tests are being increasingly used in employee selection. where reference for caste. salary expected and the like. Tests are useful when the number of applicants is large. where the information collected through application letter or application forms and tests can be crosschecked in the interview. Selection in interview serves three purposes: a) Obtaining information about the background. education. where a test may involve some aspect of an individual¶s attitudes. It should provide all the information relevant to selection. birth place. experience. work history and interests of candidate 77 . behavior and performance. where candidates demonstrates their capabilities and strength in relevant to their academic credentials. as at best it reveals that the candidates who scored above the predetermined cutoff points are likely to be more successful than those scoring below the cutoff point.the candidates about their education. 4} Employment Interview Interview is an essential element of selection and no selection procedure is complete without one or more personal interviews. skills. religion. may be avoided as it may be regarded an evidence of discrimination. 6} Reference Checks The applicant is asked to mention in his application form. where those who are physically unfit are rejected. the names and addresses of two or more persons who know him well. However. and c) Establishing a friendly relationship between the employer and the candidate so as to motivate the successful applicant to work for the organization. These people are requested to provide their frank opinion about the candidate without incurring any liability. 78 . This record will help in settling company¶s liability under the workmen compensation Act for claim for any injury. In government and public sector organizations. b) It reveals existing disabilities and provides a recor d of the employee¶s health at the time of selection. These may be his previous employers. c) It prevents the employment of people suffering from contagious diseases. the specific job and human resource policies. in practice interview becomes a one -sided affair serving only the first purpose. heads of education institutions or public figures. d) It identifies candidates who are otherwise suitable but require specific jobs due to physical handicaps and allergies. Such examination serves the following purposes: - a) It determines whether the candidate is physically fit to perform the job.b) Giving information to candidates about the company. 5 Medical Examinations Applicants who have crossed the above stages are sent for a physical examination either to the company¶s physician or to a medical officer approved for the purpose. but as most references are received after the candidate has started work. but is not advisable to rely exclusively on the referees because they are generally biased in favor of the candidate. (f) References are occasionally biased. where there is a chance to see whether nonverbal behavior matches what is said. Therefore. and reasons for leaving. they can only be used to warn managers of possible faults in the candidate which in serious cases may eventually lead to warnings followed by dismissal. if any. the best references are obtained in person. many references merely state the job title. (d) An offer may be made µsubject to satisfactory references¶. (e) Employers giving references are usually extremely cautious.candidates are generally required to route their applications through their present employers. telephoning is the next best alte rnative. giving a good reference to hasten an employee¶s departure or a poor one because of a grudge. If such a meeting cannot be arranged. (b) Because of prospective employer would be breaking a confidence if He or she asked for a reference before an offer of a job had been made and accepted. and do not wish their employers to know they are looking elsewhere. the date of employment. 79 . The opinion of referees can be useful in judging the future behavior and performance of candidate. selection is over and the Reference is too late to affect it. (c) By the time an offer has been accepted. (a) Most candidates are employed at the time of their application. c) The candidate must know the essential conditions of employment. where upon satisfactory performance during this period. your employment will be subject to satisfactory references and medical examinations. selection process is carried out by the human resource department. the rank. holidays. the first year you will be under training at the head office. The candidates shortlisted by the department are finally approved by the executive of concerned departments or units. d) Any provisos must be clearly stated. bonuses and fringe benefits. In some organizations. where the decisions of the department are recommendatory. the salary grade. 80 . the n you will be transferred to up-country branches. the date by which the candidate should join and other terms and conditions in brief. the candidate is finally confirmed in the job on the terms employed with. for instance. whether permanent or contractual basis. Employment is offered in the form of an appointment letter mentioning the post.7} Final Approval In most of the organizations. a contract of service is signed by both the candidate and the representative of the organization. It is at this point where a selected applicant is handled with a letter of offer for a job: a) The wage or salary offered must not o nly be appropriate to the job and attractive to the candidate but consistent with the earnings of present employees. such as hours of work. Appointment is generally made on probation of one or two years. for example. 8} Employment. b) The job must be named and any special conditions stated. 10} Follow ± up (Evaluation) All selection should be validated by follow-up. it a stage where employee is asked how he or she feels about progress to date and the worker¶s immediate supervisor is asked for comments. introducing them to the company and to their colleagues. The process of receiving employees when they begin work. and informing them of the activities.9} Induction. customs and traditions of the company is called induction. 81 . If a follow-up is unfavourable it is probable that selection has been a fault. At this juncture various induction courses are done to new recruit in order to acclimatize them with the new working environment. the whole process from job specification to interview is then reviewed to see if a better choice can be made next time. which are compared with the notes taken at the selection interview. Induction and Succession ‡ Transparent Recruitment & Selection process ‡ Recruitment on an All India Basis ± no sector or regionspecific. ‡ Engineers ± CAMPUS - IITs/RECs/Rorkee /HBTI ‡ ALL-INDIA TEST ‡ MBAs ± IIMs/XLRI ‡ CAs - Rank Holders ‡ India Exam & Apprenticeship In MUL ‡ Lateral Entry for Experienced Professionals. Matter usually discussed in the Maruti Induction ‡ Overview of Maruti and Suzuki ‡ Building understanding of the car market in India and varioussegments ‡ Understand MUL¶s product range and positioning in eachsegment ‡ Understanding the basics in the automobile industry ‡ Role of financing as a sales tool and the various financing options available ‡ Ensuring personal effectiveness ‡ Understand the attributes of a good DSE ‡ Overview of each Maruti model and the MUL µAdvantage¶ ‡ Overview of the selling process and how to uncover needs of acustomer to do need based selling 82 Induction program Objective: The objective of this program is to facilitate smooth induction of the new DSEs into their place of work i.e. Marutidealerships. This program attempts to orient the new DSEs on a fewimportant parameters, which are listed below: Overview of Maruti and Suzuki . Building understanding of the car market in India and varioussegments . Understand MUL¶s product range and positioning in each segment . Understanding the basics in the automobile industry Overview of each Maruti model and the MUL µAdvantage¶ Overview of the selling process and how to uncover needs of acustomer to do need based selling . Role of financing as a sales tool and the various financing options available . Ensuring personal effectiveness . Understand the attributes of a good DSE 83 Training Maruti arranges the training at several intervals. The training is mandatory for all the employees. The training schedule of all employees is maintained by the HR manager. IMPORTANCE OF TRAINING Optimum Utilization of Human Resources ± Training and Development helps in optimizing the utilization of human resource that further helps the employee to achieve the organizational goals as well as their individual goals. ‡ Development of Human Resources ± Training and Development helps to provide an opportunity and broad structure for the development of human resources¶ technical and behavioral skills in an organization. It also helps the employees in attaining personal growth. ‡ Development of skills of employees ± Training and Development helps in increasing the job knowledge and skills of employees at each level. It helps to expand the horizons of human intellect and an overall personality of the employees. ‡ Productivity ± Training and Development helps in increasing the productivity of the employees that helps the organization further to achieve its long -term goal. ‡ Team spirit ± Training and Development helps in inculcating the sense of team work, team spirit, and inter-team collaborations. It helps in inculcating the zeal to learn within the employees. 84 85 . It helps in creating the learning culture within the organization. The employees get these feelings from leaders. ‡ Organization Climate ± Training and Development helps building the positive perception and feeling about the organization. and peers. ‡ Morale ± Training and Development helps in improving the morale of the work force. ‡ Quality ± Training and Development helps in improving upon the quality of work and work-life. subordinates. ‡ Profitability ± Training and Development leads to improved profitability and more positive attitudes towards profit orientation. ‡ Image ± Training and Development helps in creating a better corporate image. It helps to build good employee. ‡ Health and Safety ± Training and Development helps in improving the health and safety of the organization thus preventing obsolescence. ‡ Healthy work-environment ± Training and Development helps in creating the healthy working environment. relationship so that individual goals aligns with organizational goal.‡ Organization Culture ± Training and Development helps to develop and improve the organizational health culture and effectiveness. you can enter the information about the training. how many executives out of the given list have attended the training? With the help of these training details we are generating various MIS reports. Each organization would like to have executives who are well trained so that they can be more productive. which have been conducted during a particular time period.‡ Training and Development aids in organizational development i. The vehicle manufacturers conduct several trainings sothat they can achieve their goals. ‡ Training and Development helps in developing leadership skills. In the Training master form.e. so you can find out the total information of a particular training with just one click over there. and other a spects that successful workers and managers usually display. Organization gets more effective decision making and problem solving. The details provided here can he lp the management to find out an efficient person for a special task. better attitudes. It helps in understanding and carrying out organizational policies. motivation. That is. loyalty. Searching facility is also available. 86 . Training Details The strength of any organization is its manpower. We are also maintaining the information regarding the attendance of the executives in a specific training. and enhance the business value of our associates to sustain our position of leadership and build customer lo yalty to MUL´ Objectives To ensure multiple knowledge and skill development of DSEs required selling cars and handling competition  Consultative Selling Approach. knowledge and skills.  To employ training as a tool to achieve customer delight and customer loyalty  Make DSEs as Car Advisors and be a single window interface with the customer 87 .  Continuous Feedback and Performance monitoring.SALES AND TRAINING DEPARTMENT OF MARUTI UDYOG Vision ³Equipping MUL and Dealer Sales Fraternity with the requisite mindset. 523 million in the previous year showing an impressive growth of 23. 88 . paid for the year ended 31st March 2007. 188.445 million as against a dividend of 90% . Earnings before depreciation . 2.888 million in the previous year.798 million in the previous year showing a growth of 9.308 million against Rs. 5 each) for the year ended 31st March 2008 amounting to Rs.8%. Based on technical evaluation and market considerations. the Company has.238 million as against Rs.122 million for the current year with a corresponding reduction in profit for the year and net fixed assets. 152. with effect from 1st April 2007.4%. Rs. DIVIDEND The Board recommends a dividend of 100% (i.030 million against Rs. 22. recording a jump of 20. 5 per equity share of Rs. 1. Amounting to Rs. 17. revised the estimated useful life of certain assets which resulted in depreciation being higher by Rs.308 million against Rs. 31. tax and amortization (EBDITA) stood at Rs.620 million in the previous year showing a growth of 10. 25.e. 15.9%. Profit before tax (PBT) stood at Rs. 25.Financial Highlights The gross revenue (net of excise) of the Company for the year was Rs.300 million. interest. 1.8% and Profit after Tax (PAT) stood at Rs. the Indian government formulated an auto policy that aimed at promoting integrated. enduring and self -sustained growth of the Indian automotive industry  Allows automatic approval for foreign equity investment upto 100% in the automotive sector and does not lay down any minimum investment criteria. phased.Government olicies and regulations  In 2002.  Weighted tax deduction of upto 150% for in -house research and R & D activities  India is expected to align its crash requirements and emission standards with European standards in the 2008 / 09 timeframe.  Presently Bharat Stage III ( Equivalent to Euro III) is mandated in Metros and other large cities and Bharat Stage II ( Equivalent to Euro II) for the rest of the country.  Lays emphasis on R & D activities carried out by companies in India. Bharat Stage IV ( equivalent to Euro IV) is expected to be introduced in the large Indian metros around 2009 and Bharat Stage III in the rest of the country 89 . Division of roducts                                      Maruti yMaruti 800 STD BS III y Maruti 800 AC BS III Omni y5 seater Maruti Omni y8 seater Maruti Omni yLPG Maruti Omni Maruti Alto y Alto y Alto Lx y Alto Lxi Maruti Zen yMaruti Zen Lx yMaruti Zen Lxi yMaruti Zen Vxi Wagon R y WagonR Lx y WagonR Lxi y WagonR Vxi y WagonR Ax Versa y5 seater y8 seater ( DX & DX2) Maruti Esteem yMaruti Esteem Lx yMaruti Esteem Lxi yMaruti Esteem Vxi Baleno yBaleno Sedan VXi yBaleno Sedan Lxi 90 . Our high sales and customer care standards led us to achieve the No.size car segment. layout and performance of vehicles across 8 parameters.1 nameplate in the J. Power SSI Study 2004.1 in the premium compac t car segment and the Esteem in the entry level mid .D. content. Power APEAL Study 2004 proclaimed the Wagon R no. 1 in the premium compact car segment and the Esteem No. This study measures owner in terms of design.D.1 in the entry level mid . The Alto was chosen No. A Buying Experience like No Other Maruti Suzuki has a sales network of 307 state-of -the-art showrooms across 189 cities. The J.D.size car segment across 9 parameters. Power\ IQS Study 2004).SWOT ANALYSIS OF THE COM ANY STRENGTHS WEAKNESSES OPPORTUNITIES THREATS STRENGTHS The Quality Advantage Maruti Suzuki owners experience fewer problems with their vehicles than any other car manufacturer in India (J. 91 . with a workforce of over 6000 trained sales personnel to guide our customers in finding the right car. mileage of maruti product is less than other. The J. 92% of Maruti Suzuki owners feel that work gets done right the first time during service. highest service quality.D. most user-friendly service and best service initiation experience. So this is a big weakness of maruti. best service delivery. WEAKNESS ‡ Not so well-known in this segment ‡ Comparatively less mileage-there is a also weakness of maruti suziki . Maruti Suzuki scored the highest across all 7 parameters: least problems experienced with vehicle serviced.Quality Service Across 1036 Cities In the J.D. Power CSI study 2004 also reveals that 97% of Maruti Suzuki owners would probably recommend the same make of vehicle. Power CSI Study 2004. best in-service experience. whil e 90%owners would probably repurchase the same make of vehicle. best service advisor Experience. ‡ ESTABLISH PROPER POLICIES AND PROCEDURE FOR LEAVE ‡ PROPER COMMUNICATION OF POLICIES TO WORKERS ‡ ATTITUDE OF SUPERVISOR ‡ INSTALLATION OF HIGH CAPACITY GENERATORS 92 . GM is launching Aveo in 2006. and Suzuki's decision to pick India as one of the first markets for this radically different-looking car gave this endeavor a nethrust. It¶s a style statement from Maruti to Indian market. Ford. GM is has reduced prices of its Corsa. Hyundai is launching its new compact car in 2006. Honda and Fiat are planning to come out with small segment cars in near future. Maruti is looking forward to bring about a perception change about the company and its cars. Maruti Baleno has failed due to one of the major reasons being thatcustomers could not identify Maruti with a car as sophisticated as Maruti Baleno. Maruti wants to change it for a more aggressive image.Maruti started the exercise with the new-look Zen.OPPORTUNITIES ‡ ESTABLISH PROPER POLICIES AND PROCEDURE FOR LEAVE ‡ PROPER COMMUNICATION OF POLICIES TO WORKERS ‡ ATTITUDE OF SUPERVISOR ‡ INSTALLATION OF HIGH CAPACITY GENERATORS THEARTS Maruti has always been identified as a traditional carmaker producing value -formoney cars and right now the biggest hurdle Maruti is facing is to shed this image. Chevrolet is launching Spark in 2006. The next threat Maruti faces is the growing competition in compact cars. The major thrust in the facelift endeavour is with the launch of 1.3 litre Swift.Ford is launching Focus and Fiesta. It has replaced the traditional Maruti logo on grill µstylish µM¶ with S¶. Maruti has also changed its logo at the front grill.Companies like Toyota. Fiat is coming up with Panda and new Fiat 93 . Honda is launching Jazz in 2006. As Swift and Wagon R are replacing the Zen market. Hybrid cars could run on both petrol and gaseous fuels. Skoda is launching Fabia. 94 . This could be of concern to Maruti which is low cost provider of passenger cars. Rise in petrol prices and growing popularity of other substitute fuels like CNG will be another threat to Maruti. Maruti will have to keep on making modifications in its present models or its models will face extinction.Palio. New emission norms like Bharat Stage 3 which has come into effect fro m April 2005 has increased car prices by Rs. There is also a threat to Suzuki from R&D investment by Toyota and Honda in Hybrid cars. Maruti is planning phasing out Zen in 2007 and there were r umors of phasing out Maruti 800 also. All this will pose a major threat to Maruti leadership in compact cars.20000 and Bharat Stage 4 which is coming into force in 2007 will contribute in increasing car prices further. This all makes Suzuki to replace these brands with new launches . There is a threat to Maruti models ageing. Maruti models like Maruti 800 which is in market for the last twenty years and others like Zen and Esteem which have also entered the decline phase are the other threats. gearbox and rear engine mounting to be attached to a suspension frame. its one-and-a-half box. There are three variants of Maruti Su zuki Swift : Swift LXi Swift VXi Swift ZXi Swift LXi 95 . aggressive form makes for a look of stability. steering. European Styling. And the best way to take your driving pleasure to a brand -new high. Its solid look is complemented by an equally rooted road presenceand class-defining ride quality. Styledwith a clear sense of muscularity.4P¶s OF MARUTISUZUKI SWIFT PRODUCT PRICE PROMOTION PLACE PRODUCT Features: The all-new Maruti Suzuki Swift is fully loaded with a range of exciting new features. New chassis systems allow for the front suspension lower arms. It's a perfect complement to your evolved tastes and lifestyle. a sense that it is packed with energy and ready to deliver a dynamic drive. and a greater feeling of stability as you sail over our roads with feather-touch ease.The new Swift is a generation different from Suzuki design. Dream -Like Handling. Japanese Engineering. You get lower road noise. sun visors (both sides). trip meter(digital display). rear fog lamps. striking features of this model are black colored A & B pillars. driver's seat belt warning lamp. fabric accented door trims. tachometer. headlamp leveling device. 96 . high mounted stop lamp. seat belts front 3-point ELR with pretensioning. keyless entry. central door locking (5 doors). front fog lamps. 12v accessory socket in center console. front door trim pockets. power steering.dual front airbags. central door locking (4 door). rear1). driver's seatbelt warning lamp. key not removed warning buzzer. wind screen wiper 2 speed plus 1 speed intermittent. door ajar warming lamp.tailgate opener electromagnetic type etc. rear parcel shelf. console box (lower). colored outside door handles. halogen headlamps. child lock (rear door). 12vaccessory socket in luggage room. rear seat head restraints. Swift ZXi Special features that have made this model more market friendly are rear window demister. 3 spoke urethane steering wheel. brake assist . etc. tailgate opener key type. are the features available in this model. driver seat height adjuster. vanity mirrors (sun visor co -driver side). light off/ key reminder. cup holders (front 2. rear window wiper. day and night rear view mirror.3 assist grips. OVRM (internally adjusted). manual air-conditioning. antenna. front and rear electronic windows. room lamp and luggage room. green tinted glass window. seat belts 3 -point ELR with shoulderNadjusters. Swift VXi Apart from the features found in other model. cabin light (3 position). colored outside door mirror cowls. rear seat belts etc. heater and manual Air conditioning. Swift LXi 416485 416485 Swift VXi 443924 443924 Swift VXi (ABS) 464962 464962 Swift ZXi 528096 528096 97 . This price range would practically rip apart Hyundai¶s offering in Getz. Cars at a price higher than 4 lakh have to pay a 4% road tax. The analysts predict the pricing of this premium hatchback to start from Rs.5 lakh.PRICE Maruti is expected to take Hyundai heads on with the pricing of their upcoming Maruti Suzuki Swift car. India¶s largest automobile manufacturer is now targeting the premium segment with their latest model from the Suzuki¶s stable. they would quite likely force the competition to rethink th eir strategy. 4. 4 lakh. There is another advantage in doing so considering in the capital city of Delhi NCR road tax on the sub 4 lakh priced cars is comparatively lower at 2%. Both the companies are known for their value based offerings and Maruti with their extensive service network and brand reputation for making reliable cars should get the customer¶s nod over their competition. Delhi NCR is one of the major targeted markets and it might get the benefit of this policy. which is priced at a much higher tag of Rs. However. The official pricing however is still not out. After launching cars for the masses since so many years. And if they indeed do take the chance ofpricing Suzuki Swift at a considerable lower price than Hyundai Getz. the company is said to be studying the prospects of launching the b ase model at the 4-lakh price tag. New Delhi. ex-showroom. the company increased capacity for the Swift which helped cut down on the waiting time from an estimated three months. The company currently makes over 300 units every day. The diesel version will benefit from the excise sops in this year¶s buget. and the initial output of 200 units a day on a two -shift basis.200 units. The car recorded an estimated 4. 98 . having totted up sales of 61. The Swift has made a real impact in the small hatchback segment leaving its closet rival.000 bookings at the time of its launch. In October.85 lakh. Three versions were launched with the base variant carrying a retail tag of Rs 3. Maruti is now gearing up for the diesel version of the Swift which is expected to debut by October. Between April 2005 and April 2006. This is higher than what Maruti had initially planned to sell. Hyundai sold 16.PROMOTION When Maruti Udyog launched the Swift in May last year. wasn¶t enough to cope with demand. the company says the Swift is now the most sold car in the first year of any car in the history of the Indian automobile industry. and this aggressive pricing only reinforced this feeling.872 units of the Getz. and it remains to be seen how the models fares in the marketplace. the automotive industry was agog with expectation that the car had the makings of a real winner.A year later. the Getz far behind. 5 lakh units per annum. PLOT NO. BANDRA (W) MUMBAI MAHARASHTRA M/S SK WHEELS PVT LTD SITE NO. called Maruti Suzuki Automobiles India Limited.D-234.TTC INDL.524. MUMBAI Showrooms AUTOMOTIVE MANUFACTURERS LTD MIDC.2 crore plant has a capacity to roll out 1 lakh cars per year with a capacity to scale up to 2. The engine and the transmission plant has owned by Suzuki Powertrain India Limited in which Suzuki Motor Corporation would hold 51 per cent stake and Maruti Udyog holding the balance.AREA. The car manufacturing plant will begin commercial production by the end of 2006. However. the initial production is 1 lakh diesel engines.S.000 petrol engines and 1. is a joint venture between Maruti Udyog and Suzuki Motor Corporation holding a 70 per cent and 30 per cent stake respectively. The Rs1.V.PLACE The car manufacturing company. The ultimate total plant capacity is three lakh diesel engines. D-267 TTC INDUSTRIAL AREA. ROAD. 20. MIDC TURBHE.SHIRVANE VILLAGE BOMBAY PUNE ROAD Autovista 257. NAVI MUMBAI 99 .4 lakh transmission assemblies. 11-C N S PATKAR MARG KEMPS CORNER SAI SERVICE STATION LTD PHOENIX MILL COMPOUND. 100 .NAVNIT MOTORS PVT LTD GOKUL NAGAR MUMBAI-AGRA ROAD. 462. LOWER PAREL.SENAPATI BAPAT MARG. THANE-400 061 RATAN MOTORS 23/24 BEZZOLA COMPLEX SION-TROMBAY ROAD CHEMBUR SAH and SANGHI AUTO AGENCIES (P) LTD GIRI KUNJ. How do you get influenced to choose a car? O T. What type of look you like in cars? O Sporty look O Rich look Q3.45 O Male O 45 and Above O Female Q1.V O Promotions ONews paper O Test drive Q2. Which company give you best service after sales? O Tata motors O Maruti Suzuki 101 .Chapter# 4 Questionnaire Sample Topic: Comparative study between Maruti and Tata Motors Name: ________________ Age: Sex: O 25. Which car you think is smooth in driving in diesel? O Tata cars O Maruti car Q4. what do you see when you buy a car? O Driving & luxuriousness O Mileage & look O Price & maintenance O Reputation of automobile company Q8. which automobile companies cars design is good? O Tata motors O Maruti Suzuki Q6. Give your suggestion on Maruti suzuki or Tata motors Dealers? ________________________________________________________________ ________________________________________________________________ ___________________________. which automobile company car you think has a largest sale in India? O Tata motors O Maruti Suzuki Q7. which company has a good technological engine? O Tata motors O Maruti Suzuki Q9. 102 .Q5. How do you get influenced to choose a car? O T.45 45 and Above Total T.V O Promotions O Newspaper O Test drive Age Categories 25.Data Anal i and Tabulation Q1.V Promotions Newspaper Test Drive 16 9 25 12 15 27 13 17 30 9 9 18 Pie Diagram Media Test Drive 18% TV 25% Newspaper 30% Promotions 27% 103 . as it taken only when the person is willing to buy the car. y And last through test drive. y And then TV as it is viewed by many people in India. As newspaper is given more importance in today¶s world they use this medium to advertise.y Green Stands for Newspaper with 30% y Red stands for Promotion with 27% y Blue stands for TV with 25% y Purple stands for Test Drive with 18% Bar Grap 18 16 14 12 10 8 Newspaper ¡ TV Promotions 6 Test Dri e 4 2 0 25. 104 . y And then the promotions which are done through display the car in shopping malls. pamphlets before the car is launched.45 45& Abo e   Reason:- y These car brands take a greater support of Medias through which the visual as well audio or their message can be given to their willing customer. 45 45 and Above Total Sport Look 29 21 50 Ri Look 21 29 50 Pie Diagram:- Looks Rich 50% Sporty 50% y Red stands for Rich look with 50% y Blue stands for Sporty look with 50% 105 .Q2. What type of look you like in cars? O Sporty look O Rich look Age Categories 25. 106 .45 45& abo e Reason:- y People now-a. y Young generation wants more of sporty look rather than rich but in the age of 45 and above they want more of rich look rather than sporty.days want sporty as well as rich looks which can stand by their living standards.5 2 1.5 Sporty Look Rich Look 1 0.Bar Grap :5 4.5 4 3.5 3 2.5 0 ¢ 25. Q3.45 45 and Above Total Tata Motors 24 26 50 Maruti Cars 26 24 50 Pie Diagram:- Smoothness Maruti Suzuki 50% Tata Motors 50% y Red stands for Smoothness of Maruti with 50% y Blue stands for Smoothness of Tata with 50% 107 . Which car you think is smooth in driving in diesel? O Tata cars O Maruti car Age Catogries 25. 45 45& abo e Reason:- y In smoothness they again have a good tough competition y They both are producing cars which are smooth in driving for their customers.5 23 £ 25. 108 .5 Series 2 24 23.Bar Grap :- 26.5 26 25.5 25 Tata Motors 24. Q4. Which company gives you best service after sales? O Tata motors O Maruti Suzuki Age Catogries 25.45 45 and Above Total Tata Motors 20 30 50 Maruti Suzuki 30 20 50 Pie Diagram:- After Sales Service Maruti Suzuki 50% Tata Motors 50% y Red stands for After sales services of Maruti with 50% y Blue stands for After sales services of Tata with 50% 109 . 45 45& abo e Reason:- y After sales services of both company is good as people said that have created a good brand image for their products. 110 . y For after sale services they are in tough competition in front of each other so we got answer equal for both in total.Bar Grap :35 30 25 20 Tata Motors 15 10 Maruti Cars 5 0 ¤ 25. Which automobile companies¶ cars design is good? O Tata motors O Maruti Suzuki Age Catogries 25.Q5.45 45 and Above Total Tata Motors 17 25 42 Maruti Suzuki 33 25 58 Pie Diagram:- Car Design Tata Motors 42% Maruti Suzuki 58% y Red stands for Car design of Maruti with 58% y Blue stands for Car design of Tata with 42% 111 . 112 .Bar Grap :35 30 25 20 Tata Motors 15 10 Maruti Suzuki 5 0 ¥ 25. even they have good image in front of people¶s eye.45 45& abo e Reason:- y From this we came to know that people have liked the design more of Maruti Suzuki as it is Indian Company as has taken the interest of thousands of Indians so people trust the company y Survey says that 42% of the people have do liked the Tata Motors car so hence. Which automobile company car you think has a largest sale in India? O Tata motors O Maruti Suzuki Age Catogries 25.Q6.45 45 and Above Total Tata Motors 20 17 37 Maruti Suzuki 30 33 63 Pie Diagram:- Largest Sales Tata Motors 37% Maruti Suzuki 63% y Red stands for Largest Sales of Maruti with 63% y Blue stands for Largest Sales of Tata with 37% 113 . 114 .Bar Grap :35 30 25 20 Tata Motors 15 10 Maruti Suzuki 5 0 ¦ 25. y To some extent it can be true as their can easily suits to an individual¶s pocket.45 45& abo e Reason:- y From this question we came to know that people think that Maruti has the largest sales of car in India as compared to Tata Motors. What do you see when you buy a car? O Driving & Luxuriousness O Mileage & Look O Price & Maintenance O Reputation of automobile company Age Categories 25.45 Driving& Luxury 7 Mileage& Look 24 19 Pri e& Maintenances 15 15 Brand reputation 4 3 45 and Above 13 Total 20 43 30 7 Pie Diagram:- Things you want Reputation 7% Price & Maintenances 30% Dri ing & Luxury 20% § Mileage & Looks 43% 115 .Q7. 116  .45 45& abo e Reason:- y Through this question we came to know that people are more interested in Mileage and look. y Than importance¶s to price and maintenances is also given as while buying people do examine the cost of the car and type of maintenances it will require.y Green Stands for Price and Maintenances with 30% y Red stands for Mileage and Looks with 43% y Blue stands for Driving and Luxury with 20% y Purple stands for Reputation with 7% Bar Grap :30 25 20 Dri e & luxury 15 Mileage & Look   © Pri e& Maintenan e 10 Reputation 5 0 ¨ 25. y And then driving and luxury comes into existence y And at the last they also give preferences to reputation of the car company. Only if car give good mileage it will go for long years. Q8.45 45 and Above Total Tata Motors 15 28 43 Maruti Suzuki 35 22 57 Pie Diagram:- Engine Tata Motors 43% Maruti 57% y Red stands for Technological Engine of Maruti with 57% y Blue stands for Technological Engine of Tata with 43% 117 . Which company has a good technological engine? O Tata motors O Maruti Suzuki Age Categories 25. 45 45& abo e Reason:- y This reason was for the best engine where the most preferences are given to engine of Maruti as maruti is running successfully.Bar Grap :40 35 30 25 20 15 10 5 0  Tata Motors Maruti Suzuki 25. y Both the age groups have given more priority to the Maruti where as 43% goes with Tata motors 118 . y Maruti has given good services in past and hope try to keep the same standards of their cars. y Maruti must focus on his model of his car and expand his automobile business throughout the world. 119 .Q9. Give your suggestion on Maruti suzuki or Tata motors Dealers? y Tata has to improve his engine performance and has to improve after sales services. y Tata Motors specialist for heavy vehicles and should focus more on light vehicles. y Maruti Company has a problem in swift which will create lots of problem in future of the company. y Tata must focus on his product efficiency and also use more tactics to attract more customers to it. Chapter# 5 Conclusion Based on these factors the various strategic alternatives were evaluated. The various course of action for these strategic thrust areas and suitable matrixes evaluate them are identified. The areas of strategic thrust which Maruti can concentrate on are identified. Online Customer satisfaction trade Separate dealers based on value Dealer profitability. Percentage of cannibalization Wallet shares Concentrate more on customer solution Percentage profit for each business unit Number of Maruti 800s sold HOLD ON ³4 for 2´when 1 lac car is introduced 120 . Strategic Thrusts Increases Scope Action Tap the huge component & accessories market New product Same market New product New market Market rationalization Distribution rationalization Enter fast growing CV segment and global platforms Expand geographically ± Europe and alternate energy Increase in profitable market share Measures Percentage of sales from new products ROE.ROA Finding rural markets. Tata has to improve his engine performance and has to improve after sales services. Amongst other things them survey looks at: Brand Awareness. ranging from 12 seaters to 60 seaters. the market research team conducts a continuous Brand Track study with an all -India scope. special purpose vehicles. ranging from two tonnes to 40 tonnes. The company has over 130 models of light. To consolidate and protect its leadership position. Tata must focus on his product efficiency and also use more tactics to attract more customers to it. 121 . with a 59% commercial vehicles. off-road tippers. Advertising Recall. buses ranging from 12 seaters to 60 seaters. off-road vehicles and defence vehicles. Vehicles and defence vehicles.Maruti Suzuki India Ltd (MSIL) has the highest marketshare in the automobile sector in India. buses ranging from two tonnes to 40 tonnes. The company has over 130 models of light. special purpose vehicles. Tata Motors is India's largest manufacturer of Tata Motors is India's largest manufacturer of commercial vehicles. and it ranks among the top six manufacturers of medium and heavy manufacturers of medium and heavy commercial vehicles in the world commercial vehicles in the world. tippers. Company Image and Competition Analysis. medium and heavy commercial vehicles. and it ranks among the top six market share. with a 59-per cent market share. medium and heavy commercial vehicles. Tata Motors specialist for heavy vehicles and should focus more on light vehicles . Product Experience. y 70% of the people would be buying cars because of good facilities. Yes. Yes. Customer not only wants good looking cars but also Driving & luxuriousness with 20% Mileage & look 43% Price & maintenance 30% Reputation of automobile company 7% 122 . now-a-days car companies are providing Test Drive in Advance so that customer who is willing to buy can know more about that car facilities. y Majority of respondents would like their cars as they are very famous in the market.Hypothesis Testing y More than 60% of the respondents will be aware about the care facilities and their usage. they do want rich look but that is for the age of people who are above 45 and with the below age customers wanted rich as well as more of stylish sporty look. they like the car design and the engine which gives low maintenances cost y Majority of the people would be willing for car which rich look and can come to their standard of living. Yes. they want low budget cars with low mileage engine 123 . Yes. of the people are interested in low budget cars which can suit their pockets.y I think only 40%. com/ourcommitment/articles/inside.html y http://www.com/pdf/2010/CG-Report-2010.tatamotors.r:20.com/marketing strategies of tata motors y http://www.Chapter # 6 Bibliography y http://marketingteacher.co.html y http://hubpages.com/hub/project on Leadership in TATA-Motors y http://www.tata.aspx?artid=99P VDfq88JI y http://www.naukrihub.com/olw/courses/books/Corporate%2520Strategies/Diversification %2520Using%2520Mergers%2520and%2520Acquisition&page=8& ndsp=28&ved=1t:429.com/article/2084661/tata_motors_succe ss_mantra.associatedcontent.s:203&biw=1440&bih=710 y http://www.com/india/automobile/overview/cars/sales/ 124 .malaysiaminilover.in/imgres?imgurl=http://www.openlearningwor ld.com/swot/tata motors swot.com/automobile/tata/ y http://www.google.info2india.pdf y http://www.