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Maruti Udyog Limited Managing competition – with success

Maruti Udyog LIMITED - managed competition successfully

Maruti Udyog Limited (MUL) was established in February 1981 by an Act of Parliament, to meet the increasing demand for a mode of personal transport caused by the lack of efficient public transport system. It has been established with the objectives – the modernization of the Indian automotive industry, the production of fuel efficient vehicles to conserve scarce resources and the production of commercial vehicles for the growing needs of indigenous Indian population. A license and a Joint Venture agreement was signed with Suzuki Motor of Japan in October 1983, by which Suzuki acquired 26% stake and has agreed to provide advanced technology and Japanese management practices. Suzuki has been preferred for the joint venture because of its history in the manufacture and sale of small cars worldwide. There was an option in the agreement to raise funds Suzuki 40% This has placed in 1987. Five years later, in 1992, Suzuki has also increased its equity to 50% in Maruti turning a nongovernmental organization managed on the model of Japanese management practices.

Maruti has created history by producing in a record time of 13 months. Maruti is Manufacturer's highest volume of cars in Asia, outside Japan and Korea, having produced more than 5 million vehicles in May 2005. Maruti is one automotive companies most successful county, and has made profits every year since its creation until 2000-01. In 2000-01, well Maruti that generated operating profits on an income of Rs 92.5 billion, a sharp depreciation on new model launches resulted an accounting loss.

COMPANY HISTORY AND BACKGROUND

Evolution

Maruti history of evolution can be considered in four phases: two phases during the pre-liberalization (1983-86, 1986-1992) and two phases during the post-liberalization (1992-97, 1997-2002), followed by the full privatization of Maruti in June 2003 with the launch of an initial public offering (IPO). The first phase began when Maruti released its first car in December 1983. During the early years Maruti had 883 employees, a capital of Rs 607 mn and profit of Rs 17 mn without any tax liability. From these humble beginnings the company only ten years (beginning of the second phase in 1992) was transformed into a giant auto capture about 80% of market share in India. Employees increased to 2000 (end of the first phase of 1986), 3900 (end of the second phase 1992) and 5700 in 1999. Earnings after tax increased from Rs 18.67 mn in 1984 to Rs 6854.54 mn in 1998, but began to decrease during the period 1997-2001.

During the period pre-liberalization (1983-1992) an important source of strength 's Maruti was the sincere desire of the Government of India to subscribe to Suzuki technology and the principles and practices of Japanese management. Many Indian leaders, supervisors and workers are routinely sent to the Suzuki factory in Japan for training. Maruti came more Japanese staff to train, supervise and manage. Maruti style of management units was mainly to follow the management practices in Japan.

Path to success for the Maruti was as follows:

(A) the teamwork and the recognition that growth future of each employee and prosperity is totally dependent on the company's growth and prosperity (b) the discipline of rigorous working for individuals and the organization (c) continuing efforts to increase the productivity of labor and capital (d) the continuous improvement of quality and cost reduction (e) customer orientation (f) long-term goals and policies with the confidence to achieve the objectives (g) compliance law, ethics and human beings. The path "successful" translated into practices that Maruti the Culture approximation of Japanese management practices.

Maruti has adopted the standard to wear a uniform same color and fabric quality for all its employees which gives an identity. All employees were eating in the same canteen. They buy on the bus without discrimination seat arrangements. The employees stated at the beginning of changes so that there was no loss of time between two quarters, work. Participation convergence around 94-95%. The plant system of open office and practice on the job training, quality circles, activities kaizen, teamwork and job rotation. almost total transparency was introduced into the decision making process. There was a layer of standards, principles and procedures for decision-making group. These practices were unknown in other Indian organizations, but they worked well in Maruti. During the period before liberalization has focused solely on production. Employees were rewarded generously with bonus increases as Maruti produces more and has sold more than a market vendor in command of an almost monopolistic.

INDUSTRY ANALYSIS

FOUR WHEELER INDUSTRY GLOBAL

Evolution

The automotive industry has undergone significant changes since Henry Ford introduced the technique of assembly line for mass production of cars. production concepts, processes and associated technologies have evolved considerably since the first cars were built. There are 70 years, auto assembly was mainly manual work. Today, the automobile assembly process is almost entirely automated. In the past, companies attach importance to the production of an almost all in a single plant, but today, car manufacturers focus on only a few steps specific production (assembly of cars for example). Parts and module production, services and related activities were transferred to other specialist firms (outsourcing of production stages). Since the 1980s, it became clear that further gains in productivity to maintain competitiveness may be possible through outsourcing and ensure greater flexibility. For example, companies, especially producers of small cars whose markets were threatened by imports have diversified their programs production (eg by building off-road vehicles or convertible), thereby introducing greater flexibility in the production process. In addition, companies and their production have become more internationalized in lieu of outsourcing.

Current Scenario

The world passenger car industry has been facing the problem of excess capacity for some time now. For 2002, the overall capacity of the automotive industry was 75 million units per year, against production of only 56 million units (capacity surplus estimated at 25%). Efforts to support the capacity utilization has prompted competition on prices, thus affecting the margins and forcing Fundamental changes in the industry. The pressure on sales and margins is driving players to emerging markets in pursuit of better opportunities Growth and / or access to databases of low-cost manufacturing.

• The concept of sale in the passenger car industry is the evolution of the initial sale to the value creation life cycle, including funding, repairs and maintenance, cleaning, supply of accessories and so on.

• Vehicle manufacturers are moving to new materials and technologies, partly driven by environmental legislation seeking to find products radically different. Some of these new technologies involve parts that can be bolted on an existing vehicle with relatively few implications for the rest of the vehicle. Others are much more fundamental, and are likely to impact deep throughout the supply chain. Examples include batteries, electric trains or electric hybrids, and alternatives to the body All steel. Car manufacturers are increasingly outsourcing the production of components, and focusing on product design, brand management and consumer Contrary to the traditional emphasis on manufacturing and engineering.

• The need to increase to reach scale World emphasizes the importance of sharing the platform with the automakers. All original equipment manufacturers (OEMs) seeking to reduce the number of vehicle platforms, but increase the number of models produced from each platform. This means that the production of a number of appearance Separate models from a common platform.

• As in the manufacture, distribution in the automotive industry undergoes significant changes, involving the use of Internet consolidation of retailers, and the separation of services provided by retailers.

FOUR WHEELER OF INDIAN INDUSTRY

Evolution

The Indian automotive industry developed in the broader context of import substitution during the 1950s. The distinctive feature of the industry car in India was that, under the overall policy of state intervention in the economy, the production of vehicles is closely regulated by a system of industrial licensing until the early 1980s that controlled production, models and prices. The cars were built primarily by two companies, Premier Automobiles Limited and HM. However, the Indian market has turned after 1983 following the relaxation of licensing policy and the entry of MUL in the car market. In 1991, import car were insignificant, while imports were equivalent to 20% component of national production, mainly due to imports continues to pieces by MUL. The liberalization of the Indian automotive industry that began in the early 1990s has been directed to dismantle the system of controls on investment and production, rather than promote foreign trade. Multinational companies have been allowed to invest in the assembly sector for the first time, and the production of cars is no longer limited by the licensing system. But quantitative restrictions on vehicles built up and remained foreign assemblers were required to meet local content requirements, so well as export targets have been agreed with the government to maintain the neutrality of exchange. The new policy regime and high demand potential leads to the influx of foreign direct investment (FDI) by the mid-1990s. At the end of 1997, Daewoo, Ford India, GM, DaimlerChrysler and Peugeot began assembly operations in India. They were followed by Honda, HMIL, and Mitsubishi.

Scenario current

Major Players

Bajaj Tempo Limited, India Private Limited, DaimlerChrysler, Fiat India Private Limited Automobile, Ford India Limited, General Motors India Limited, Hindustan Motors Limited, Honda Siel Cars India Limited, Hyundai Motor India Limited, Mahindra & Mahindra Limited, Maruti Udyog Limited, Skoda Auto India Limited, Tata Motors Limited, Toyota Kirloskar Motors Limited.

Current Scenario cars Category

The basis of competition prevailing in the Indian passenger car has changed price for money, especially in the segment of passenger cars. While the Indian market is price sensitive, the influence of economic models has been released, leaving room for more expensive products that better meet customer needs. In addition, a dominant trend in the passenger car segment India is the increasing fragmentation of the market sub-segments, reflecting the increasing sophistication of the Indian consumer. With the launch of new models From the year 2000, the market has been redefined MUVs in India, especially at the high end. Currently, the MUVs upscale, commonly known as Sport Utility Vehicles (SUVs), occupy a niche in the urban market, having managed to shake the tag of commercial vehicles attached to all MUVs until recently. Domestic automakers are now venturing into areas such as car financing, leasing and fleet management, and reconditioning of used cars / sales, in addition to their central-business sales of new cars.

COMPETITION FORCES IN INDIAN car market

Critical issues and future trends

The critical problem facing the industry in India passenger car achieving profitability volumes. This is related to the amount of investments by the actors in capacity building and the sale price of car. The amount of investment in capacity by manufacturers of cars in turn, depends on the production

Threat of new actors: Increase

· Most major global players are present in the Indian market and some others are expected to enter.

· The financial strength is higher importance are needed for capacity building and maintaining the adequacy of working capital.

Access to the distribution network is important.

Lower tariffs in the WTO after the Indian companies can expose the threat imports.

Competition in the industry: High

• There is an intense competition in segments selected. (Compact and mid-sized segments).

· New multinational players can enter the market.

market power of suppliers: Low

Many auto parts suppliers.

Automotive Players are rationalizing their supplier base to ensure consistency in quality.

market power of consumers increase

· Increased awareness has increased consumer expectations. Thus, the ability to innovate is crucial.

· The differentiation of products through new features, improved performance and after sales support is essential.

· Increase the intensity of competition has limited the pricing power of manufacturers.

Threat of substitutes: Low to Medium

With changing consumer preferences, the substitution of intermediate products takes place (mini cars are replaced by compact cars or medium). Establishment of integrated manufacturing facilities may require investment capital more than the establishment of assembly facilities for semi overturned or reversed kits complete kits. Recent years, although the ratio of sales of capacity (an important indicator of the ability to reach volumes of profitability) of domestic auto have improved, it is still low for a good few car manufacturers in India. India is also likely to increasingly serve as a supply base for global companies in the automotive, and automobile exports are likely to gain increasing importance over the medium term. But growth rates are likely to vary in segments. Although the mini segment is expected to support volumes, it is likely to continue to lose market share, growth in the medium term should be largely under the Covenant and midrange segments. In addition, in terms of capacity, the passenger market in India car moving towards higher capacity cars. This apart, the competition may intensify in the SUV segment in India following the launch of new models at competitive prices.

Competitor Analysis

HYUNDAI Motor India Limited

Hyundai Motor India Limited (HMIL) is a wholly owned subsidiary of Hyundai Motor Company, South Korea and is the second largest car manufacturer and the fastest growth in India. HMIL currently markets over 25 variants of passenger cars in six segments. The Santro in the segment B, Getz in the B + segment.

HYUNDAI SANTRO

We will focus mainly on marketing and various positioning strategies of Hyundai Santro Maruti Zen that cons and Alto and Hyundai Getz cons Maruti Swift.

POSITIONING SANTRO

The positioning of the old Santro was that pf a "family car, the positioning strategy has been amended 2002 and around Santro has been repositioned to that of the "intelligent car for young people. The target age group for the car has now increased from 30-35 years to 25-30 years. The relocation followed the face-lift of the car has been done from time to time in the form of upgradation engine, new steering, automatic transmission, etc., to maintain the excitement around her life in the small car market is highly competitive. The repositioning is ahead of the possible launch of a new design Santro, and the super car segment B "Getz" in the course of 2003.

The Santro has received a new position – a "complete family car" car in the sun 'a' designating a new fresh attitude and a "change your life positioning.As, the average age of a car owner has declined from around 30-35 three years ago to 25-30, mainly because of changing lifestyles, cheap and readily available finance, etc. The Company believes that, instead of promoting the Santro as a family car, it should be encouraged as a car that can change the life of a young person since most buyers were young buyers.

Hyundai Pricing Strategy

With Maruti Swift launched recently a price war would kick. Immediately after Maruti raised prices on its fledgling Hyundai Motor hit India back with a Rs 16.000 to 19.000 markdown on three new variants of Santro Xing.

The company has introduced the XK and XL variants at a lower tag of Rs 3,26,999 and Rs .3,45,999 respectively.The new price variations are likely to give Maruti models existing B-segment, Zen and WagonR a race to money. Hyundai has also launched a new variant of the non-AC Santro at Rs 2.79 lakh, a tad higher than the existing non-Ab Santro costs. The next attack is caused by Maruti. With the new price positioning Santro, Zen and WagonR in particular may be due to a correction, or at least a grant of limited duration. If this happens will be a domino effect across the B-segment.

Hyundai is positioning its new variants on the platform technology. Attached to 1.1 liter engine eRLX Active Intelligence technology, the new variants also come with a new color-coordinated decor, a new grille and a 4-speed AC blower that makes air conditioning more efficient.

TATA MOTORS

Established in 1945, Tata Motors is India's largest and only fully integrated automobile company. Auntie Motors began manufacturing commercial vehicles in 1954 with a collaboration agreement with Daimler Benz 15 years in Germany.

Auntie Indica – Tata motors flagship brand

The passenger transport company car range includes the sedan, the Indigo sedan and Indica Marina station wagon variant, in petrol and diesel versions.The Tata Indica, India's first native designed and manufactured car, was launched Tata Motors in 1999 as part of its ongoing efforts to provide transportation solutions in India that have been designed for Indian conditions. Currently, passenger cars of the company and multi-utility vehicles for a 16-percent of the market.

POSITIONING OF INDICA

Tata Indica positioned as "more car per car. The new car offers more space, more style, more power and more options. Emphasizing the provision of world class quality. They have tried to redefine the small car market as this has been included in India.True his "car more per car" positioning, Indica CNG offers all the basic advantages of the combined indica with the advantage of CNG. One of the most popular commercials on television today is one where the guy billed as the "liar adorable" to hit each time it is, but not when he speaks of the Indica, which means "must be true." The development of the campaign the new ad was launched with the intention of giving the brand a touch of Indica V2 youth.

PRICE TATA strategy

After the price war triggered by Hyundai is the first company to introduce what became known known, pricing based on customer perceptions of value, all others followed suit.Telco of Indica came within the range of Rs 2.56 lakh to Rs 3.88 lakh 4 models. The price points in the car market have been replaced by price-bands. The width of a price band has been based the size of the target segment and more intense competition. The rule of thumb is "the greater the intensity, the greater the band prices.

BY key strategic initiatives Maruti

A) Turnaround strategies Maruti FOLLOW

Maruti has been the undisputed leader in the commercial motor car segment, control about 84% of the market until 1998. With increasing competition from local players such as Telco, Hindustan Motors, Mahindra & Mahindra and foreign players like Daewoo, PAL, Toyota, Ford, Mitsubishi, GM, the structure of the whole car industry in India has changed over the past seven years and has resulted in declining profits and market share of Maruti. At the same time the government India prohibits foreign carmakers to invest in the automotive sector and hold majority stakes.

The remainder of diminishing returns and loss of market share, Maruti launched strategic responses to cope with the liberalization India's process and has begun to revise to meet competition in the Indian market. Companies Advice such as McKinsey and AT Kearney, with internationally renowned OD consultant, Dr. Athreya, were consulted on the strategy and methods development of the organization during the restructuring process. The redesign process saw Maruti fill an R. 4000 expansion min, which increased the total production capacity to over 3,70,000 vehicles per year. Maruti has executed a plan to launch new models for different market segments. In its restructuring plan, Maruti is launching a new model every year, reduce production costs through the implementation of indigenization 85-90% for new models, reorganizing marketing by increasing the dealer network of 150-300 and focus on the sale block institutional reduce number of suppliers and to introduce a tender. With the restructuring plan, it There was a change in business direction of Maruti. When Maruti commanded the largest market share, the emphasis was undertaken to "sell what we produce." The earlier focus of the entire organization was "The production, production and production," but now the emphasis has been placed in "marketing and customer focus". This can be observed changes in mission statement Organization:

1984 "vehicle fuel efficient with the latest technology.

1987: "Leader in the domestic market and be among the actors global market overseas.

1997: "Satisfaction of our customers and shareholders wealth creation.

Focus on customer service has become a key element of Maruti. Increased Maruti service stations the scope of a Maruti service station every 25 miles on a road. To increase its market share, Maruti launched new models of cars, concentrated on marketing and institutional sales. institutional sales, which currently contributes 7-8% of Maruti turnover total. Cost reduction and efficiency of operations have been more than one other variable redesign. Reduction cost is achieved by reaching a level of indigenization of 85-90 percent for all models. This would save foreign exchange and also to stabilize prices that fluctuate with exchange rates. However, the change in mentality has not been as rapid as required by the market. Maruti plans to reduce costs, increase productivity, quality and upgrade its technology (Euro I & II, MPFI). In addition, he followed a high volume production of about 400,000 vehicles per year, which implies a harmonious relationship between workers and managers.

After 1999, the market structure has changed radically. Just before that change, Maruti had lost two years crucial (1996-1998) through to government intervention and negotiation with Suzuki of Japan regarding the collapse of the shareholding structure of society. There was a change Executive, Mr. Sato Suzuki became president in June 1998, and the new Mr.J. Khatter has been appointed new CEO mixed. Khatter was a believer in the decision by consensus and participatory management style. As a result of the internal crisis and changes in the external environment, Maruti faced with a market share of ozone, reducing profits and increasing stock levels, it had not met during the last 18 years.

After the fall of its market share, they have perfected their strategies and through their parent company Suzuki they have learned a learning organization lot.The Maruti has been a mixed success, the cost is relatively inexpensive as Maruti had his strong practice Japanese fall back on. With the program of the organization restructuring, streamlining costs and improving productivity, Maruti has rebounded competition with 50.8% market share and 40% increase in earnings for the year 2002-2003.

B) STRATEGIES current followed by MUL

I. PRICE STRATEGY – CATERING all segments

Maruti caters to all segments and has a range of products at all price levels. He has a car at a price of Rs.1, 87,000.00 which is the lowest offer on road. Maruti with 70% of companies that repeat buyers earlier had owned a Maruti car. Their pricing strategy is to provide an option for each client seeking a gradation in his car. Their only reason to have so many product offerings is to be in consideration set of all customers of passenger cars in India. Here's how all the money is covered.

II. Shop offering stop shop for customers or sources of income CREATION

Maruti has successfully developed various sources of income without huge investments in the form of MDS, N2N, Maruti Insurance and Maruti Finance. These help take the hassle free customer experience and helps build satisfaction customer.

Maruti Finance: In a market where over 80% of cars are financed, Maruti has entered into strategic this and managed to create a source of income for Maruti. It has been found to be an important factor in the conversion of a Maruti car sales in some cases. Finance is an important decision drivers in the car purchase. Maruti has tied up with eight finance companies to form a consortium. This consortium comprises Citicorp Maruti, Maruti Countrywide, ICICI Bank, HDFC Bank, Kotak Mahindra, Sundaram Finance, Bank of Punjab and IndusInd Bank Ltd. (formerly Ashok Leyland Finance).

Maruti Insurance: Insurance to be a major concern for owners Car. Maruti has made all car insurance needs under one roof. Maruti has tied with the National Insurance Company, Bajaj Allianz, New India Assurance and Royal Sundaram provide this service for its customers. The identification of the coverage of car most suitable for virtually trouble-free claim assistance it your dealer who takes care of everything. Maruti Insurance is a hassle-free way for customers to have their vehicles repaired and claims processed any shop in India Maruti Dealer.

True Value – Initiative capture used car market

Another significant development is the entry of MUL in used cars market in 2001, enabling customers to bring their vehicle a "jack of Maruti True Value and exchange it against a new car, paying the difference. They are available in fidelity discounts return.This helps to retain the customer. With Maruti True Value customer has a trusted name to confer in a highly organized and where cheating is widespread and the greatest concern in the greatest driver of sales is trust. Maruti knows its strength in the Indian market and has filled this gap in the provision of trust in the Indian used car market. Maruti has created a system where dealers pick up cars used, refurbished, giving them a warranty costs, and sell them. All investments are made by True Value dealers. Maruti has set up a strong network of 172 dealers across the country. The used car market has huge potential in India. The used car market in developed markets was 2-3 times larger than the new car market.

N2N: car maintenance is a costly time, especially if you own a fleet. Maruti N2N Fleet Management of Business Solutions, takes care of the AZ of automotive problems. Services Backups include end to end solutions across the vehicle life: rent, maintenance, local services and remarketing.

Maruti Driving School (MDS): Maruti has established with the aim of conquering the market where it is inhibition of the purchase of cars because of their inability to drive the car. This brings to the customer to the showroom and Maruti Maruti eventually create a customer.

III. Repositioning Maruti PRODUCTS

Each time a brand has aged or sales begin to dip a few facelifts in Maruti models. Other changes have been made from time to time on the market reactions or feedbacks consumer or competitor moves. The changes observed in some different models of Maruti.

Omni has received a major facelift in terms of domestic external and two months back. A new variant called Omni Cargo, which has been positioned as a vehicle for transporting goods and designed for small traders. He received a very good market response. A variant of the GPL is to receive a reply very good customers who seek to low operating cost.

Versa prices have been reduced and now the lowest starts at 3.3 variant lakes. This diminished the power of the 1600cc to 1300cc engine and modified again consider the perception of consumers. This was the result of the investigation intensive done all across the country regarding the perception of consumers Versa.

Esteem had three facelifts. New Looking at last year helped boost sales declining esteem.

Baleno was launched 1999 to 7.2 in lakes. In 2002, they slashed prices to 6.4 lakes. In 2003, they launched a version lower than Baleno LXi 5.46 lakes. This was reduce prices and attract customers.

Wagon-R has been perceived as dull boxy car when it was launched. This has a big launch failure. Second, other changes in the engine for increased performance and a facelift in the form of grids giving sports on the roof. Now it is the most successful models in Maruti stable.

Zen has been amended four times date. They came with a variant called Classic period ended Zen. This limited time offer to boost sales in the short term.

Maruti 800 has so far been facelifted twice. Once he came with MPFI technology and other time he came with changes in the front grille, headlights, taillights and round with curves all around.

IV. APPROACH Customer Centric

Maruti customer orientation is well illustrated by the time five consecutive victories at JD Power CSI. Focus on customer satisfaction is what who lives with Maruti. Maruti has managed to throw off the casual public image and attitude instilled customer-friendly approach in its organizational culture. The attitude of listening to the customer is drawn from its employees. Maruti dealers and employees are accountable to even one customer complaint. There are cases of cancellation of concessions based on customer feedback.

Maruti has taken a number of initiatives to serve customers too. They even changed their layout showroom so that the customer must walk a minimum in the showroom and there are standards for the time of service and delivery vehicles. Dealer Sales Executive, which is the average first interaction with the customer when the customer walks in the Maruti showroom Maruti is formed on the labels of wishes. Maruti has a good customer complain handling of cells in the CRM department. The call center is another Maruti Maruti effort that brings more to his client. Their market research service is on the lookout for studying consumer behavior changes and needs.Maruti market has seventy percent of repeat buyers which reinforces their claim to be friendly. Maruti is investing a lot of money and effort in building loyalty programs to customers.

V. COMMITTED At engine INDIA

Maruti is committed to power the India. Maruti is now working to make things simple for consumers Indian upgrade of two-wheeled car. To this end, partnerships with Maruti State Bank of India and its associate banks organized finance small cities to allow people to buy Maruti cars. R. 2599 plan was an outcome of this effort.

Maruti expects that compact cars, which currently constitute about 80% of the market to be the engine of growth in the future. Economic Growth Rugged, supportive regulatory framework, finance affordable and improving infrastructure for the growth of passenger vehicles segment. Low penetration levels to 7 per thousand and rising incomes will bode well for the automotive industry.

Maruti is busy refining another innovation. Although some research they found that rural people had strange ideas about a car – the EMI (Equated monthly installments) would range between Rs 4,000 and Rs 5,000. That, plus another Rs 1500-2000 for the monthly maintenance, another Rs 1,000 for fuel (the cost would use of the car). To counter this apprehension, the company is working on a new idea. The control of the fuel bill is in the hands consumer. However, maintenance should not be. Khattar said: "What the company now is how much you spend on the Fuel is in your hands anyway. Regarding the cost of maintenance is concerned, if you want that way, we charge a little extra in the EMI and maintenance Free. "

VI. Divestment and IPO of Maruti Udyog Limited

It was a long and difficult journey, but a reward at the end. A reward worth Rs 2,424 crore, making it the largest privatization in India to date. The size of Maruti sell-off deal is proof of its success. On investment of Rs 66 crore it made in 1982 when Maruti Udyog Limited (MUL) has been formally established, the sale represents a return staggering 35 times the best part of the agreement is the control premium Rs 1,000 crore government was able to extract from Suzuki Motor Corporation to abandon its hold on society of India's largest car. You see now developed the strategy of it – for Suzuki, of course, complete control of Mul means a lot. Maruti is the most profitable and largest car company outside of Japan. Suzuki is now in the driver's seat and will not mind the whims of ministers and bureaucrats. "Decisions will now be faster. The response to changing market conditions and technological needs will be faster, "says Jagdish Khattar, Managing Director, MUL. After the divestment Suzuki became the decision maker to MUL. They poured money into India for the major reorganization of MUL. Citing the report that appeared in The Economic Times, April 4, 2005 –

The Indian auto giant Maruti Udyog Limited has completed its two mega investment plans – a car factory and a new engine manufacturing plant and transmission. Both projects will be implemented by two different companies. At its board meeting the company has approved a total investment of Rs3, 271.9 crore for these two companies, which will be located in Haryana.

The mean above when IGE has been a major player in MUL strategies that lead to investment have been a factor in the bureaucracy but after the divestment strategy followed is a top down approach with a rapid implementation.

Suzuki project installation two-wheelers in India, would start making motorcycles and scooters by the end of 2005 by a joint venture, in which Maruti has 51 per cent. Unit two-wheelers have a capacity of 250,000 units per year.

The divestment followed IPO provides insight into now that all strategic decisions are taken by Maruti Suzuki Corporation. Disinvestment had helped by removing the red tape and bureaucracy factor in the process of strategic decision making.

VII. MAKING SERVICES Importance of maintaining market Vehicle

In the old days, the company's operations could be reduced to a simple three-box chart. Components came from vendors at the "factory" where they were assembled and then sent to the "dealers". In this scheme, you know that revenue from the original company. The new scheme is more complex. It is based on the total value of the lifetime of a car.

Work on this began in 1999 when a team MUL, wondering about new revenues, traveled around the world. Says SR Kalsi, managing director (new business), MUL: "While car companies are moving from products to services, trying to capture more the total lifetime value of a car, MUL was just making and selling cars. "If the buyer passes of Rs 100 for a car throughout its life, one third of which is devoted to the purchase. Another third went to fuel. And the final third was in maintenance. Earlier, Maruti became only the first third the global flow. As the Indian market matured, customers have begun to change cars faster. Kalsi Says: "So, the question was, if a car is to go to three users, say, a lifetime of 10 years, how can I ensure that I return whenever changes hands? While Maruti has changed gears to take a large share of this last third devoted to maintenance. maintenance market has a potential market enormous. Even after fifty vehicles on the road lakh Maruti is only the restoration of approximately 20,000 vehicles across all its service stations day.

For this, they conduct workshops free service to encourage consumers to come to their stations. Maruti has increased its authorized service stations in 1567 to over 1036 cities. Each regional office has a separate service and maintenance department dealing with growth This source of income.

VIII. Playing on cost control

Maruti dictator is the price the Indian automotive industry. This is the low cost supplier of the car. The lowest car on the road is Maruti stable ie Maruti 800. Maruti achieves this through continuous improvement in the operational efficiency and productivity.

The company has set himself (and suppliers) the goal of a 50% improvement in productivity and a reduction 30% of costs in three years. The ability to keep lowering prices fixed by Maruti other players in the league. Maruti overheads on a more wide.

The impressive sales and profits were the result of significant efforts in the enterprise. Maruti also increased emphasis on vendor management. Maruti has consolidated its supplier base. This has provided suppliers with higher volumes and higher efficiency. Maruti does this by working with suppliers, ensuring that for each lower prices, volumes will increase. Maruti is now encourage its suppliers to develop capabilities in R & D for specialized components. Based on these activities, the competitiveness of products market will continue to grow.

Maruti has also made progress in its application to manufacturing. A new tracking system Vehicle efficiency improvements in the workshop and quality control improved. The e Nagare adopted Suzuki Motor Corporation, smoothed Maruti Just In Time operations.

C) the major strategies FUTURE

I. PHASE OUT ZEN IN 2007

The launch of Swift and the phasing Zen is a strategic move. Viola has been launched keeping in mind that it will take more than Maruti 800 to market in future. Perhaps the flagship of phasing Maruti 800 lots of resistance to dealers everywhere. Another reason behind not phasing out Maruti 800 was the fear of the mark crossing customers competing products of others. Swift was launched in May 2005 in the price range from four lakes. Before the launch of Maruti Swift management had decided Zen as they phase it had already found two changes. The main reason behind this decision was cannibalization of Wagon R and Swift due to overlapping of price ranges. It is a rational decision to kill a product before it begins opposite the stage down product cycle. Maruti offers Rs 3000.00 dealer margins on the sale of Wagon-R compared to Zen. It is allowed to grow dealer Wagon R instead of Zen.

II. Maruti plans for a FORAY BIG DIESEL

The manufacturing company of new cars, called Maruti Suzuki Automobile India Limited, is a joint venture between Maruti Udyog and Suzuki Motor Corporation holds a 70 per cent and 30 per cent stake respectively. Rs1, 524.2 crore plant will an ability to deploy a lakh cars per year with capacity to scale up to 2.5 lakh units per year. The new manufacturing begin commercial production by the end of 2006.

Maruti would set up a diesel engine plant in Gurgaon in line with its plan to become a major player in the diesel vehicles in a couple of years. This was done in the wake of major competition from Tata Indica and meets the growing demand for diesel cars in India. Although the annual growth in the diesel segment was 13 per cent over the last three years, it was 19-20 percent in the first quarter (April-June) of the current year. Maruti currently has an insignificant presence in the diesel vehicle. Needless manufacture the new generation CRDI (common rail direct injection) engines in collaboration with Fiat-GM Opel and engines will be 1200 cc. The plant capacity to produce a diesel lakh should be operational in 2006. Currently, Peugeot of France, provides diesel engines for models from Maruti Zen and Esteem medium enterprises. This will also reduce the import component in Maruti vehicles, making them more competitive in the ocean Indian market.

III. Maruti plans for a new engine and transmission plant

The engine and transmission plant will be owned by Suzuki Powertrain India Limited in which Suzuki Motor Corporation will hold 51 per cent stake in Maruti Udyog and holding balance. The ultimate capacity of plant would be three lakh diesel engines. However, initial production will be 1 lakh diesel engines, gasoline engines and 1.4 20,000 transmission assemblies lakh. Investment in this facility will be Rs.1, 747.7 crore. Commercial production will begin in late 2006.

IV. As an export hub of India Maruti FOR

Three years ago as an experiment, on the basis of capacity design more suppliers in countries like India, McKinsey did an exercise to determine how much money could be saved if Motor should be made in foreign locations such as India, Mexico and South Africa – a BPO car, so to speak. The result was staggering: the industry stands to gain $ 150 billion per year cost savings, and an additional $ 170 billion dollars annually in new revenue as soon as demand soars after the fall of prices, and the combination of which means an increase of 25 per cent in force levels income.

According to the study, more than 90 percent of cars sold today are in countries where they are made, so there is a lot of money by moving production abroad. Until recently, only 100,000 cars produced in low cost countries have been exported to more expensive – probably this figure is increasing now that Maruti Altos, Santros Hyundai Indica, Tata Motors, Ford and Ikons of, among others, are regularly exported from India.

But as McKinsey points out, because it only costs $ 500 and three weeks (and these two figures are down) to ship a car anywhere in the world, why produce cars in high-wage islands? If a car has been produced in India, instead of Japan, according to the study, it will cost you 22 to 23 percent lower, after taking account of higher import duties for components / steel, lower levels of automation, and cost transport.

In August 2003 Maruti has taken a step in the export of 300,000 vehicles since its first export in 1986. Europe is the main export destination for Maruti and by chance after the first commercial shipment of 480 units in Hungary in 1987, the mark has been crossed 300.00 by sending 571 units in the same country. The main destination of exports were ten cumulative Netherlands, Italy, Germany, Chile, United Kingdom, Hungary, Nepal, Greece, France and Poland in that order.

The Alto, which meets Euro-3, has been very People in Europe, where a landmark 200,000 vehicles were exported until March 2003. Even in highly developed markets competitive and the Netherlands, United Kingdom, Germany, France and Italy have made a Maruti vehicle brand. Although the main market for vehicles Maruti is Europe, where it sells more than 70% of the quantity exported, it exports to over 70 countries.

Maruti has contracts unconventional, such as Angola, Benin, Djibouti, Ethiopia, Morocco, Uganda, Chile, Costa Rica and El Salvador. The Middle East has also opened and shows good growth potential. Some markets in this region where Maruti is, are Saudi Arabia, Kuwait, Bahrain, Qatar and United Arab Emirates.

Markets outside Europe that have large amounts in the current year are Algeria, Saudi Arabia, Sri Lanka and Bangladesh. Maruti has exported over 51,000 vehicles in 2003-04 which was 59% higher than last year. In FY 2003-04 Maruti exports has contributed to over 10% of total turnover of Maruti.

Maruti V. NEW R & D that the HUB SUZUKI MOTOR CORPORATION

Japanese auto major Suzuki is ready to transform research Maruti Udyog Ltd. and development (R & D) facility as a hub in Asia by 2007 for the design and development of new compact cars, according to a senior company official. The leading car manufacturer in the country will make substantial investments to upgrade its research and development center Gurgaon in Haryana for implementation of projects for design and development for Suzuki. This includes the location, modernization and greater use of composite technologies in upcoming models.

The company is hiring software engineers and technocrats to manage the R & D projects Suzuki. On the investment would be more in terms of manpower in the infrastructure, which is already up. In addition to working on innovative features, teams R & D will focus on the latest technologies using CAD / CAM tools for rolling new models that meet the needs of diverse customers MUL in the future.

The reasons why it may be good for R & D is that

Ø First of all expenses incurred in R & D and infrastructure in India is low compared to other countries. In addition to technical skills are available in abundance, again at a lower cost.

Ø Second, India is increasingly becoming a center for export with the Indian market more aggressively to become attractive to investors.

Ø Thirdly, investment in India by Suzuki, is also important because it has completely sold now as a result will become MUL a 100% subsidiary Suzuki next year.

KEY FACTORS FOR SUCCESS

(1) The Quality Advantage

Maruti Suzuki owners experience fewer problems with their vehicles than any other other car manufacturer in India (JD Power IQS Study 2004). Alto No. 1 was chosen in the premium compact car segment and the estimated in the entry level mid – size car segment between 9 parameters.

(2) a shopping experience like no other

Maruti Suzuki has a network of sales showrooms in the state of the art-307 through 189 cities, with a workforce of over 6,000 vendors trained to guide clients in MUL find the car right.

(3) Quality Service through 1036 cities

In the study by JD Power CSI 2004, Maruti Suzuki scored the highest in all seven parameters: at least the problems with vehicle maintenance, the highest quality of service, the best service experience, the best service, better service advisor experience, the most friendly service and the best service initiation experience.

92% of owners of Suzuki Maruti feel that the work is done right the first time during the service. The JD Power CSI 2004 study also reveals that 97% of owners of Suzuki Maruti will probably recommend the same brand of vehicle, while the owners of 90% would probably buy the same brand of vehicle.

(4) A stop

At Maruti Suzuki, guests will find all related car must meet under one roof. Whether it easy finance, insurance, fleet management, foreign exchange, Maruti Suzuki is to provide one-stop solution for all car-related needs.

(5) Advantage Low maintenance costs

The acquisition cost is unfortunately not the only cost of customers to purchase a car. Even if a car can be affordable to purchase, it may not necessarily be affordable to support them, as some of his regular use of spare parts can be quite high prices. But not in the case of Maruti Suzuki. This is in the segment of the economy and the affordability of spare parts the most competitive, and that is where Maruti Suzuki shines.

(6 below) Cost of Ownership

Satisfaction ratings highest in regard to the cost of ownership among all the models are all vehicles Maruti Suzuki Zen, Wagon R, esteem, Maruti 800, Alto and Omni.

(7) advantage Technology

He established the upper 16 * 4 engines Hypertech full range Suzuki Maruti. This technology harnesses the power an intelligent computer 16-bit to an efficient motor with 4 valves create optimal engine delivery. This means that each owner of Maruti Suzuki gets the ideal combination of power and performance of his car.

Challenges ahead

Ø Maruti has always been identified as a car manufacturer to produce cars and traditional resources currently the biggest obstacle Maruti is facing is to put this image. Maruti wants to change to a more aggressive image. Maruti Baleno failed due to a major reason being that customers could not identify with a Maruti car as sophisticated as Maruti Baleno. Maruti is looking forward to about a change of perception the company and its cars. Maruti started the year with the new-look Zen, and Suzuki's decision to choose India as one of the first markets for this car radically different-looking company that gave a new impetus. Maruti has also changed its logo to the front grille. He replaced Maruti traditional logo on the grill 'Stylish' M 'S'. The major thrust in the effort is facelift with the launch of 1.3 liters Swift. It is a style statement from the Indian market Maruti.

Ø The next threat is Maruti is facing competition growing in compact cars. Companies like Toyota, Ford, Honda and Fiat are planning to go out with the small car segment future.Ford Focus and Fiesta launches near GM launches Aveo in 2006, Chevrolet Spark launch in 2006, Hyundai introduces new compact car in 2006, Honda launched Jazz in 2006, GM has reduced the price of his Corsa, Fiat Panda and comes with new Fiat Palio, Skoda Fabia launches. All this poses a major threat to Maruti's leadership in the compact car.

Ø emission standards as new Bharat Stage 3, which came into force from April 2005 has increased car prices by Rs.20000 and Bharat Stage 4, which came into force in 2007 will help to further increase car prices. This could be a concern Maruti is the low cost supplier of passenger cars.

Ø Rising gasoline prices and the popularity increasing other alternative fuels such as CNG is another threat to Maruti. There is also a threat to the Suzuki R & D investment Toyota and Honda in hybrid cars. Hybrid cars could run both gasoline and gaseous fuels.

Ø is a threat to Maruti models aging. Maruti models like Maruti 800, which is on the market during the last twenty years and others like Zen and esteem which also entered the phase of decline are other threats. Maruti provides for the elimination Progressive Zen in 2007 and there were rumors of elimination of Maruti 800 too. This makes Suzuki to replace these brands with new launches. As Swift and Wagon R replace Zen market. Maruti will continue to make changes in its present model or models will be threatened with extinction.

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