SECTION – I

THE INDIAN AUTOMOBILE INDUSTRY

SPEEDING INTO THE FUTURE :

Peter Drucker called the automobile industry as" The industry of industries".

66
During the last few years, the production and management systems
have been revolutionized in the automobile industry (Karmokolias , 1990).
One of the major changes in the industry has been the opening up
and growth of several emerging markets. India is
one of the most important emerging car economies
in the world today.

In 1991, the Government of India embarked onan ambitious structural adjustment

programme aimed at economic liberalization, based on the pillars of De licensing ,
Decontrol, Deregulation and Devaluation. Post-liberalization, the Government of
India's new automobile policy announced in June 1993 contained measures, such as de
licensing , automatic approval for foreign holding of 51% in Indian companies,
abolition of phased manufacturing programme, reduction of excise duty to 40% and
import duties of CKD to 50% and The number of new entrants and the level of
investment within a very narrow time window of two to three years is unprecedented
and seems unique to India. Compared to three major models available in the Indian
market until recently , customers can now choose from a wide variety of products. For
instance, from current sales of around 300,000 passenger cars in 1996-97, sales are
expected to rise to anywhere between 850,000
to 1.7 million vehicles by the year 2000. Automobile companies have announced
plans to instal capacity of around 900,000 vehicles by the
year 2000. The number of cars sold over the next four years is going to be
anywhere between 2 and 3.5 million vehicles.It is not certain how exactly demand
will grow and on what factors it will depend, and whether there is room for so
many players.

INDIAN AUTOMOBILE INDUSTRY :

The Indian automobile industry has four major segments -- commercial vehicles
(CVs), passenger vehicles, three wheelers, and two wheelers. The market share
for each of these segments of the Indian automobile industry, for the year 2003-

66
04,

According to the Society of Indian Automobile Manufacturers (SIAM) , the Indian

passenger vehicle market has three categories -- passenger cars, multi-purpose
vehicles (MPVs), and utility vehicles (UVs).

The passenger car market is further divided into various segments based on the
length of the car.
The Indian automobile industry was a highly protected slow-growth industry with
very few players till the opening up of the Indian economy in 1991. Low
manufacturing costs, availability of skilled labor, an organized component
industry, and the capability to supply in large volumes attracted global auto
majors to set up their operations in India after the opening up of the sector.

For example: Fiat and DaimlerChrysler started outsourcing their component

requirements to India. 100 percent Indian subsidiaries of global players, like
Delphi Automotive Systems and Visteon , exported components to other parts of
the world.

Macroeconomic factors like government regulations, low interest rates, and

availability of retail finance played an important role in the rapid development of
the automobile industry in India during the late nineties.
Since the Indian industry started mass production only in the mid 1980s with the
arrival of Maruti Udyog Limited, the transition to lean production is likely to take
time.
The import duty on car components increased from 40% to 75% during 1984-91
and then came down to 50% recently. Thus duties and taxes continue to be high
by international standards.

These might be brought down in future as the industry becomes more

competitive. The Government of India has reduced its direct control on the
automobile industry following the announcement of the new automobile policy.
Entry of MNCs is permitted, either as joint ventures or on their own. However, the
indirect impact of government policies on the industry still remains far from
insignificant. The government has levied 110% customs duty on completely built
units (CBU) and 50% on CKD and parts.

Indian passenger car market:

 Pre-liberalization

The Indian passenger car market was characterized by Government

protection for a period of over four decades after independence.
Prior to the 1990s, there was little choice for the Indian consumer

66
as there were only a few major automobile manufacturers like
Hindustan Motors, Premier Automobiles, and Maruti Udyog Limited.
Hindustan Motors’ ‘Ambassador’ had ruled the roads for nearly three
decades. The ruggedness, comfort, and spaciousness made the
Ambassador immensely popular.

In 1982, the Government of India (GoI) entered into a joint venture

with Suzuki Motor Corporation (SMC) of Japan. MUL’s plant was
established at Gurgaon in Haryana and it rolled out its first model,
the M-800 on December 14, 1983. It was the most successful model
of MUL and enjoyed a near-monopoly status till the mid-1990s.

 Post-liberalization

Liberalization of the Indian economy in 1991 and de-licensing of

the passenger car industry in 1993 paved way for the entry of
global players like Hyundai, Ford, General Motors, Toyota,
Volkswagen, Daewoo, and Honda.

Hyundai Motors, the Korean giant, entered India with its small car
‘Santro’ in direct competition with MUL’s Zen. Santro’s sales
picked up momentum and the model was a huge success.

Tata Engineering and Locomotive Company (renamed Tata Motors

in 2003), which was primarily engaged in the production of
commercial vehicles and utility vehicles till the mid-1990s, rolled
out its small car “Indica’ in 1998. Indica was well received in the
market and emerged as one of the prime competitors to MUL

66
 Sourcing Auto Components-Destination India

The Indian automotive industry has grown at a staggering pace over

the last few years. The US$ 6.8 billion industry has registered a
CAGR of 17% between 1998-2003 and is projected by ACMA (Auto
Components Manufacturers Association of India) to grow at a 15%
CAGR till fiscal 2012.

The opening up of the sector over the last decade has caught the
attention of global auto majors as the only market rivaling China in
terms of potential market size and growth opportunity. As the
automobile industry has grown and matured, the Indian auto
components industry has also grown tremendously, and is rapidly
achieving global competitiveness both in terms of cost and quality.
Infact, industry observers think that while Indian automobile
market will grow at a measured pace, the auto components industry
is poised for a take-off and is one of the handful of industries where
India has a distinct competitive advantage.

In the 1990s, economic liberalization allowed foreign automakers

such as Hyundai, Ford, Toyota and GM set up base in India. The local
component manufacturers did not have the requisite size,
technology or quality to meet the needs of these international
carmakers. On the other hand, the high import tariffs and price
sensitiveness of the Indian car buyer made it unviable for these
companies to import components from their global suppliers.
Therefore, the carmakers had to persuade their overseas
components suppliers to set up local manufacturing base in India.
For example, Delphi followed after General Motors opened its plant
in the state of Gujarat in 1995 and Visteon followed Ford in 1998.

As these companies developed and stabilized their Indian

operations, they realized the cost advantage of manufacturing
components in India – typically lower by about 30%. They began to
explore the possibility of exporting back these low cost, high quality
components to their global factories and thus reduce their overall
costs.

66
 Automotive Industry: India Strategic Market Profile

Although India has been much discussed in recent years, and has
been the recipient of major foreign investment in its automotive
industry, it has in many ways not received the attention of the
world’s other major developing country, China – but this is about to
change.

With the world’s second largest and fastest-growing population,

there is no denying India’s potential in both economic and
population terms and the effect it will have on the auto industry in
the years to come. The country is already off to a good start, with a
well-developed components industry and a production level of one
million four-wheeled vehicles a year, plus a further five million two-
and three-wheelers. India also has substantial strength in mass
production techniques and is particularly well served in the fields of
research and development and software design. Therefore, as
always, the question is when will expansion occur and to what level?

The implications, market drivers and scope of a future massive

Indian vehicle market are covered in the India Strategic Market
Profile, a brand-new forecast of Indian automotive and related
activity to 2020. Based on Max Pemberton's especially as the
forecast ratio of 44% is still a low value on a global scale and is
open to considerable improvement. unique relational long-term
forecasting model, it forecasts car and CV sales, demographics,
materials usage, auto industry employment, and explains their inter-
relation with detailed analysis

66
 Automotive Industry: India Strategic Market Profile

Sales compared with scrap – 1960 to 2020:

The data for the early years of the Indian market are based
largely on derived information. It is probable that very few vehicles
were scrapped in India during the first thirty years of this analysis
and scrap volumes remain low, although the government is now
committed to the scrapping of older, more polluting vehicles, in line
with its auto policy on clean air. The graph and table show the scrap
to sales ratio, that is the number of vehicles scrapped for every 100
vehicles sold. For most of the period from 1960 to 1990, there was
an estimated scrap to sales ratio average of about 18%. The figures
have fallen back since the Asian economic crisis, other than for
commercial vehicles, which have shown a marked increase as the
government seeks to remove the most polluting vehicles from the
roads of India. At present, about 18 vehicles are scrapped for every
100 sold.
This is forecast to increase to 32.4% by 2010 and to 44% by
2020, or 44 vehicles will be scrapped for every 100 sold. The rate of
climb to this level is steep, but as the average age of vehicles in
India reduces, there is a possibility that an increase in sales volume,
combined with the enforcement of strict environmental regulations,
will cause the ratio to climb even more rapidly .

66
 ASIAN COMPETITIORS OF INDIA

China Automobile Industry (2005-2015)

China has established itself as the third largest automobile market

since 2003 and is increasingly taking up the lead role in world
businesses. The industry witnessed a sales growth by 44.4% year-
on-year, the sales turnover of the Chinese automobile industry being
453.132 billion Yuan. In this context, we has published a market
research report "China Automobile Industry – A Sectoral Analysis
(2005-2015)" which gives an analysis of the automobile market
across China along with statistical figures and strategies for
investors.

Around the world as price of steel declines, auto enterprises are

showing improved profits. It has been envisaged that the first
million cars will roll out from China and then auto factories will be
built in the US. This would call for an investment as much as 3.5
billion Yuan (US $422.9million). There is thus demand for new
financial channels by private enterprises to enter the automobile
industry. On the other hand, the Chinese consumers are demanding
high quality cars so prices must be cut and costs minimized.

The market research report provides a survey of current initiatives

and trials in the Chinese automotive sector. It deals with current
standards and regulatory environment, statistics on demand and
supply of small passenger cars and possibilities of international
venture ship. The market research report gives an insight into the
Chinese car vendors, their alliances, their positions in the world
market and new product developments.

66
Automobile Industry Performance during 2004–05

The Automobile Industry performance in the year 2004-05 showed

encouraging results for all segments of the automobile industry. The
industry registered a growth of around 16% in numbers over the
year 2003-04.

Despite the speculations of slow growth from different quarters

because of unprecedented rise in input prices, the passenger
vehicles posted a growth of 18% in the year 2004-05 over the year
2003–04. SIAM had mentioned in the beginning of the year 2004-05
of a similar growth while announcing the performance figures for
2003-04. Within the passenger vehicle segment, passenger cars and
utility vehicles have grown by 18% and 20% respectively while
MPVs have grown at the rate of over 9%. The commercial vehicle
segment clocked a growth rate of 22%. M&HCV segment has grown
by 23% whereas LCVs grew by over 21%.
Two Wheeler segment as a whole during the year 2004-05 grew by
over 15%. Backed by Government’s initiative on rural roads and
better connectivity with major towns and cities, improved
agricultural performance, upward trend of purchasing power in the
hands of rural people, the two wheeler industry was able to achieve
the record performance of crossing 6 million two wheelers with
exact sales standing at 6,208,860 during the year 2004-05.

Exports :

The performance of the automobile industry in exports is also

encouraging.

Commercial vehicle exports increased to an all time high of touching

30,000 growing at a rate of 72% Passenger vehicle exports grew by
29% to 166,413 units.

The Two Wheelers also crossed three hundred thousand mark for
the first time clocking around 366,724 numbers and recorded a
growth rate of plus 38% over the last year

Automobile Domestic Sales Trends (Number of

Vehicles)

66
Category 2001-02 2002-03 2003-04 2004-05 2005-06 2006-07
Passenger Cars 509088 541491 696153 820179 882208 1076408
Utility Vehicles 104253 113620 146388 176360 194502 220199
MPVs 61775 52087 59555 65033 66366 83091
Total Passenger Vehicles 675116 707198 902096 1061572 1143076 1379698
M&HCVs 89999 115711 161395 198506 207472 275600
LCVs 56672 74971 98719 119924 143569 192282
Total Commercial Vehicles 146671 190682 260114 318430 351041 467882
Three Wheelers 200276 231529 284078 307862 359920 403909
Scooters 908268 825648 886295 922428 909051 940673
Motorcycles 2887194 3647493 4170445 4964753 5810599 6553664
Mopeds 408263 338985 307509 322584 332741 355870
Electrict Two Wheelers - - - - - 7341
Total Two Wheelers 4203725 4812126 5364249 6209765 7052391 7857548
Grand Total 5225788 5941535 6810537 7897629 8906428 10109037

MARKET SHARE OF INDIAN MARKET :

CVs 5
Total Passenger Vehicles 14
Total Two Wheelers 77
Three Wheelers 4

66
GROSS TURNOVER OF INDIAN AUTOMOBILE

INDUSTRY :

Turnover of Automobile Manufacturers :

Year (Rs.In Million)

1999-00 422,933
2000-01 492,024
2001-02 499,136
2002-03 595,184
2003-04 661,769
2004-05 835,851

Turnover of Automobile Industry 1999-00 to 2004-05

66
66
SECTION – II

66
 CASE STUDY

MARUTI UDYOG LIMITED

66
 MARUTI’S PROFILE

 Type Public

 Founded 1981

 Headquarters Gurgaon,Haryana

 Key people Shinzo Nakanishi Chairman

Jagdish Khattar

 Products Maruti Suzuki,

 Revenue $2.5 bilion (2005)

 Employees 3334

 Website http: www.marutiudyog.com

 Industry Automotive

66
 MARUTI

 VISION

“The leader in The Automobile

Industry,
Creating Customer Delight and
Shareholder’s Wealth ; A Pride of
India.”

 CORE VALUES

 Customer Obsession
 Fast, Flexible and First Mover
 Innovation and Creativity
 Networking and Partnership
 Openness and Learning

66
 OBJECTIVES :

Maruti Udyog Ltd was established as

a government company in February
1984 with the following objectives:

 Modernisation of Indian
automobile industry

 Production of Fuel efficient

vehicles to conserve scare
resources

 Production of large number of

motor vehicles which was
necessary for economic growth

66
 The Three Key Objectives of Maruti
Udyog Ltd to be a leader of Indian
Automobile’s
Industry

SECTION- III
66
 INTRODUCTION :
Maruti Udyog Limited is India's largest automobile company. Its
main factory is situated in Gurgaon district, Haryana. The company,
a joint venture with of Government of India with Suzuki of Japan,
has been a success story like no other in the annals of the Indian
automobile industry. The first cars rolled out for sale on 14th
December 1983, (the Company went into production in a record 13
months), marking the beginning of a revolution in the Indian
automobile industry. The Indian car market had stagnated at a
volume of 30,000 or 40,000 cars a year for the decade ending 1983.
In 1993, this figure reached a number of 1,96,820. Maruti's figures
are a different story altogether. Maruti reached a total production of
one million motorcars in March 1994, becoming the first Indian
company to cross this milestone and crossed the two million mark in
1997.

For the year ended 1997-98, Maruti posted a turnover of US$ 2.1
billion and a Profit Before Tax of US$ 244 million. During the year,
Maruti produced over 350,000 vehicles, out of which 26,000 were
exported. Maruti has made profits in every single year since
nception, and has been paying dividends for ten years. For the year
ended 1997-98, Maruti posted a turnover of US$ 2.1 billion and a
Profit Before Tax of US$ 244 million. During the year, Maruti
produced over 350,000 vehicles, out of which 26,000 were exported.
Maruti has made profits in every single year since inception, and has
been paying dividends for ten years. Through the years Maruti has

66
provided world-class Japanese technology, suitably adapted to
Indian conditions and Indian car users. Maruti's market share figures
show the response of customers: In 1997-98, its market share of
vehicles was over 70%. In addition to leading in the economy car
segment, Maruti is also the leader in the luxury car segment with a
market share of 38%.Maruti also sells the Grand Vitara, Sports Utility
Vehicle (SUV) in India.

The success of the joint venture led Suzuki to increase its equity
from 26% to 40% in 1987, and further to 50% in 1992. As a result,
Maruti changed from being a government company to a non-
government company. With the introduction of economic
liberalization from July 1991, the government realized the high
growth potential of the passenger car market. It took note of the
contribution of this segment in promoting employment, technological
up gradation of industry and contribution to government revenues.
Policy changes took place accordingly. Maruti's excellent
performance in the post-liberalization milieu is in keeping with the
earlier trend set by it. As a result, the transfer of technology from
Suzuki has been a smooth process. By February 1990, a local content
of above 90% was reached for the Maruti 800.

MARUTI’S DIESEL CAR’S :

The engines for its diesel variants were imported other countries,
and there were limits on the quantities it could import. In the
market, MUL’s models like the Zen, Alto, WagonR, and Baleno were
showing While Zen, Alto and WagonR were successful, Baleno failed
to live up to MUL’s expectations. Its utility vehicle ‘Versa’ met with a
disastrous response from the Indian consumer.

In addition, rising incomes, the growth in the used-car market, and

availability of easier finance options, led customers to shift their
allegiance to other models from competitors.

To reduce its excessive dependence on a single model (M-800), the

company had restructured the strategy for the M-800, and planned
for product upgrades and new product development.

In tune with changing customer preferences, the company launched

its hatch-back model, ‘Swift’ in May 2005, to compete with Hyundai
Getz and Fiat Palio. MUL hoped this model would help the company

66
shed its low-cost and simple look.

The move expressed the company’s intent to move up the value

pyramid (by upgrading Alto-WagonR-Santro customers to the new
model) while simultaneously increasing market penetration at the
bottom of the value pyramid by making the
the M-800 more affordable.

Maruti Udyog Limited’s (MUL) share of the Indian passenger vehicle

market dropped to below 50% in 2004-05 .Indian passenger vehicle
industry and MUL between April 2003 and March 2005). The future
of MUL’s low-cost model - the Maruti 800 (M-800) - was at stake due
to the entry of global automakers into India. M-800 had dominated
the Indian car market since it was launched in 1984. The
introduction of new cars by competitors made the M-800 look
obsolete as it had not been changed in any major way for over two
decades.Apart from the increased competition, MUL also had a few
other problems on its plate. There was a delay in setting up of a
plant in India for manufacturing diesel engines and transmission
systems for cars.

66
MARKETING MIX

4 Ps OF Marketing

66
 PRODUCT
PRODUCT

66
 A product is anything that can be
offered to a market to satisfy a want or
need

Products that are marketed include

physical goods, services experiences
events, persons, places, properties,
organizations, information and ideas.

MARKET SHARE OF DIFFERENT PLAYERS

66
Market share
of
PASSENGE
R CARS

66
 e t Sh a re of
Mark
“SUV”

Market share of MUV

14%

Market share of MUV

14% others
51% TATA motors
Hyundai Motors
MUL
21%

66
 Maruti Esteem
VARIANTS & FEATURES
 Comfort
 Interior
 Instumental
 Exterior
 Safety & Security

Comfort:

Air-conditioner • • •
Cabin heater • • •
Reclining & sliding front seats • • •
Front door pockets (both sides) • • •
Front seat back pockets (both sides) • • •
Centre room lamp • • •

66
Driver's cabin room light • • •
Trunk room light • • •
Air flow controls • • •
Remote operated fuel tank lid • • •
Remote operated trunk lid • • •
Coat hanger hook on grip assistance • • •
Outside rear view mirror (R) • • •
Outside rear view mirror (L) • •
Power steering • •
Power windows (Front) • •
Power windows (Rear) •
Power antenna •
CD Player with stereo •
Driver's seat height adjuster •
Rear seat centre arm rest •
Rear defogger •
entral locking

Lx LXi VXi

Plush fabric upholstery • • •

Sporty gear shift lever knob • • •
Centre console box • • •
Sunvisors on both sides • • •
Ashtrays (front & rear) • • •
Grip assists (front & rear) • • •
Moulded floor carpets • • •
Luggage compartment carpet • • •
Moulded part fabric door trims • • •
Chrome plated parking lever knob • •
Silver finish power window switch garnish •
Cigarette lighter •
Silver finish louvres, garnish & bezels •
Vanity mirror

66
Tachometer • • •
Speedometer with sporty dial • • •

Front grille (Chrome plated) • • •

Head lamps with clear lens • • •
Windshield wiper (2 speed + intermittent) • • •
Rear combination lamps with clear lens • • •
Tubeless tyres • • •
Body coloured bumpers • • •
Body side moulding • •
Full wheel covers • •
High mount stop lamp • •
Front fog lamps with clear lens •
Body coloured door handles •
Body coloured side view mirrors •
Rear Spoiler

66
 Headlamp leveling device • • •
Collapsible steering column • • •
Lockable glove box • • •
Adjustable front seat head
• • •
restraints
Front seat belts (3-point
• • •
ELR type)
Child proof rear door locks • • •
Steel side impact beams • • •
Prismatic day-night inside
• • •
rear view mirror
Halogen headlamps • • •
Laminated windshield with
shade band

SPECIFICATIONS
 Dimension
 Weight
 Engine
 Transmission
 Chasis
 Capicity

4095
Overall length
mm
1575
Overall width
mm
1395
Overall height
mm
2365
Wheelbase
mm
Tread
1365
Front
mm
1340
Rear
mm
170
Ground clearance
mm

66
Turning radius 4.8 m

Unladen weight 870 kg (LX)

875 kg (L Xi,
Vxi)
Laden weight 1315 kg

Petrol engine, 4 stroke cycle, all-

Type
aluminium Water cooled SOHC
Cylinders In-line 4
No. of valves 4 / cylinder
Piston displacement 1298 cc
Bore X stroke 74 x 75.5 (mm)
Compression ratio 9.0 ±0.2
Maximum output 85 bhp @ 6000 rpm
Maximum torque 110 Nm @ 4500 rpm
Engine Control 32-Bit Electronic Control Module (ECM)

Manual 5 forward, 1 reverse all-synchromesh

66
 Steering Rack & pinion
Brakes
Booster assisted ventilated
Front
disc
Rear Booster assisted drum
Suspension
McPherson strut and coil
Front
spring
Rear Coil spring
Tyre size (Tubeless) 155/80 R 13 (LX, LXi)
175/70 R 13 (Vxi)

Seating 5 persons
Fuel Tank 40 litres

 Price Depends upon the City

City: MUMBAI Updated On: 11-Jul-2007

Variant Price
MARUTI ESTEEM MPI LX BS III 463020
MARUTI ESTEEM MPI LXI BS III 494561
MARUTI ESTEEM MPI VXI BS III 531403

City: KOLKATA Updated On: 11-Jul-2007

Variant Price
MARUTI ESTEEM MPI LX BS III 431586
MARUTI ESTEEM MPI LXI BS III 461608
MARUTI ESTEEM MPI VXI BS III 496674

66
City: CHENNAI Updated On: 11-Jul-2007

Variant Price
MARUTI ESTEEM MPI LX BS III 417340
MARUTI ESTEEM MPI LXI BS III 446669
MARUTI ESTEEM MPI VXI BS III 480966

City:NEW DELHI Updated On: 11-Jul-2007

Variant Price
MARUTI ESTEEM MPI LX BS III 444675
MARUTI ESTEEM MPI LXI BS III 474696
MARUTI ESTEEM MPI VXI BS III 509720

City: HYDERABAD Updated On: 11-Jul-2007

Variant Price
MARUTI ESTEEM MPI LX BS III 426888
MARUTI ESTEEM MPI LXI BS III 456525
MARUTI ESTEEM MPI VXI BS III 491147

City:
Updated On: 11-Jul-2007
AZAMGARH

Variant Price
MARUTI ESTEEM MPI LX BS III 454912
MARUTI ESTEEM MPI LXI BS III 485067
MARUTI ESTEEM MPI VXI BS III 520289

City: GOA Updated On: 11-Jul-2007

Variant Price
MARUTI ESTEEM MPI LX BS III 446486
MARUTI ESTEEM MPI LXI BS III 476507
MARUTI ESTEEM MPI VXI BS III 511574

66
State: MAHARASHTRA City: MUMBAI
S.No. Name Address Phone No.
VITESSE LIMITED Turf View, ,Seth Motilal G Sanghi 022-24945464
Marg,Worli 24922804,24954006(D)
2 SAI SERVICE STATION Phoenix Mill 022-24939977
LTD Compound,462,Senapati Bapat 24937850,4939681(D)
Marg,Lower Parel
3 SAI SERVICE STATION Western Express 022-26823297
LTD Highway,Diag.Opp. Gold Spot 26820066
Fact,Andheri (East)
4 SAH and SANGHI AUTO Giri Kunj,11-C N S Patkar 022-23804225
AGENCIES (P) LTD Marg,Kemps Corner 23803793
5 RATAN MOTORS 23/24 Bezzola Complex,Sion- 022-4975353
Trombay Road,Chembur 4291218,4287720
6 SPECTRA MOTORS Shivam Chambers,424, S V 022-28769955
LIMITED Road,Goregaon (West) 28768961
7 SPECTRA MOTORS Unit No.6-8, Blue Rose Indl. 022-28545165
LIMITED Estate,Western Express 28545166
Highway,Borivali (East)
8 SPECTRA MOTORS CTS No. 170/4081,Opp. Damodar 022-66440000
LIMITED Park, L.B.S. Marg,Ghatkopar (West) 66440111
9 Autovista 257,S.V. Road, Bandra 022-45021111
(W),Mumbai,Maharashtra
10 VITESSE LIMITED B/10, Gopi Chambers, Unit No. F-02 26745464
&G-02,Link Road, Oshivara,
Andheri ( W)
11 M/S SK WHEELS PVT Site No. D-267,TTC Industrial Area, 022-27625000 / 1 / 2
LTD MIDC,Turbhe, Navi Mumbai
12 FORT POINT 47/49,Cadell Road,Opp Mahim 022- 24473030
AUTOMOTIVE CARS Durgah,Mahim (W),Mumbai
PVT LTD.
13 FORT POINT Hindustan Mills Compound,Dr. 022- 23009500
AUTOMOTIVE CARS Anandrao Nair Marg,Saat Rasta,
PVT LTD Mahalaxmi, Mumbai
14 AUTOMOTIVE MIDC,TTC Indl.Area, Plot,No.D- 022-65163438/39/40
MANUFACTURERS LTD 234,Shirvane Village,Bombay Pune
Road
15 NAVNIT MOTORS PVT LTD Gokul Nagar,Mumbai-Agra Road,Thane- 25457400,25457401,
400 061 25457402
16 LAXMI CARS PVT. LTD. Laxmi Arcade,Western Express
Highway,Kashi Mira

66
66
 If you have any questions, please fill in this form and we will
reply to your query at the earliest.

You may also call Maruti at Toll-Free 1800 1800 180, it is accessible from
any fixed-line or mobile phone of BSNL/MTNL network across the nation. or
Alternatively Call-center can also be accessed using telephones on other
networks by dialing 9910 20 20 20 (not toll-free).

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CAR SEGMENT

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 SMALL CARS

 MID-SIZE CARS

 PREMIUM AND LUXURY CARS

 OTHERS

SMALL CARS:

 MARUTI UDYOG
 MARUTI 800
 MARUTI OMNI
 MARUTI ALTO
 OTHERS

MID-SIZE CARS
 VERSA
 ZEN
 SWIFT
 ESTEEM
 BALENO

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Competitiors of Maruti :

HYUNDAI MOTORS :
 SANTRO
 ELANTRA
 ACCENT
 GETZ

FIAT :
PALIO
PETRA
SIENA
UNO

CHEVROLET:
 AVEO
 OPTRA

FORD:
IKON
FIESTA
FUSION
ESCORT

TATA MOTORS:
 INDICA
 INDIGO

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DAEWOO MOTORS
 CIELO
 NEXIA
 MATIZ

OPEL
 ASTRA
 CORSA
 VECTRA

PREMIUM AND LUXURY CARS

SKODA AUTO:
 OCTAVIA
 SUPERB
 LAURA

FORD :
 FOCUS
 MONDEO

OTHERS Cars :

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1) ROLLS ROYCE
2) PORSCHE
3) HYUNDAI
4) BMW
5) MERCEDES
6) AUDI

MARUTI UDYOG

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LIMITED

The company launched :

 Maruti 800 in 1983

 Maruti Gypsy in1985
 Maruti 1000 in 1990
 Maruti Zen in 1993
 Maruti Esteem 1994

The later models of MUL include the

Baleno, WagonR, Alto and Versa.

Now they have launched SX4 & Vitara

which is there 2007 smashing
product.

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Maruti 800 Maruti 800
StdMaruti 800 AC

Maruti Omni 5 seater Maruti

Omni
8 seater Maruti
Omni
LPG Maruti Omni

Maruti Alt Alto

Alto Lx
Alto Lxi

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Maruti Wagonr Maruti Zen
LxMaruti Zen
LxiMaruti Zen Vxi

Maruti Zen WagonR Lx

WagonR Vxi
WagonR Lxi

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Versa 5 Seater
Versa Std
Versa Dx
Versa Dx2

Maruti Esteem Maruti Esteem Lx

Maruti Esteem Lxi
Maruti Esteem Vxi

Baleno Baleno Vxi

Baleno Lxi

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Swift Swift Lxi
Swift Vxi
Swift Zxi

Maruti Zen Classic

Maruti Gypsy Hard Top

Soft Top

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Grand Vitara

66
 PRICE

The 2nd ‘P’ of Marketing

 PRICE

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In a marketing exchange‘Price’ is the amount of money
that has to be paid to acquire a given good, service or
resource

 FACTORS FOR DECIDING PRICES:

Company Objectives
 Pricing objectives ideally should flow from the
company objectives

 For instance, a company like Rolls Royce or

Mercedes Benz.

 Profit Maximization

COST:

The price must be able to recover the total cost.

But sometimes a product may be priced below

the cost level in order to meet specific market or
competitive challenges like making the entry of
the rival difficult or out cutting the competitor.

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 COMPETITION :

 When a firm does not face any competition it

can enjoy complete freedom in fixing its price

 But when there are competitors selling the

same or similar products the pricing freedom of
the firm is considerably reduced

 For instance Maruti’s Zen now faces a lot of

competition from brands like Santro, Indica
and Palio.

CUSTOMER DEMAND :

 Customer demand depends on price elasticity

 When demand of the product is inelastic the
marketer can charge higher price without much
loss of the market or demand

 When the demand is elastic a slight change in

price alters the demand by a big magnitude

PRICING STRATEGIES:

 PRICE SKIMMING
Eg: Mercedes and BMW

 PENETRATION PRICING
Eg: Maruti

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Pricing of Maruti Cars

Variants Segment A
Below
3,00,000
2,05,003 -
2,07,617

Maruti 800 Std

Maruti 800 AC
Maruti 800 AC 2,30,507 - 2,33,121
2,45,695 - 2,49,270

Alto Std
Alto Lx 2,81,075 - 2,84,650
Alto Lxi 2,99,602 - 3,03,177
2,35,937 - 2,38,551

Omni 5 Seater
Omni 8 Seater 2,37,7808 -
2,40,623
Omni LPG 2,47,170 - 2,49,785

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Variants Rs3,00,000
-5,00000

Esteem 4,64,359
Lx
4,96,145

Esteem
Lxi
Swift Lxi 4,16,485

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 4,43,924

Swift
Vxi
Versa Std 3,85,222 -
3,89,046
4,62,331 -
4,66,154

Versa
Dx
Wagon R Lx 3,33,986 -
3,60,153
Wagon R Lxi 3,63,748-
3,67,323
Wagon R Vxi 3,88,354 -
4,24,391
Zen Lx 3,29,769 -
3,43,699
Zen Lxi 3,56,085 -
3,70,022

Variant Rs
5,00,000
-
10,00,00
0
Baleno Lxi 5,81,186

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 Baleno Vxi
Gypsy hard top6,62,520 5,17,352
-
5,20,391
Gypsy soft top 5,38,029
-
5,41,069

MARUTI’S COMPETITORS :

MINI -
(Below Rs
3,00,000)
COMPACT Tata Indica, Hyundai
( Rs 3,00,000- Santro, Hyundai Getz,Fiat
Rs 5,00,000) Palio
MIDSIZE Ford Ikon, Tata Indigo
( RS 5,00,000-
Rs 10,00,000)

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PLACE:

The 3rd ‘P’ of marketing

SIGNIFICANCE OF DISTRIBUTION
CHANNEL:

• The distribution system is a key external

recourses normally it takes years to build,
and it is not easily changed

• It ranks in importance with key internal

resources such as manufacturing,
research, engineering and sales personnel
and facilities

• It represents a significant corporate

commitment to large no of independent
companies, whose business is distribution
and to the particular markets they serve

66
GEOGRAPHICAL LOCATION :

66
 SECTION-IV

 MARKET CHANNELS:

66
 Why are they used?

 MANUFACTURERS USE MARKET CHANNELS

BECAUSE…..

 Transporting goods

 They have the resources

 Companies save money

 MARUTI DEALERS DETAILS

 Its distribution channel is based on

ONE LEVEL CHANNEL type where in there
is not more than one intermediate.

The company uses a distribution channel with

can be partly exclusive and is partly selective

Maruti has under it 309 state of art

showrooms spread across 189 cities, with a
work force of 6000 trained personnel who
guild the customers to find their right car

66
DISTRIBUTIONCHANNELAUTOMOBILE
INDUSTRY:

In context to Maruti India as an example

CRITERIA FOR DEALERSHIP

 Showroom space
 All showrooms are pre-designed by Maruti
 Owned by dealers

 Pre sales Policy

 No credit is given to the dealer.
 The dealer has to buy cars from Maruti
directly
 The company dispatches these cars only
after full payment is made to it
The dealer has to book a car 45 days in
advance

After Sales Service

 The dealer must be maintain the
infrastructure to provide good after sales service
as per the standards laid down by Maruti. The
after sales service includes
 2 year warranty on every car
 1 month-6 months-1 year free servicing
depending on the car
Finance Options

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 The dealer ties up with all major banks like
ICICI, Kotak, HDFC Citibank to provide easy
finance options to their customers in the form of:
 Rock bottom interest rates
 Low EMIs
 Easy Documentation-insurance, road tax, RTO

66
FUNCTIONS OF DEALERS/CHANNEL PATNER:

 INFORMATION
 PROMOTION
 NEGOTIATION
 ORDERING
 FINANCING
 TRANSPORTING

THE CAR BUYING PROCESS:

“Atithi Devo Bhava”

66
 (The customer is GOD)

FROM DEALER’S MOUTH……..

- Mr.Rajesh Soni
(Dealer,Goregaon Showroom)

The dealer first recognizes three types of

customers

1) Those who know the product they want

to buy

2)Price conscious customers, who decide

on a product purely on their disposable
income

3)Customers aware of the product and

price, but wants the best finance options.
Car buying process continues…

66
  Secondly, negotiates and provides him with
alternatives

 Once the customer decides the product he

wants to buy, he needs to pay the following:
 Yearly insurance premium
 Road tax
 Registration fee
 Down payment. Finally the contract on
after sales services.
PROMOTION:
• The 4th P of marketing
• One of the most important as well
• Goes by its name Promotion of a product
• Marketing communications has its own
‘promotions mix.'

Elements of the promotions mix

 Personal Selling e.g. Sales People Using Cars

 Sales Promotion e.g. BOGOF promotion, or Buy
One Get One Free
 Public Relation e.g All airlines exploit PR
 Direct Mails e.g. : Marketing medical text books
: Doctors
 Trade Fares And Exhibitions
 Advertising
 Sponsorship e.g. Olympics Formula 1

66
The elements of the promotional mix are then
integrated to form a unique, but coherent
campaign.

Promotions Carried Out By Maruti:

 Why Offers :
• Faced with stiff competition
• Declining market shares
• MUL focused on two wheeler owners
• MUL Market Survey :

▪ Use Of Two-Wheeler was compromising

▪ Most consumers never approached a car
dealer
▪ a lack of adequate knowledge of finance
options
▪ general perception About EMI

‘CHANGE YOUR LIFE’

 Launched In 2003

 Vehicle insurance ‘FOR RUPEE ONE ONLY

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TRUE VALUE BORCHURE

66
SECTION- V

66
MARKET SEGMENTATION,
TARGETING & POSITIONING

Market segmentation :
 Market segmentation is the process in marketing of dividing a
market into distinct subsets (segments) that behave in the
same way or have similar needs.

 Homogenous segment

66
  Similar feeling and ideas about a marketing mix

DEVELOPING A MARKET SEGMENTATION

STRATEGY :
Ma

De
od

fin
uc

Pr
rk
et

e
t
tat

Se
en

ne
mi
es
as
fo

er
io

et
B

D
n

r
Se

cri
en

be

es
ts

D
g
Se

ofi
en

na
ze

Pr
ts

ly

le
A
&
g

66
 Se
Ta
ke

rg
ar
ts

et

ct
M

le
Maruti Cars are essentially segmented on
the following parameters:
1. Segmentation for passenger cars:
• Price based
• Length based

1. Segmentation for utility vehicles

• Based on weight

1. Segmentation for MUV’s

• Based on weight

Passenger cars :
Length Based Classification

 Segment A1 (Mini) – cars having a length up to 3,400mm

 Segment A2 (Compact) – cars having a length of 3,401-

4,000mm

 Segment A3 (Mid-size) – cars having a length of 4,001-

4,500mm

 Segment A4 (Executive)– cars having a length of 4,501-

4,700mm

 Segment A5 (Premium) – cars having a length of 4,701-

5,000mm

 Segment A6 (Luxury) – cars having a length of more than

5,000mm

 Weight upto 3.5 tonnes

66
  Seating capacity not exceeding 7 (including
driver)
 Seating capacity between 7 and 9 (including
driver)

 Weight upto 5 tonnes

Seating capacity not exceeding 13 (including driver)

Segmentation Table
LENG MANUFACTURING
TH
BASE
D
SEGM
ENTA
TION
PRIC
E
BASE
D
SEGM
ENTA
TION
A1 MARUTI UDYOG LTD
MINI
AN
AM
E
OF
TH
E
MO
DE
L

66
MARUTI 800 MARUTI A3 MID SIZE B
1000
ALTO A2 COMPACT B
BALENO A3 MID SIZE C
ESTEEM A2 COMPACT B
WAGON R A2 COMPACT B
ZEN A2 COMPACT B
VERSA UTILITY VEHICLE C
UTILI
TY
VEHI
CLEA
OMNI SWIFT A2 COMPACT B
A3
MID
SIZE
A
GRAND VITARA

66
SECTION-VI

PRODUCT LIFE CYCLE OF ‘MARUTI 800’

66
INTRODUCTION STAGE

 Maruti 800 launched

 Product of the JV

 GoI - provide an affordable and fuel efficient car

 Price

 First family car

GROWTH STAGE

66
  1994 record set

 Best selling car, true value for money proposition

 Shifting preferences

 Global carmakers

 Rising incomes, used car market, easier finance options

MATURITY STAGE

 Competition increased by leaps and bounds

 Falling market share but slow increase in sales

 Step child treatment

 New variant of Alto

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  Fresh look

 Jagdish Khattar quote

DECLINE STAGE???

 Not yet reached decline

 Readying to compete with Tatas 1 lakh car

 But how long will the small car survive

BCG MATRIX :

SWOT ANALYSIS

66
STRENGHTS WEAKNESS

 Economically pried cars  The cars are not used by the

 High fuel efficiency
 Company Goodwill
 Good after sales service
 Middle class expanding
by 30-40 million every
year
 Growing working
population
upp er class segment.
 Technology up gradation
slower as compared to global
counter parts
 Lack of Aggressive
marketing strategy and
incentives.

OPPORTUNITIESTHREATS

 Increasing number of MNC entering the market.

 Large global giants looking out for outsourcing
 Preference for Globally popular brands- Globalisation.
 Increased financial options available.

 Product Diversification
 (Enter the Diesel car segment.
 Introduce cars targeting niche customers, SUV
segment.)
 Develop Growing working population more rural
options.

66
SECTION-VI

Conclusion&
Recommendation
 As Safety and mileage are two important parameters
according to the respondents

 As this Segment is very price consiciou’s Maruti should keep

its car at reasonable because of their this policy , they are the
king of the Indian Automobiles Industry .

 New & Innovative Models , Pricing strategies ,Penetrating

different marketing Policy & strategies should be followed .
 Heavy Advertising should be done for any new launch of TV
Advertisement, Media Advertisement

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 Maruti’s while launching of new Cars in Market like SX4, Zen
, Alto, have kept a formula in mind
That should be launched in Phases such as three Phase
1) Phase 1- “A” Grade cities ,Metro City should
be targeted .
2) Phase 2- “B” Grade Urban cities
3) Phase 3 – “C” Launch all over Country in
rural area to.
 Promotion should be done in every Phase heavily .
Through every possible medium of advertising such as TV
Add, Print Add ,Trade Fair , Exibition
Should used to advertise heavily before & after launching the
Car .

BIBLOGRPHY
1) www.marutiudyog.com
2) www.automobileindia.com
3) www.indiacarinfo.com
4) Automobiles (magazines)
5) Economics Times
6) DNA Money

66
 Annexure

Questionnaire

1) Do you own a Car ?

Yes

No

2) Do you have a plan to own a car in near future

Yes

No
3) Accordingly to you , which are the leading car companies in
India ?

Cars Tom Unaided Aided

Maruti
Fiat
Mahindra

66
 Tata motors
Ford
General &
Motors

4) Please rank the following attributes according to your

Importance while purchasing a car .

Safety
Mileage
Availability
Accessory of
Availability
Looks
Style
Speed
Brand Name
Promotion

5) Price is an important consideration for you while

purchasing a car
Yes
No

6) Do Promotional offer impact your buying Maruti

66
 Yes
No

7) Is there any particular occasion when would u like to

by a new car .

Festivals Anniversaries
New – Year Increasing Family
Vaccation(May- Any Other
Winter
BirthDay

8) Who will be the Decision makers I while Purchasing a

Car ?

Yourself
Wife
Friends
Children
Others

9) Who do you Recommend while Purchasing a Car

Family Newspaper
Friends T.V Advertising

66
 Dealer Colleague
Magazines Any other

Name : Occupation :

Age :

Income Mothly: 100,000 -200,000

200,000 -300,000

300,000 & More

( Pls tick on the required field that fit u )

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