Table of Contents

CHAPTER – I INTRODUCTION

Page 4

CHAPTER – II ENVIRONMENT SCAN OF CAR INDUSTRY IN INDIA

• Technology
• Government
• Economics
• Culture
• Demographics

Page 5-6

CHAPTER – III REVIEW OF MARKETING STRATEGY BY SWOT ANLYSIS

Page 7 - 10

CHAPTER – IV CONCLUSION

Page 11

CHAPTER – V BIBLIOGRAPHY

Page 12
 CHARTER – I INTRODUCTION

Since Independence The Car Industry was closely monitored and controlled by the government

till 1981. Limited choices were available to the car buyers due to the limited manufacturers and

tight supply.

In 1981 the government decided to review their car industry policy and found that the segment

was neglected and there was a big market available for cars. The existing cars available in the

market were costly and technically less sound with compare to international standard.

The government initiated dialogues with Suzuki Motors, a Japanese car manufacturing company,

finalized a joint venture, and formed a company named Maruti Udyog Limited (MUL). The

initial venture was between Government of India with a share of 74% and Suzuki Motor with a

share of 26%.

That was a revolutionary step taken for the car industry in India. In 1983 MUL launched its first

car in India (Maruti 800) with a price tag of Rs.40,000/-.

This development was a big shock to the existing car manufacturers and they also rushed to

improve and increase their product line.

After the lifting of licensing in 1993by government, 17 new ventures came up, of which 16 are

for manufacture of cars.

Since then the Indian car industry is flourishing phenomenally and become a key sector for Indian

economy.
CHAPTER – II ENVIRONMENT SCAN OF CAR INDUSTRY IN INDIA

Technology

The India car industry is technically sound and in competence with car industry in other

countries. Tata Motor has launched its Indica a fully designed car in India.

Mr. Dilip Chabaria, a Mumbai based car designer is also in the news for his exclusive design of

cars. Ford Motor Company in India also had arrangement with him when the Ikon (car) was

launched and specially designed sports model was available for customers designed by DC

Designs.

Strict emission controls imposed by the government, car manufacturers in India are

manufacturing their cars with Bharat Stage III compliant standard.

New fuels like CNG and LPG are also not ignored and new cars are available to run on these

fuels.

A Bangalore based company has also producing Reva, an electric car though it is not broadly

accepted by the car buyers in India. Electric cars are non polluting in terms of smoke and noise.

The overall technology for cars in India is satisfactory.

Government
1981 was the year when government taken a revolutionary initiative to review and reform its

policy related to car industry. Now getting permission to produce cars in India is easier and new

entrants are coming almost every year. Government has also imposed heavy imposed heavy

import duties on imported vehicles to safeguard the car manufactured locally.

Economics
The economic condition is sound in India with a good GDP rate and it is one of the fastest

growing economy in the world. India still has to go a long way to be a first world country.
It has become a very favorite spot for investors abroad. Almost all big car manufacturers have

entered into this market and many are planning to do that. Some of the best brands of the world

are also available in the country i.e. Maybach, Rolls Royse, BMW etc.

Tata Motors is planning to launch a car with a price tag of Rs.1 Lac to attract those untapped and

big segment of customers who are not able to buy a car and having Motorcycles. This will again

revolutionise the India car industry on the whole. India is one of the biggest markets for the small

cars in the world.

Culture
In last few years due to a good growth in economy and globalization, average income of people

has increased which resulted in better liquidity of cash. Earlier people were more on the investing

part then spending but today the scenario is different today (specially the young generation) is

believing on spending then investing or saving. Easy financing with a lower rate of interest has

also facilitated people to buy and afford a new car.

The car manufacturing companies has grabbed this opportunity and segmented their productline

very well to serve each segment of the car market in India.

Demographics

The future of car industry is India is good due to favorable economic conditions. Easy availability

of funds has increased capacity of owning a car for buyers dramatically.

A new generation of IT/BPO executives are also a good segment of customers of the car industry

as their spending power is proportionately higher then other executives. This becomes an

opportunity for the car producers.

 CHAPTER – III SWOT ANALYSIS AND MARKETING STRATEGY

Strenghts (Internal Envoirnment)

Maruti Udyog Ltd. (MUL)

• MUL is in a leadership position in the market.

• Major strength of MUL is having largest network of dealers and after sales service caters

in the country.

• Self competing product range in small car segment

o Maruti 800

o Omni

o Alto

o Zen

o Wagon R

• Good promotional strategy is adopted by MUL to transform its thoughts to the people

about its products

o Baleno: “Missed the flight catch Baleno” The most comfortable Car even in long

drives.

o Esteem: “My Daddy’s Big Car” Affordable mid size car

o Alto: “Lets Go” The fuel efficient and affordable car

o After Sales Service “Kya yanha Maruti Service Station hai” Availibility of

service stations even in the remotest place in the country.

• Refurbished Cars: MUL has also entered into second hand car market with a brand name

“Maruti True Value”.

• Loyal Customer Base is another big strength of MUL. In JD Power survey, MUL has

been awarded consequently 5th year for best customer satisfaction.

 • Strong Brand Value

• Availability of raw material

Hyundai Motors India Ltd. (HMIL)

• In few years of operation, HMIL has secured a challenger position in the car segment

being second largest car manufacturer of India.

• Product line in all sizes of cars.

• Presence in diesel segment of cars.

• Option available to customer to upgrade their cars being with the company.

• Good Promotional strategy by endorsing celebrities with its cars.

• Strong Brand Value.

• Availability of raw material

Weakness ( Internal Envoirnment)

Maruti Udyog Ltd. (MUL)

• Lack of having products in mid size car segment could result in shifting of loyal

customers who has a desire to upgrade their cars.

• Low interior quality in side the cars.

• Labour Laws and Labour Unions are not in a good form in India.

• Government intervention due to having share in MUL.

Hyundai Motors India Ltd. (HMIL)

• Less number of dealers and service stations

 • Not able to transfer its car specialty as Maruti is doing rather more relied on celebrities.

Though endorsing celebrities was successful initially but at the same time company

needs to transfer the thoughts by telling better qualities of the car to its customer as MUL

is doing

o Sentro: “Sentro wale hai” Celebrity endorsement

• Labour Laws and Labour Unions are not in a good form in India

Opportunity (External Envoirnment)

Maruti Udyog Ltd. (MUL)

• MUL may encash the opportunity to enter again into the diesel segment of the cars to

compete its nearest competitor TATA in diesel segment of small cars. Though MUL

launched Zen in diesel version but it was not successful.

• MUL has launched its LPG version of Wagon R and it was a good move simultaneously

MUL can start R&D on electric cars for a much better substitute of the fuel.

• Economic growth of the country is sound and promising in future.

• Liberal policies of GOI.

• Big Market: Domestic and Abroad

Hyundai Motors India Ltd. (HMIL)

• HMIL may also enter into the diesel segment for small cars. The company lauched its

mid size cars in diesel segment with CRDI engines and it was very successful. It is easier

for HMIL to come faster then its competitor MUL.

 • R&D on fuel substitution has become must to sustain longer in future.

• Economic growth of the country is sound and promising in future.

• Liberal policies of GOI.

• Big Market: Domestic and Abroad

Threat ( External Envoirnment)

Maruti Udyog Ltd. (MUL)

• Tata Motors is planning to launch a car with a price tag of Rs. 1 Lac and that could give a

big impact on sales of MUL

• HMIL is a challenger and trying hard to achieve number one position in the market.

• China may give a good competition as they are also planning to enter into car segment.

Hyundai Motors India Ltd. (HMIL)

• Tata Motors is planning to launch a car with a price tag of Rs. 1 Lac and that could give a

big impact on sales of MUL.

• Maruti is very fast in reaction to developments made by HMIL to retain its leadership

position.

• China may give a good competition as they are also planning to enter into car segment.
 CHAPTER – IV CONCLUSION

MUL is good in its marketing strategy and showing good results however, the lack of having the

complete product line may cause customer loyalty in a long run. It is seen that the first entry of

MUL in diesel segment was not that good and successful it should try to come up with better

diesel engines along with new versions of cars. The government intervention due to having partial

ownership in MUL may cause problems in due course if the political situations are adverse.

The overall marketing strategy of MUL is Satisfactory.

HMIL has got a very good response by endorsing celebrities with its products but I would advice

that it should advertise better to create a good picture of its products by transferring the key good

things about its cars. HMIL has a good tract record of having successful diesel mid size cars in its

portfolio and it should encash the same opportunity to launch the diesel versions of small car

before MUL to have competitive advantage.

The overall marketing strategy of HMIL is satisfactory.