mmi_sectiona_group 18_tha _stp-maruti and honda final report
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SUBMITTED BY- GROUP 18
A.M.PRADEEP KUMARAN 0002/51
ANKEETA 0044/51
AMANPREET SINGH 0033/51
ANUPRIYO MUNDAL 0062/51
MARKETING MANAGEMENT-1: ASSIGNMENT
SEGMENTATION, TARGETING AND POSITIONING
MARUTI SUZUKI INDIA AND HONDA MOTORS INDIA
“WHEN THE JAPANESE GIANTS WENT TO BATTLE IN INDIAN
GROUNDS....”
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Table of Contents
1 .OUTLOOK: AUTOMOBILE INDUSTRY IN INDIA ............................................................................... 3
(a) EVOLUTION OF AUTOMOBILE INDUSTRY IN INDIA .......................................................... 3
(b) KEY PLAYERS AND PRODUCTS .............................................................................................. 3
(c) GOVERNMENT INITIATIVES .................................................................................................... 5
(d) FACTORS DETERMINING THE GROWTH OF THE INDUSTRY ........................................... 5
(e) INDUSTRY PERFORMANCE IN FY 2014-2015 ........................................................................ 5
2. BASICS OF STP OF PASSENGER CARS IN INDIA............................................................................... 6
3. MARUTI SUZUKI INDIA LIMITED AT A GLANCE ........................................................................... 10
4. HONDA CARS INDIA LIMITED AT A GLANCE ................................................................................ 12
5. SEGMENTATION, TARGETING AND POSITIONING BY COMPANIES ......................................... 13
MARUTI SUZUKI INDIA ...................................................................................................................... 13
PRODUCT MIX .................................................................................................................................... 14
(a) MARUTI ALTO 800 .................................................................................................................... 15
(b) MARUTI ALTO K10 .................................................................................................................. 16
(c) MARUTI WAGON R AND STING RAY: .................................................................................. 17
(d) MARUTI CELERIO: .................................................................................................................... 18
(e) MARUTI SWIFT: ......................................................................................................................... 19
(f )MARUTI RITZ: ............................................................................................................................ 20
(g) MARUTI SWIFT DZIRE: ............................................................................................................ 21
(h) MARUTI SUZUKI SX4: .............................................................................................................. 22
(i) MARUTI ERTIGA: ....................................................................................................................... 23
(j) MARUTI OMNI AND EECO: ...................................................................................................... 24
(k) MARUTI GYPSY AND GRAND VITARA: ............................................................................... 25
HONDA CARS INDIA : ........................................................................................................................... 26
PRODUCT MIX: ................................................................................................................................... 26
(a) HONDA BRIO : ............................................................................................................................ 27
(b) HONDA AMAZE :........................................................................................................................ 28
(c) HONDA CITY: .............................................................................................................................. 29
(d) HONDA CRV: .............................................................................................................................. 30
(e) HONDA MOBILIO: ...................................................................................................................... 31
6. FUTURE PRODUCTS : ............................................................................................................................ 32
MARUTI SUZUKI : ............................................................................................................................... 32
HONDA CARS INDIA LIMITED: ........................................................................................................ 32
7. WHAT THE LEADERS SAY: ................................................................................................................. 33
MARUTI SUZUKI: ................................................................................................................................. 33
HONDA CARS INDIA LIMITED: ......................................................................................................... 35
8. REFERENCES: .......................................................................................................................................... 38
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1 .OUTLOOK: AUTOMOBILE INDUSTRY IN INDIA India‘s Automobile Industry is seventh largest in the world with an average annual
production of 17.5 million vehicles of which 2.3 million are exported. The Indian Automobile
market can be divided into several major sectors like two-wheelers, three-wheelers, passenger
cars, commercial vehicles. The Indian passenger vehicle market is dominated by cars at 79%.
Auto industry of India has been recording tremendous growth over the years and accounts for
7% of our total GDP and employees19 million people directly or indirectly. Also it accounts
to 22% of country‘s manufacturing GDP.
a) Evolution of Automobile Industry in India:
b) Key players and products:
Indian automotive industry has over 35 players in various segments. Mahindra and
Tata motors are two major home grown players in passenger car segment and commercial
vehicles segment. While Mahindra has market leadership in the Utility segment, Tata has
dominance in the commercial vehicle segment. It also key products in passenger segment like
the Indica, Nano etc. Maruti Suzuki is the market leader in passenger car segment. Passenger
car segment is extremely competitive with lot of foreign players like the Korean Hyundai
motors, Japanese giants like Suzuki, Toyota, Honda, German powerhouses like VW, Skoda
and American majors like Ford, General motors. Two wheeler segment is dominated by
Bajaj, Hero motors, Honda motors, Yamaha. Even the luxury segment has significant players
like BMW, AUDI, Mercedes Benz, Porsche etc. Commercial segment has players like Tata,
Ashok Leyland, AMW, Daimler India.
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While mergers and acquisitions have been a trend of the late, few major
acquisitions include Mahindra‘s take over of Ssangyong motors of Korea, Tata‘s takeover of
JLR. Renault tied up with Nissan to develop products specific to India in a synergy contract.
The following picture below shows a bird‘s eye view of various brands existing in passenger
and luxury car segment in India.
Some of the most iconic products include the Maruti 800, Tata Indica, Mahindra‘s
Scorpio, Ford‘s Figo, Maruti Swift in the passenger and utility segment. In two wheeler
industry, some key products include the famous Splendor from Hero, Pulsar from Bajaj.The
following are some of the key products that revolutionised the automotive industry in various
time periods.
The iconic “Maruti 800”
World’s cheapest car “Tata
Nano”
The Mighty Muscular
Mahindra “Scorpio”
Legendary “Splendor”
Revolutionary “Bajaj
Pulsar”
The “Ambassador”
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(c)Government Initiatives:
The Government of India has allowed 100 per cent FDI in the automotive
industry through automatic route. Special focus is on exports of small cars, multi-utility
vehicles (MUVs), two and three-wheelers and auto components, the automotive sector's
contribution to the GDP is expected to double reaching a turnover worth US$ 145 billion in
2016, according to the AMP 2006-2016. The Union Budget 2014-15 had given some
incentives to the auto industry by extending the excise duty concessions beyond 30th June
2014 for a period of 6 months up to 31st December 2014.
For small cars, motorcycle, scooters -duty has been reduced from 12 to 8 per cent.
For commercial vehicles and SUVs -duty has been reduced from 30 to 24 per cent.
Duty has also been reduced from 27 per cent to 24 per cent for large-segment cars,
and from 24 per cent to 20 per cent for mid-segment cars
(d)Factors determining the growth of the industry:
Fuel economy and demand for greater fuel efficiency is a major factor that affects
consumer purchase decision that will bring leading companies across two-wheeler and
four-wheeler segment to focus on delivering performance-oriented products
Sturdy legal and banking infrastructure
Increased affordability, heightened demand in the small car segment and the surging
income of the Indian population
India is the third largest investor base in the world
The Government technology modernization fund is concentrating on establishing
India as an auto-manufacturing hub
Availability of inexpensive skilled workers
Industry is perusing to elevate sales by knocking on doors of women, youth, rural and
luxury segments
Market segmentation and product innovation
(e)Industry performance in FY 2014-2015:
Industry output in August 2014 inclined by 14.86% of what it was in August 2013.
Domestic sales growth for passenger vehicles in April-August, 2014 was 4.46% over
the same period last year.
Passenger Cars and Utility Vehicles grew by 5.24 percent and 9.46 percent
respectively in April-August 2014 over the same period last year
The overall Commercial Vehicles segment registered a de-growth of (-) 13.66 percent
in April-August 2014 as compared to same period last year
Two Wheelers sales registered growth of 14.79 percent in April-August 2014 over
April-August 2013
In April-August 2014, overall automobile exports grew by 21.30 percent over the
same period last year, wherein for passenger vehicles it grew by 0.17%
In April 2014 export of utility vehicles showed an improvement of 298 percent with
41,550 units.
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2. Basics of STP of Passenger Cars in India: Passenger car segment is one of the largest car segments in India. Sale of
domestic passenger cars rose 15.16 percent in August, marking the fourth consecutive month
of growth after nearly two years of deceleration, industry data showed Tuesday10. The new
generation of young executives with handsome salaries has increased purchasing power in the
Indian domestic market. India is witnessing a boom in the passenger car segment with major
car makers making their foray in India.
Passenger Vehicles sales is expected to grow at 11% CAGR over FY 12-16.The
Micro segment is expected to grow at a CAGR of 13.8 percent; the Mini segment will keep
its pace due to the penetration in tier III cities and the rural segment and is likely to grow at a
CAGR of 6.7 percent over the next five years (FY'14 - FY'19). The Compact segment is
likely to grow at a CAGR of 4.0 percent over the next five years. This segment is likely to be
affected in the near future due to increasing preferences for compact Sports Utility Vehicles
and Super Compact segment vehicles. The Super Compact segment which is expected to see
few more new launches is likely to grow at a CAGR of 10.3 percent over next five years.
This segment is perceived to be value for money .With a maximum number of new launches
by almost all the OEMs in Utility Vehicles (UVs), this segment is likely to grow at a CAGR
of 20.2 percent over the next five years. The SUV is seen as a status symbol and feeds the
aspirations of the growing middle class and the affluent. Another factor is the availability of
financing options which has brought the expensive SUV into the affordable range for the
consumer. UVs also provide the required capacity to accommodate the large Indian joint
family.
Segmentation:
Geographic - Segmentation of consumers based on country, region, state, urban/rural
areas constitute geographic segmentation.
Region –Different regions can have different buying seasons for cars. People generally
prefer buying such products at any special or auspicious festival and such things vary
among different region while some seasons are lean. So marketers need to identify when
to market a product according to the region in which the consumer lies.
Rural/Urban – Some companies segment on the basis of urban/Semi-urban/Rural
consumers. Accordingly they will have to identify how and which product to market in
those segments.
Demographic – Segmentation of consumers on the basis of religion, age, gender,
purchasing power, community, language, family size, occupation, social status.
Age – The car manufacturers are segmenting the consumers on the basis of age. For
younger generation they are providing them more of thrill and style and for middle and
old age people they are providing more of safety and reliability.
Gender – Mostly cars don‘t segment on basis of gender but it can be taken up. For ex,
Honda Fit She‘s pretty-in-pink version of the maker‘s familiar subcompact offers a few
properties the maker believes will specifically appeal to women, such as a windshield
designed to block skin-wrinkling ultraviolet rays.
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Purchasing capacity – Buyer‘s preferred range is often related to their purchasing
capacity. Budget, Compact, Family and Premium car segments are some of the
segments on this basis.
Psychographic – Segmentation of consumers according to their social class, lifestyle,
personality and buying psychology. People prefer buying cars out of their lifestyle
practices and psychographic segmentation helps in positioning/repositioning, launch of
products.
Behavioral segmentation - Markets can be segmented on the basis of buyer behavior.
Different customer groups expect different benefits from the same product and
accordingly, they will be different in their motives in owing it and their behavior in
buying it. Some behaviors are utilitarian, hedonic and low involvement purchases.
Benefit sought like fuel efficiency and technology, usage rate, usage status, loyalty to
brand, decision roles like test rides etc. can be the basis for such segmentation.
Category segmentation of cars used in our project
The idea behind our project is to analyse the key segments of various cars by
Honda and Maruti and we are segmenting them on the basis of prices of cars. The
reason pricing category is chosen as a basis is because that is the most important factor
affecting a consumer decision of buying a car. Also the categories are more
differentiated and there is no overlap hence making our analysis more clear. Below is
the category basis:
Car
Segment
Distinguishing feature of the cars in this
segment
Car models belonging
to the segment
A Entry level Cars priced from 1 lakh to 3 lakhs Alto, Spark, Nano, Eon
B1 Hatchbacks priced lower than Rs. 6 Lakh Santro, Indica, Beat
B2 Hatchback priced between Rs. 6 to 7.5 Lakh Ritz, i10, i20, Swift,
Figo
C1 Sedan models priced below Rs. 8 Lakh Indigo, Fiesta, Sunny
C2 Sedan models priced between Rs. 8 to 9.5 Lakh Verna, Manza, Linea
C3 Premium Sedan models priced below Rs. 15 Lakh Fluence, Corolla
D1 Luxury Sedan models priced below Rs. 25 Lakh Sonata, Camry, Kizashi
D2 Luxury Utility vehicles priced above 25 lakhs Vitara,CRV
Other
Utility
vehicles
Gross products and cross overs like off roading
vehicles, single box construiction vehicles and few
SUVs, MPVs
Omni, Mobilio, Eeco,
Innova
Again, there are lot of chances of overlap. The compact SUVs like Eco sport and Duster
are priced at a base of around 7 Lakhs. But for sake of convenience and based on research,
we have opted to keep the utility vehicles classified separately as the companies we have
chosen are predominantly into hatchbacks and sedans.
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Targeting:
In targeting, some measures and ideas are developed for making the segment
attractive and also it involves deciding upon which segment should be targeted. The company
fully concentrates its marketing energies in reaping the benefits from target segment.
Sometimes through selective segmentation companies approach more than one segment. Also
through deep segmentation a deep differentiation can be created among the products in the
market. There are distinct group of car buyers with widely varying and clearly distinguishable
needs. Hence marketers target these kinds of buyers created sub-segments.
To decide upon the segmentation there are a few effective segmentation criteria:
1. Measurable – The size, purchasing power and characteristics of the segments can be
measured. For cars, purchasing power matters the most.
2. Substantial – The segment should be large and profitable enough to serve. Also when
a company rolls a new car model it invests heavily on its R&D and so target segment
should be large enough so that it can cover its cost.
3. Accessible – The segment should be effectively reached and served. Also for cars like
sedan which can be targeted for semi urban/rural consumers company should be able
to reach them.
4. Differentiable – The segment should respond differently to different marketing-mix
elements and programs. Different cars follow different marketing mixes so segments
should be differentiable for each mix.
5. Actionable – It should allow programs to be formulated for attracting and serving the
segments. Cars should attract buyers by programs like EMI option, 0 down payment,
etc.
So in identifying the target segment a need based market segment approach can be applied. It
is a seven step process.
1. Needs-based Segmentation – group customers into segments based on similar needs
and benefits sought by customers in solving a particular consumption problem.
2. Segment Identification – For each needs-based segment, determine which segment
factors (demographics, lifestyles, etc.) can come into play.
3. Segment Attractiveness – Using predetermined segment attractiveness criteria the
attractiveness of it can be determined.
4. Segment Profitability – Determine how profitable the segment is in terms of long
term revenue inflow.
5. Segment positioning – A value proposition can be created for positioning.
6. Segment “Acid Test” – Assess and test the attractiveness of each segment‘s
positioning strategy and identify if it is gaining audience for that.
7. Marketing-Mix strategy – 4P‘s analysis and expanding segment positioning strategy.
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Positioning:
Positioning is placing the product in consumers‘ minds relative to
competitors product A good positioning has a ―foot in the present‖ and a ―foot in the future‖
such that any future launches of products with added features doesn‘t have to position itself
all over again. A focused value proposition is created successfully for the consumers.
Positioning requires the following things:
1. Determining a competitive frame of reference: It is to decide which brand to compete
with and focus on the competitive analysis for that. One needs to identify its competitors
both actual and potential. Also an analysis of competitor and its offerings should be done,
So in case of cars when there are so many small and large players in the market one needs
to carefully observe its competitors .
2. Identifying optimal points of difference and points of parity-POD refers to the added
benefits a consumer gets in the brand and they should be able to feel that they could not
find the same benefit with the competitor brand. POP focuses on the benefits of the
product which need not necessarily be unique to it. It can be required to negate
competitors perceived POD‘s and negate a perceived vulnerability of the brand as a result
of its own PODs. So when it comes to cars both POPs and PODs are important.
3. Choosing POPs and PODs – Marketers focuses on brand benefits in choosing the POPs
and PODs that make up their brand positioning. Such should be the case in passenger
vehicle segment also.
4. Brand Mantras – It is helpful to define a brand mantra. It is an articulation of the heart
and soul of the brand. These are short 3-5 word phrases which shows the spirit of the
brand. For eg, Fiat – Driven by passion, Tata motors – even more car per car.
5. Establishing brand positioning – After determining the strategy it should be
communicated to everyone in the organization so that they work for it together. It aims at
making the brand a superior choice of consumers. For eg, Tata motors shows the highest
level of employee involvement in working towards realizing the brand mantra.
Passenger cars in India can be positioned as city cars, which are comfortable to
drive, give high mileage, low operational cost and low price. The competition is growing in
this segment as more companies are entering to gain from the growth in the sector. So each
manufacturer should position it better than anyone else by upgradation, price benefits, new
technology, and better payment options like EMIs and down payments. Showing below a
table of how positioning is done for cars.
Brand and
company
Target
Customers
Benefits Value Proposition
(PODs)
Positioning
Santro Eco,
Hyndai
Environmentally
Conscious
Consumers who
want a small and
safe car
Better power and fuel
efficiency, less
maintenance cost,
Economical ,environment
friendly small car
Santro Eco –
An
environment
friendly car
Swift,
Maruti
Suzuki
Customer seeking
a powerful and
stylish car for city
driving
Powerful styling
and handling,
advanced
features
A vehicle that provides
comfort, power and luxury
in small package
Style, modern
looks and
young attitude
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3. MARUTI SUZUKI INDIA LIMITED AT A GLANCE
Maruti Suzuki started out in 1982 in Gurgaon, Haryana with a Maruti Suzuki
factory. 1st lot of Maruti cars assembled in 1983 and Maruti Suzuki 800 hit the streets. They
had a commitment to create value through innovation, quality, creativity, partnerships,
openness and learning. They alone make 1.5 million Maruti Suzuki family cars every year.
That‘s one car every 12 seconds. They provide evolutionary cars that deliver great
performance, efficiency and environment friendliness with low cost of ownership. Maruti has
14 cars with over 150 variants ranging from Alto 800 to the Life Utility Vehicle Maruti
Suzuki Ertiga.
Journey: A brief look
1. 1983- First car launched
2. November, 1984 – First MUV in India, the iconic Omni
3. December, 1985 – First off loader Maruti Gypsy was launched
4. 1990 – India‘s first luxury Sedan, Maruti 1000 was launched.
5. 1993- Premium hatchback ZEN launched
6. 1994- Esteem launched in India giving Sedan a new look
7. May, 1996 - Launched India's first 24 hour- On-road service
8. 2000- The first car company in India, to start a customer care centre
9. 2002- Suzuki Motor Corporation acquired majority stake in MUL
10. 2005 - Ranked 7th in the world by Forbes magazine
11. 2007 - MarutiUdyog Limited is renamed Maruti Suzuki India Limited
12. 2012 - Ranked no.1 in customer satisfaction for an unprecedented 13th time in a row
(JD Power Customer Satisfaction Index Study conducted in 2012)
SWOT Analysis:
Strengths
1. Market leader, highest domestic sales
2. Largest dealer network and sales and services center
3. Strong Brand Value and Customer Loyalty
4. Good technology and varied range of cars.
Weakness
1. Image of being the brand selling the cheapest cars
2. Younger generation going towards foreign brands
3. Not doing well in SUV segment
Opportunities
1. R&D on electric cars can be done
2. New Dzire from Maruti expected to do well
3. Economic growth of the company is increasing
Threats
1. Newer players entering the market
2. Increasing fuel prices
3. Substitute public transport available
SWOT
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Sales Volume Statistics:
The following charts below indicate the volume contribution of sales to Maruti year
on year and the market share in India as on August 2014. As seen from the recent data,
Maruti retains its leadership position with a whooping 46.84% of market share in passenger
car segment.
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4. HONDA CARS INDIA LIMITED AT A GLANCE:
Honda Cars India Limited (HCIL) is a leading manufacturer of premium cars
in India. It was established in 1995 with a commitment to provide Honda‘s latest passenger
car models and technologies to the Indian customers. It is a subsidiary of Honda Motor Co.
Ltd., Japan. Its first manufacturing unit was set up at Greater Noida, U.P in 1997. Its product
range includes Honda Brio, Amaze, City, CR-V. Its models are strongly associated with
advanced design and technology apart from the established qualities of durability, reliability
and fuel-efficiency. The company goes by the mission statement of maintaining a global
viewpoint, dedicated to supplying products of the highest quality, yet at a reasonable price for
worldwide customer satisfaction. HCIL has a strong sales and distribution network spread
across the country. The network includes 187 authorized dealership facilities in 121 cities.
HCIL dealerships are based on the "3S Facility" format, offering complete range of Sales,
Service and Spares services to its customers.
Journey: A brief look
1. 1995 – HCIL was first launched in India
2. 1998 – Compact Sedan Honda City Launched in India
3. 2001 – Honda Accord launched
4. 2005- Business Standard Motoring Car of the Year 2004 - Honda City
5. 2006 - Best Indian Company (unlisted) by Business Standard Group
6. 2011- 5 door subcompact hatchback, Honda Brio Launched
7. August, 2012 - he company officially changed its name to Honda Cars India Ltd.
(HCIL) and became a 100% subsidiary of Honda
8. April, 2013 – Honda Amaze launched which is a 4-door subcompact sedan.
9. July, 2014 –7-seater mini MPV, Honda Mobilio launched.
SWOT Analysis:
Strengths
1. Excellent branding, advertising and after sales service
2. High brand Equity & Brand Loyalty
3. Refined production system and powerful R&D
4. High after sale services
Weakness
1. Cost structure is high compared to others
2. Caters to upper middle segment hence limited customer base.
3. Controversies over recalling of models several times
Opportunities
1. R&D on hybrid and fuel efficient cars
2. Fast growing automobile market
Threats
1. Newer players entering the market
2. Increasing fuel prices
3. Substitute public transport available
SWOT
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5. SEGMENTATION, TARGETING AND POSITIONING BY COMPANIES
MARUTI SUZUKI INDIA : Maruti Suzuki has product offerings in almost all segments. Maruti has distinguished
itself from other competitiors in terms of superior customer satisfaction reliability,sevice
quality and accessibility, affordable and competitive pricing and intense distributuion
networks. Currently it has a market share of 47%. Maruti has consistenty maintained
leadership position in its Customer Service Index(CSI) by JD power for 14 years. This has
truly contributed to its market leadership.
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Product mix:
The following table illustrates the various product offerings of Maruti Suzuki
India. For sake of direct comparison, Utility vehicles have been classified separately. As it
can be seen from the table, Maruti Suzuki has market leadership from entry segment to C3
segment.* All prices in the report are with reference to those sold in Delhi.*
SEGMENT PRODUCT BASE PRICE POSITION IN SEGMENT
(AS ON AUG 14)
A ALTO 800,K10 241137 1
B1 WAGON R,STING RAY 348514 1
CELERIO 376385 2
B2 RITZ 423124 4
SWIFT 443208 1
C1 SWIFT DZIRE 485162 1
C2 SX4 715138 BOTTOM
C3 CIAZ UPCOMING NA
UTILITY
OMNI 245531 3
EECO 366852 5
ERTIGA 580228 6
GYPSY 542187 10
GRAND VITARA 2268064
The following chart shows the sales figures as on August 2014. As it can be
seen from the chart below, Maruti Suzuki occupies the top 4 positions. Overall it has 8
products in the top 20.
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(a) MARUTI ALTO 800:
SEGMENT - A
VARIANTS - Petrol CNG Fuel variants, Base to High – Lxi, Vxi
PRICING - 241137(Base petrol Lxi) to 352968 (Top eng CNG)
CHIEF RIVALS - Hyundai Santro, Tata Indica+Vista, Chevrolet Beat
CITY / HIGHWAY FUEL ECONOMY - 17.0 kmpl / 22.74 kmpl
ENGINE DISPLACEMENT - 796 cc
POWER - 47.3BHP@6000RPM
TORQUE - 69Nm@3500 RPM
“LETS GO” POSITIONING
TV COMMERCIAL
With the honour of being India‘s best selling car, Alto was launched in India in
September 27,2000. It was targeted at the younger generation during time of launch as the
legendary Maruti 800 occupied the leadership in the entry level segment. It had the ―Lets Go‖
campaign in 2010 where two couples on a date are shown driving the car where they develop
a sense of intimacy and trust with themselves and get closer. This was done to indicate that
people get closer with the product to develop a sense of trust and affection with the brand. In
2012, the product underwent a major change with new body and interiors. The powertrain
was retained. But the product was priced lower than the earlier variant. It also has a CNG
variant to appeal to cities like Mumbai, Delhi and offers a mileage of 30.46 KMPL.After the
production of Maruti 800 was stopped in January 2014, Maruti Alto 800 has become the
entry level offering of Maruti.
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(b) MARUTI ALTO K10 :
SEGMENT - A
VARIANTS - Petrol, Base to High – Lxi, Vxi
PRICING - 318918 (Base petrol Lxi) to 3331678 (Top end)
CHIEF RIVALS - Hyundai Eon, Tata Nano, Chevrolet Spark
CITY / HIGHWAY FUEL ECONOMY - 17.0 kmpl / 20.92 kmpl
ENGINE DISPLACEMENT - 1.0-litre 67.1bhp 12V K Series Petrol Engine
POWER - 67.1bhp@6200rpm
TORQUE - 90Nm@3500rpm
“CHASE YOUR PASSION”
TV COMMERCIAL
With an interest to tap into the potential into the growing younger generation with
potential to buy, AltoK10 was launched in India in 2010 with a new Kappa engine. Maruti
Suzuki Alto K10 is all about Performance, Energy and Zippiness whose attributes where
derived from the new powertrain with better power and driveability. The advertisement
shows a pair of young musicians who take of their in their Alto K10 and get their recording
done. Though shown as being disappointed initially, the commercial shows that their drive in
K10 helps them get energized and follow their passion. Thus the car is shown to have an
emotional connect with younger generation who are driven by their passion to achieve. K10
has been a run away success since its launch with over 3,00,000 units sold in its first three
years.
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(c) MARUTI WAGON R AND STING RAY:
SEGMENT - B1
VARIANTS - Petrol, CNG Base to High – Lxi, Vxi
PRICING - 348514 (Base Wagon R) to 455562 (Top end Stingray)
CHIEF RIVALS - Hyundai Eon, Tata Nano, Chevrolet Spark
CITY / HIGHWAY FUEL ECONOMY - 17.08 kmpl / 20.51 kmpl
ENGINE DISPLACEMENT - 1.0-litre 12V K Series Petrol Engine
POWER - 67.1bhp@6200rpm
TORQUE - 90Nm@3500rpm
“FOR THE SMARTER RACE”
“MY THING EVERYTHING”
Wagon R was the first product which had the tall boy design keeping in mind the
space and comfort requirements expected by Indian families. Though it was initially
positioned as India‘s first Multi Active Vehicle, later it was repositioned as ―For the smarter
people‖ in 2003. It was targeted at the middle and upper middle class families who were
looking for more space, comfort, reliability. Since then the product had been consistently
repositioned with respect to changing customer profiles. In 2013, Wagon R stingray was
launched as an upmarket version with the focus on enhanced styling, features etc.
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(d) MARUTI CELERIO:
SEGMENT - B1
VARIANTS - Petrol, CNG Base to High – Lxi, Vxi
PRICING - 376385 (Base) to 443641 (Top end AMT version)
CHIEF RIVALS - Hyundai Eon, Tata Nano, Chevrolet Spark
CITY / HIGHWAY FUEL ECONOMY - 19.08 kmpl / 22 kmpl
ENGINE DISPLACEMENT - 1.0-litre 12V K10B Petrol Engine
POWER - 67.1bhp@6200rpm
TORQUE - 90Nm@3500rpm
“LIFE TAKES A LEAP”
“DRIVE EASY- DIL UCHHLING”
Maruti Suzuki went about taking a huge gamble with a product having the
Automatic transmission as its key differentiator in the conservative Indian market where the
automtatic system was perceived to have lot of issues and hence higher maintenance costs. It
convinced the potential buyers by highlighting the astronomical fuel efficiency values. The
target segment was people between 33-42 years and for the families which needed a second
car predominantly driven by housewives and others where ease of drive and operation was a
necessity. Its ad campaign also focused on these features. It shows a young couple in a
Celerio and another Celerio with four young executives waiting and then moving ahead in a
traffic signal with ease. The focus was on traffic conditions in India and how the Celerio can
help the customers overcome the same without losing out on the pleasure of driving
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(e) MARUTI SWIFT:
SEGMENT - B2
VARIANTS - Petrol, Diesel Base to High – L to Z variants
PRICING - 376385 (Base) to 443641 (Top end Petrol)
CHIEF RIVALS - VW Polo, i10 Grand, Nissan Micra
CITY / HIGHWAY FUEL ECONOMY - 15.6 / 18.6 kmpl(Gas), 18.1/22.9 kmpl(Diesel)
ENGINE DISPLACEMENT - 1.2-litre 16V K Series Petrol Engine and 1.2L Diesel
POWER - 87 ps @ 6200 rpm(Petrol), 75 ps @ 4000 rpm(Diesel)
TORQUE - 110Nm@3500rpm(Petrol), 190 Nm @ 2000 rpm(Diesel)
“YOU’RE THE FUEL”
“THE NEW SWIFT-MORE SWIFT”
Launched in 2005, Swift has been a revolution in terms of its brand image and
fan following. It was a potential game changer for Maruti which targeted the higher income
younger generation which wanted a car that was peppy, stylish and a sense of ownership
pride. It took styling cues from the famous Hayabusa and was launched in 2005. It was an
instant hit. The commercials focused on young couples and friends performing various stunts
with perfect control and getting their adrenaline pumped up. The tagline ―You‘re the fuel‖
connected emotionally with the audience to go and experience the way the wanted to. It
crossed 1 million mark in sales in eight years. There have been frequent refreshes with the
latest offering focusing on more features. Despite the intense competition in the segment,
Swift has been the market leader in its segment owing to its pricing, brand image and
reliability.
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(f)MARUTI RITZ:
SEGMENT - B2
VARIANTS - Petrol, Diesel Base to High – L to Z variants
PRICING - 376385 (Base) to 443641 (Top end Diesel)
CHIEF RIVALS - VW Polo, i10 Grand, Nissan Micra
CITY / HIGHWAY FUEL ECONOMY - 14.7 / 18.5 kmpl(Gas), 18.6/23.2 kmpl(Diesel)
ENGINE DISPLACEMENT - 1.2-litre 16V K Series Petrol Engine and 1.2L Diesel
POWER - 85.80hp@6000rpm (Petrol), 73.97hp@4000rpm (Diesel)
TORQUE - 114Nm@4000rpm (Petrol), 190 Nm @ 2000 rpm(Diesel)
“JOY INSIDE”
“HOW MANY MOMENTS HAVE YOU LIVED-
LIVE THE MOMENT”
Maruti launched the Ritz in May 2009 targeting the upper end of the hatchback
segment. The car was positioned to ―Live the moment‖ and it was all about romancing the
life. The commercial features number of moments a couple and others experience while
driving and made an emotional connect with the audience to live and experience life through
the Ritz. It also offered a fantastic mileage and it was a success reaching over 2 lakh unit
sales within 2 years of its launch.
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(g)MARUTI SWIFT DZIRE:
SEGMENT - C1
VARIANTS - Petrol, Diesel Base to High – L to Z variants
PRICING - 485162(Base) to 651440 (Top end Diesel)
CHIEF RIVALS - Honda Amaze, Hyundai Xcent, Toyota Etios
CITY / HIGHWAY FUEL ECONOMY - 15.6 / 18.6 kmpl(Gas), 18.6/23.4 kmpl(Diesel)
ENGINE DISPLACEMENT - 1.2-litre Petrol Engine and 1.3L Diesel Engine
POWER - 87 ps @ 6200 rpm(Petrol), 74 ps @ 4000 rpm(Diesel)
TORQUE - 110Nm@3500rpm(Petrol), 190 Nm @ 2000 rpm(Diesel)
“LET YOUR DESIRE SHOW..”
TAXI – COMMERCIAL USE
Swift dzire was in March 2008. It was the first indeginiously developed product
for India by Suzuki. They vehicle was an extended version of Swift to make it more of a
Sedan but within 4m to benefit from the tax regulations in India. Also there was not much of
promotion in the first year and word of mouth campaign was the medium chosen. It was
backing up on the phenomenal success of Swift. Its value proposition targeting customers
who could afford and move on from a Premium hatchback but couldn‘t afford a sedan was
the key to its success. Infact the first commercial on air was an year after its launch. Swift
Dzire is also sold as a commercial segment vehicle as Taxis owing to its offering in Space,
Comfort, Fuel efficiency and reliability. Dzire has been consistently among the best sellers in
India and recently in July 2014 it was the best selling car in India.
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(h)MARUTI SUZUKI SX4:
SEGMENT - C2
VARIANTS - Petrol, CNG, Diesel Fuel Variant, Base to High–Vxi, Zxi
PRICING - 7,15,137 (Base petrol Vxi) to 9,53,823 (Diesel Zdi)
CHIEF RIVALS - Hyundai Verna, Honda City, Vento
CITY / HIGHWAY FUEL ECONOMY - 21.7 kmpl(Diesel),16.5 kmpl(Petrol), 22.1 kmpl(CNG)
ENGINE DISPLACEMENT - 1586 cc (Petrol, CNG) ,1248cc (Diesel)
POWER - 104.7 PS @5600rpm (Petrol),90 PS @ 4000 rpm (Diesel)
TORQUE - 145Nm @4100rpm (Petrol),200 Nm @ 1750 rpm(Diesel)
“NOW THAT’S A MAN”
TV COMMERCIAL
SX4 was Maruti‘s offering in the sedan segment. It had the ―Now that‘s a Man‖
campaign in 2009 where it was shown that men are back with the launch of Maruti Suzuki‘s
SX4 . This was done to show that the car is as strong as the built of a man. The Ad
consistenly featured well dressed up men resembling corporate professionals to establish a
connect with the target group. It was targeted at high income men who are the primary
decision makers with respect to purchase of cars and in the self driven office goers segment.
In 2011, Maruti came up with the diesel version of the car.The car comes with unique safety
features to give you a powerful ride, mile after mile. It is definitely, for the boys who grew up
to be men. The CNG version was introduced in August 2010.
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(i) ERTIGA:
SEGMENT - UTILITY
VARIANTS - Petrol, CNG, Diesel Fuel Variant, Base to High–Vxi, Zxi
PRICING - 580000(Base petrol Vxi) to 849000(Diesel Zdi)
CHIEF RIVALS - Innova, Honda Mobilio, TATA Sumo
CITY / HIGHWAY FUEL ECONOMY - 20.7 kmpl(Diesel),16.2 kmpl(Petrol), 22.3 kmpl(CNG)
ENGINE DISPLACEMENT - 1373 cc (Petrol, CNG),1248cc (Diesel)
POWER - 95 PS @6000rpm (Petrol), 90 PS @ 4000 rpm (Diesel)
TORQUE - 130Nm@4000rpm (Petrol), 200 Nm @1750 rpm (Diesel)
“A Feeling called LUV-Life Utility Vehicle”
Live life with LUV
Maruti Suzuki made a huge move by stepping into the MUV segment by
launching the much awaited Maruti Ertiga, a 7-seater MUV on 12th April 2012.Both the
petrol and diesel engines are the ones which has revolutionized the hatchback segment with
the most number of bookings in a single month. It had the ―A Feeling called LUV-Life
Utility Vehicle‖ campaign in 2012, where it showed that Ertiga is to enhance your lifestyle.
In June 2013, Maruti Suzuki added its Ertiga models with Compressed Natural Gas (CNG),
The Maruti Suzuki Ertiga comes integrated with a wide range of features that ensure the
safety of all occupants.
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(j) MARUTI OMNI AND EECO:
“KAMYABI KHUSHIYON SE SAJAIYE..”
AMBULANCE SERVICE
HAPPINESS FAMILY SIZE!! EECO AS AMBULANCE
Launched in 1985, the Maruti Suzuki Omni pioneered a segment in Indian
automotive industry. It has different options with 4,5 and 8seater options catering to different
needs from family to ambulance. Owing to its reliability and dependability, it is hugely
adored by its customers and it is positioned as "Kamyabi Khushiyon Se Sajaiye".
Eeco was launched after replacing the Versa model of Maruti and it was
predominantly positioned as a family vehicle. The catch phrase of ―Happiness Family Size‖
was used to communicate the positioning as a typical family vehicle. Eeco is also used in
commercial segment as Ambulance.
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(k) MARUTI GYPSY AND GRAND VITARA:
“TAKE ON THE CHALLENGES OF UNKNOWN UNCHARTERED TERRAIN..”
GRAND VITARA-PLAY IT YOUR WAY!!
Gypsy was launched as a utility vehicle primarily. Though not a market leader in
itself it is used in defence sector for select applications. Grand Vitara was a premium offering
in the luxury Sports Utility Vehicle segment. However owing to its higher price and
availability of better offerings like the Honda CRV, Pajero etc the vehicle was not a success.
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HONDA CARS INDIA :
Honda Cars India Ltd. (HCIL) is a subsidiary of the Honda of Japan for the
production, marketing and export of passenger cars in India. Having inherited the legacy of
an automobile manufacturer that is known around the world for its cutting edge technology
and futuristic designs, Honda India has excelled in bringing the best tools and technologies in
the cars that it offers in the country's market. The company's total investment in its
production facilities in India as of 2010 was over INR16.2 billion. Honda has152 dealerships
across 98 cities in 20 states and 3 Union Territories of India. It sold 55,884 units during the
period between April 2009 and February 2010 as against 45,052 units during the same period
a year ago, recording an increase of over 24%.
Product mix:
The following table illustrates the various product offerings of Honda India. For sake
of direct comparison, Utility vehicles have been classified separately. As it can be seen from
the table, Honda has gained a lot market due to AMAZE and is place among the top segment
as compared to others.
SEGMENT PRODUCT BASE PRICE POSITION IN SEGMENT
(AS ON AUG 14)
B2 BRIO 410000 9
C1 AMAZE 541000 2
C2 CITY 726000 BOTTOM
D2 CRV 2025000 9
UTILITY MOBILO 649000 NA
From 2012,Honda started offering products at low cost and features that appeal to
Indian customers like space, comfort, reliability and low cost of ownership. The strategy has
worked in figure as Honda has managed to turn its fortunes . Currently Honda is the third
largest manufacturer of cars based on sales volume.
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(a) HONDA BRIO :
SEGMENT - B2
VARIANTS - Petrol, Base to High – E MT, VX AT
PRICING - 410000(Base petrol E MT) to 600000 (VX AT)
CHIEF RIVALS - Toyota Etios Liva, Ford Figo, Maruti Suzuki Ritz
CITY / HIGHWAY FUEL ECONOMY - 16.5 kmpl / 19.4 kmpl
ENGINE DISPLACEMENT - 1198 cc
POWER - 88PS @ 6000rpm
TORQUE - 109Nm @ 4600rpm
“IT LOVES YOU BACK”
“LOVE MY BRIO”
The Honda Brio is a five-door subcompact hatchback produced by Honda in
India, Thailand and Indonesia. The car was introduced in 2011.The name Brio means
energetic and cheerful in Italian. The car is developed to position in a class below Honda
Amaze for emerging markets. It had the ―Loves you back‖ campaign in 2011 where it was
shown even if your girlfriend ditches you or stops loving you, but Honda Brio will love you
back unconditionally. This was done to indicate that people get closer with the product to
develop a sense of trust and affection with the brand.As Love is always about protecting your
loved ones,hence the Brio asserts its love for you with a range of enhanced safety features
when it comes to safety. Honda BRIO‘s 1.2L advanced i-VTEC (intelligent Variable Valve
Timing and Electronic Lift Control) engine delivers high power output at an impressive fuel
economy.
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(b) HONDA AMAZE :
SEGMENT - C1
VARIANTS - Petrol and Diesel, Base to High – E, VXAT
PRICING - 541000(Base petrol E) to 820000 (VXAT)
CHIEF RIVALS - Maruti Suzuki Dzire, Hyundai Xcent
CITY / HIGHWAY FUEL ECONOMY - 16 kmpl / 19 kmpl (Petrol), 22 kmpl / 25 kmpl (Diesel)
ENGINE DISPLACEMENT - 1198 cc (Petrol)/ 1498cc (Diesel)
POWER - 88 PS @ 6000 rpm (Petrol)/ 100 PS @ 3600 rpm (Diesel)
TORQUE - 109 Nm@4500 rpm(Petrol)/200 Nm@1750 rpm (Diesel)
“ORDINARY IS OUT..AMAZING IS IN”
“HONDA AMAZE CHANGES YOUR
WORLD”
The Amaze is the sedan version of the Brio. Honda launched the Amaze in India on
April 11, 2013. The Amaze is available in petrol and diesel engine.The Amaze was a
significant step for the company in India as it will be its first diesel car in India.It had the
―honda amaze changes your world‖ campaign in 2013 where it was shown that honda amaze
gives you some much advanced features that it would change your life and you would find
reasones to drive it. This shows that Honda is looking to connect emotionally with the
consumers to create awareness. The diesel car have a 1.5L i-DTEC Engine. This 1.5 L
engineering marvel is the lightest engine in its category ,that enables greater reduction in the
overall weight of the vehicle, and a much lower burden on the engine.
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(c) HONDA CITY:
SEGMENT - C2
VARIANTS - E, VX, SV (Petrol/Diesel)
PRICING - 410000(Base petrol E MT) to 600000 (VX AT)
CHIEF RIVALS - Maruti Ciaz, Hyundai Verna, VW Vento
CITY / HIGHWAY FUEL ECONOMY - 22.0 kmpl / 25.1 kmpl
ENGINE DISPLACEMENT - 1498cc(Diesel)
POWER - 98.6bhp@3600rpm
TORQUE - 200Nm@1750rpm
“THE GREATER DRIVE”
TV COMMERCIAL
The Honda City is a four-door sedan produced by Honda in India, Thailand and
Indonesia. The car was introduced in 1982 as a sub-compact car but later on went on through
a period of transitions and became a sedan. The car is positioned as an affordable car for the
emerging and rapidly growing upper middle class. The ad campaign primarily focussed on its
luxuriousness and its ability to remain attainable to those who work hard.―The greater drive‖
tries to unify the core concepts of industry and elegance, and focuses on those people who are
willing to work hard and do great good to your life. This philosophy of the ad resonates in
unison with aspirations and struggles of middle class and upper middle, and henceforth the
connection.
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(d) HONDA CRV:
SEGMENT - D2
VARIANTS - 2WD, 2WD AT, 4WD AT
PRICING - Rs. 20,70,000 - Rs. 25,00,000
CHIEF RIVALS - Ford Escape, Hyundai Santa Fe, Nissan Rogue
CITY / HIGHWAY FUEL ECONOMY - 12 kmpl / 17 kmpl (Petrol)
ENGINE DISPLACEMENT - 2499 cc
POWER - 185 @ 7000
TORQUE - 163 @ 4400
“IMPOSSIBLE MADE POSSIBLE”
TV COMMERCIAL
The Honda CR-V is a compact SUV (now called crossover in North America),
manufactured since 1995 by Honda. It was loosely derived from the Honda Civic. There are
discrepancies as to what "CR-V" stands for. Honda sales literature in UK reportedly made
references to "Compact Recreational Vehicle" (Ref: Wikipedia). The ad primarily focusses
on the car‘s image of being impossible to craft. The company wants to project it as a work of
art and technical genius never seen before. The primary target audience would be the
corporate people who‘ve got high purchasing power. The product is positioned as a complete
product for the elite.
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(e) HONDA MOBILIO:
SEGMENT - UTILITY
VARIANTS - Petrol,Diesel
PRICING - Rs. 6,49,000 - Rs. 11,54,996
CHIEF RIVALS - Maruti Ertiga, Toyota Innova, Mahindra XUV
CITY / HIGHWAY FUEL ECONOMY - 13.8/17.3(Petrol), 18.3/24 kmpl (Diesel)
ENGINE DISPLACEMENT - 1500c
POWER - 118bhp@6600rpm(Petrol),98.63bhp@3600rpm(Diesel)
TORQUE - 145Nm@4600rpm(Petrol),200Nm@1750rpm(Diesel)
“APNE LIYE..APNO KE LIYE”
“THAT’S MY RIDE”
The Mobilio is based on the same Brio platform. Mobilio is targeted at the growing
utility segment targeting families with over 5 people. The tag line ―Apne Liye..Apno Ke
Liye‖ is intended to convey the same message. The advertisement features a family of seven
people. They look at the car and sing a song, with a reason as to why the car is for them.
While everyone says some reasons like ‗bachatwali car‘ (money-saver car), wanting to
include it in every plan, the family head confesses at the end that he bought the car for
himself. The family of seven are seated comfortably inside and on ‗their ride‘. Thus it
establishes an emotional connect to appeal to large sized families especially joint families.
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6. FUTURE PRODUCTS :
MARUTI SUZUKI :
Maruti is yet to make a mark in the sensational hot market of Compact SUVs. It
has lined up the SX4 cross to challenge the likes of Ford Ecosport, Renault Duster. It has also
planned to launch a sedan in premium segment called Ciaz to replace the Maruti SX4. Both
the products were unveiled in the Auto expo on Sep14,2014.
SX4 CROSS OVER CIAZ
HONDA CARS INDIA LIMITED:
Honda India has just launched the Mobilio and has lined up the modified Jazz to
make a splash in the competitive compact SUV segment. The earlier modelof Jazz was an
exciting offering with unique and attractive styling, comfortable and feature rich. But it was
affected by its poor pricing strategy. Honda withdrew the model owing to its losses. Now the
revitalised model of Jazz is set to make its comeback.
ALL NEW HONDA JAZZ
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7. WHAT THE LEADERS SAY:
MARUTI SUZUKI:
1. “Maruti to retain focus on small cars for growth in India says MD & CEO, Kenichi
Ayukawa” – Economic Times, July 20,2013.
(a) Maruti Suzuki has maintained its leadership position despite increased global competition.
What's your role in shaping the Indian subsidiary?
As the industry leader we try to protect our position and take on the challenges thrown to us. The
Indian market is changing and getting highly competitive with virtually every global carmaker present
here. We have managed to maintain our leadership even as our global peers like Honda, Toyota or
Volkswagen have tried to increase their market share. We have the advantage of huge reach in both
sales and servicing.
(b) Maruti Suzuki has primarily been a petrol carmaker with exception of Fiat-licensed 1.3 litre
diesel engine. Do you plan to develop in-house diesel technology to tap the increasing demand
for diesel-powered cars?
We have a single diesel engine borrowed from Fiat that has proved to be a roaring success. Going
forward as we get into new segments and launch different vehicles, we would need diverse
technology for diesel and other alternate fuels. A huge capital investment is required for development
and production. There are some thoughts, but it would be difficult to commit by when we can
implement that.
(c)For the past three years, Maruti Suzuki has been trying but finding it tough to penetrate the
million-mark in domestic sales. How do you plan to stimulate sales?
It is right. Sales have not grown in the past few years. Our peak domestic sales were in 2010. We have
not been able to breach that even though we maintained our market share consistently around the 40%
mark. We would be working on new products, especially small cars, to grow our share in the Indian
market. Despite the current slowdown, we expect Indian market to touch 4-million mark by 2016 and
Maruti sales should go beyond 1.6 million in the same period.
(d) Labour troubles have also impacted Maruti Suzuki performance in the past. Any labour-
related strategy on your agenda?
It has been a sad case of miscommunication with our work force that led to such perennial problems
in the past two years. We are trying to improve communication with the workers as well as carry out
definitive changes in the Manesar plant. In the absence of a regular union, an interim representative
body of workers has been established to improve information flow and open new channels with the
workers. In case our workers want to switch to a regular union, the company would welcome and
support the move.
(e)Intermittent labour strife has caused frequent disruptions and production shutdowns. How
do you plan to take the profitability issues in the light of slowing market and increasing
competition?
My responsibility is to enhance the Indian business. There has been some improvement in the past
few months, but that got diluted by fluctuating currencies which are beyond my control. Going ahead,
we expect the Indian market to catch momentum and reach 4-5 million-sales mark, which would help
us to fully utilize our facilities and maximise scope of Indian operations. Also, the government needs
to pitch in with more measures for the industry to turn around faster.
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2. “Maruti Kicks off Auto Expo with Two 'Futuristic' Launches: SX4 S-Cross, Ciaz” –
Forbes India, September 14, 2014
The Auto Expo 2014 kicked off on Wednesday with Maruti Suzuki—the country's largest
passenger carmaker—launching two futuristic models, the SX4 S-Cross, a crossover model
of the current SX4, and the sedan Ciaz.
―The SX4 S-Cross and Ciaz are models to expand our product range in future,‖ said Maruti
Suzuki India Managing Director and CEO Kenichi Ayukawa.
Parent firm Suzuki Motor Corp‘s executive vice-president T Suzuki said the two new cars
were aimed at meeting the growing demand of sedans in India, China and elsewhere. But
officials have declined to specify when the new cars would be available in showrooms.
The SX4 S-Cross offers various driving modes for better performance and safety and hopes
to compete with the Mahindra XUV. The Ciaz, which has a sporty look, is being introduced
to compete with Hyundai‘s Verna and Honda‘s City.
Maruti‘s Ayukawa was optimistic about the future despite slowing sales. ―The automobile
market in India is on a slowdown,‖ he said, but added that he was hopeful of matching the
annual sales of the last fiscal. Maruti clocked sales of around 10.6 lakh units in the domestic
market in the year ending March 2013.
Ayukawa further said: ―In the last 30 years, we have sold 12 million cars but still just touched
just one percent of the population. We have along way to go.‖
The much talked-about Maruti hatchback, the Celerio, was kept under wraps on the first day.
Maruti expects the Celerio to change the way Indians drive with a special automatic gearbox.
Based on promotional model, the Celerio is also expected to carry a Bluetooth-enabled audio
system, steering-mounted controls for audio, manual aircon, more rear leg room and dual
tone interiors and blinkers on door mirrors.
The Auto Expo comes at a time when carmakers are battling declining sales for several
months, as sluggish economic growth, higher fuel costs and interest rates have pushed
potential buyers to delay their purchases.
India‘s car sales fell almost 10 percent year-on-year in 2013, the first decline for 11 years,
according to data from the Society of Indian Automobile Manufacturers. Annual domestic car
sales, seen as a pointer to overall economic health, fell to 1,807,011 units in 2013 from
1,998,703 in 2012, according to SIAM.
But the Forbes India team believes that the mood at the Expo is of optimism. Most of the
companies are hopeful that the economy will start to turn around and the good times will roll
again soon.
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HONDA CARS INDIA LIMITED:
1. Our counter-attack has started- President and CEO, Honda Cars India – The
Hindu,July8,2013
President and CEO of Honda Cars India Ltd. Hironori Kanayama has had a difficult year ever since
he took up his post. The car-maker has seen its market share nearly halve over the last five years after
a series of mis-steps, the most prominent being not having a diesel model. A year later, however, Mr.
Kanayama believes he is ―reaping the benefits that were sowed by his turnaround strategy.‖ With the
newly-launched Amaze sedan now counting for nearly 50 per cent of the company‘s sales in India, the
car-maker‘s counter-attack has just begun.
(a)How have the last 12 months been for both you and Honda Cars India?
It has been amazing for me. Since I reached India last April, difficulty has surrounded us — difficulty
like the depreciation of the rupee. As you can imagine, this has increased our import costs. Besides
this, we only had petrol models in the market. So, when petrol prices increased, it affected our
operations tremendously. Therefore, in the last few years, we have been focusing on the development
of diesel models, starting with the Amaze.To reduce the influence of the exchange rate fluctuation, we
had to accelerate localisation. In fact, in some models we have achieved around 90 per cent
localisation. Basically, in the last few years, we started sowing the seeds of development. What you
see now is us starting to reap some of those benefits.
(b)Is it Honda’s India strategy to lag slightly behind the curve, in terms of coming out with new
products such as a diesel model or a compact SUV, and watch how your competitors do first?
Our strategy, globally, is to bring out whatever model the customer would like to have. We don‘t
really adopt the ‗wait and watch‘ model that you are referring to. From an India stand point, it seems
like that we have taken such an action. This is more because of how different our company‘s history is
when compared with others.
Most of you compare Japanese manufacturers, mainly Suzuki and us. Honda mainly went into
advanced markets such as the U.S. and Europe, and in some of these markets, the ratio of diesel to
petrol cars is almost negligible. Therefore, we focussed only on petrol engine models, especially in
the last ten years. The global trend has also curved towards more eco-friendly technology. In fact, this
is where we are the best.
On the other hand, you take Suzuki. They focussed on the Indian customer market… they decided not
to compete with other Japanese manufacturers like us. They started operations 30 years ago, and
pulled off a great success. Therefore, it isn‘t surprising that Suzuki makes diesel models which are a
great hit here.The characteristics of the Indian market are unique. Nearly 50 per cent of cars sold are
diesel. Nearly 50 per cent is in the hatchback range, and so on. We are used to bigger engines and
petrol models. Now that we have started focusing on the Indian market, we will study all segments
that will be accepted by our customers. Our counter-attack has just started!
( c)How important is India for you in your global strategy?
Well, look at this way. Honda has sold about 4 million cars globally in the last fiscal, which ended
this March. Our President has announced that this will be increased up to 6 million in the fiscal year
ending March 2017. And, the increase comes from emerging markets, which include India. Therefore,
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in that sense, the contribution of the Indian market to Honda‘s global strategy will be increased
tremendously.
(d)India is a growing country for now, but there is fast deceleration. Does this worry you?
History has proven that there is no market that grows permanently. Japan and China are classic
examples of this. The speed of growth has come down. But this does not mean the Chinese or
Japanese market has disappeared! While there may be some fine-tuning going on in India, I‘m sure it
will pick up.But yes, in the short-term, this is a slight concern. However, our management strategy
cannot be formulated based on a short-term view of the economy. We need huge investment to
succeed here. If we worry about the short-term view, we will never be able to invest here.
(e)Do you think the Indian market has attained a certain level of maturity?
I don‘t think you should say maturity. You should say progress. See, the number of cars on the road is
around 25 million or 26 million, including commercial vehicles. This is just 2 per cent against the
population. In Japan, it is around 75 million, and that too Japan has one-tenth of the population of
India.
Therefore, it is not about right or wrong, but more about the development stage. As the economy
grows here, the ratio will increase. More customers will be exposed to the ‗car experience‘. In due
course, the same will happen in China.In Japan, in the 1960s, people longed for owning a car. It is no
longer like that now! Buying a car has become like buying a bicycle in Japan! But here in Chennai,
here in India, this is different. Owning a car here is proof of social status. Therefore, we have to
respect such sensibilities. We want to inculcate the pride of owning a ‗Honda‘ car here…we don‘t
want to just provide customers with the convenience of mobility.
(f)But why can’t countries like India leapfrog to electric? You can’t have ten out of every
hundred people driving a car here. It would cause an environmental disaster.
The electric car, or EV, has many disadvantages and advantages. The first big thing is that it costs, it
costs big time. Second, you need charging stations. You get less mileage.
It is said that those cars need to replace their batteries every few years as well. These are simple facts.
Yes, it is true that people in Beijing are suffering from air pollution. They definitely want electric cars
— but they don‘t want to have to ‗pay‘ for it with all these disadvantages. Similarly, Indian people are
very fuel-efficiency conscious. The bottom line is whether it pays for them to drive an electric car.
Most importantly though, we should not mix the fact there are environmental problems and that
simultaneously there is potential for greater penetration of cars. We manufacturers cannot solve
environmental problems on our own. The government must do something as well. In Japan, for
instance, hybrid car sales are around 10-20 per cent. This is because the Japanese Government has
subsidised such eco-friendly cars!
We do need to reduce exhaust from the cars. At Honda, we are developing such technologies — the
fuel cell car, for instance. This type of car exhausts only water. But, of course, it costs a lot, and we
are struggling to reduce the cost. It is quite eco-friendly, it has no CO2 and no NOX at all.
The final problem is that in India, for EVs, how do you produce electricity? At the generation stage,
you produce a lot of CO2. All you are doing is shifting the place of pollution!
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(g)In the industrial belts of Delhi and NCR, industrial relations are getting worse. Does this
worry you? What kind of strategies does Honda have in place?
Well… do you know that I once served in the Honda union? I was a full-time union officer for six
years. I think that the mental gap or the mental barrier between the management and the
associates/employees are the major cause of all labour disputes.
We, at Honda, have a philosophy that is called ‗respect for the individual‘. One of its meanings is
respecting the gender, educational background, and nationalities of all employees. Honda will give
equal opportunity to all people, regardless of any of those characteristics.I am trying to materialise
such a way of thinking here in India. For the last one year, I have direct communication with my
associates/employees. It is the little things that matter. For instance, in office, we all wear the same
white union uniform.
We all use the same canteen…half of the week. I even eat Indian food! During Diwali time, we all
celebrate together. I even once played guitar in the presence of all the employees and their families!
There is no reason that management and associates/employees should be enemies. It doesn‘t help us.
The common objective is the development of the company. At the end of the day, everybody wants
higher wages, job security, and the pride of working in a specific company. However, without
company development, none of this can be realised. Therefore, all of us are working towards the same
target.
Another major concern in the Indian market is the interest rates. How does this alter your strategy, as
most Indian car buyers are EMI-financed buyers.Well, of course, high interest rates are the major
cause of the recent de-growth in the car market. Therefore, we really hope that the economy will pick
up soon. But, as you may know, the market has de-grown by around 10 per cent. And, it has lost
growth for the last seven months. But for the last fiscal year, we grew nearly 35 per cent. This is at a
time when the market is de-growing. Therefore, even if the economy is sluggish, it does not mean that
the market has disappeared. It is just a matter of the speed of the growth.
Therefore, whatever the market is, what we have to do is provide the customers with the most
attractive models with best-in-class service.
(h)Why is Honda not actively looking at India as an export hub?
If India has more FTAs [with ASEAN countries], there is a possibility that we will export more cars.
However, that said, our forecast for the domestic market is not export. We believe in the potential of
the Indian market, and we want to commit to it.
Furthermore, Honda has many factories all over the world. It is only in Africa and the Middle-East
that we don‘t have. India is our closest factory to this. On the other hand, we have even exported cars
from Thailand. So, whenever there is room to export, we will. Our basic strategy, however, is
focusing on the domestic market. It is our philosophy that we want to prove ourselves in this market. I
don‘t want to say that India does not have export potential. It does have. But we first want to have a
stronger presence here… that will be our first mission.
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