bluebook of maruti suzuki
TRANSCRIPT
“Create Blue Book for the used car
Business”
Presented By: Akash Gupta
About CompanyEstablished in 1981
Maruti Suzuki India Limited, commonly referred to as Marutiand formerly known as Maruti Udyog Limited, is anautomobile manufacturer in India. It is a subsidiary ofJapanese automobile and motorcycle manufacturer SUZUKI.
Originally, 74% of the company was owned by the Indiangovernment, and 26% by Suzuki of Japan. As of May 2007,the government of India sold its complete share to Indianfinancial institutions and no longer has any stake in MarutiUdyog.
Maruti 800 till 2004, was the India's largest selling compactcar ever since it was launched in 1983.
Today, Maruti Suzuki alone makes 1.5 million cars every year.That’s one car every 12 seconds. It has manufacturing plantsat GURGAON and MANESAR.
The core value of the company is CUSTOMER OBSESSION.
HATCHBACK :
• ALTO 800
• ALTO K10
• WAGON R
• CELERIO
• STINGRAY
• RITZ
• SWIFT
VANS :
• OMNI
• EECO
SEDAN :
• SX4
• DZIRE
SUVs/MUVs :
• ERTIGA
• GAND VITARA
• GYPSY
About Products
MANAGING DIRECTORKenichi Ayukawa
CHAIRMAN OF THE BOARDR.C Bhargava
DavinderBrar
OsamoSuzuki
PallaviShroff
AmalGanguli
ManvinderBanga
DIRECTORS
ORGANIZATION STRUCTURE
Objective of the StudyMy objective was to see the functioning of
different websites, how do they evaluate the
price of pre owned cars and to create my
own Blue Book Data Base for Maruti Suzuki
India Limited.
Research Methodology• First I analyzed the online sites like Indian
Bluebook, Kelley’s Blue Book, how they do
calculate the price of pre owned cars.
• Second step was I did dealer survey.
• Then I analyzed the data and found out the
process of evaluation of pre owned cars.
Process of evaluationStep one: GATHERING THE VEHICLE INFORMATION
• The first step in valuing a used car requires some investigation. This is the objective part of the equation, and it is not difficult.
• Before you begin, you will need the six following pieces of information to properly value a used car:
• Year – The model year of the vehicle (this is not necessarily the year the car was manufactured!).
• Make – The brand of the vehicle (Honda, Chevrolet, Ford, etc…).
• Model – The name of the vehicle (Accord, Lumina, Explorer, etc…).
• Trim Level – The options package (LX, Touring, Eddie Bauer, etc…).
• Options – The optional items and packages (ABS brakes, DVD player, Sport Package, etc…).
• Mileage - The current number of miles on the vehicle as read from the odometer.
Step Two: Evaluating the Vehicles Condition
Next, we have to evaluate the condition of the vehicle. This is subjective, but I have included some simple benchmarks to make this evaluation easier. Keep in mind that most vehicles will fall under the “Good” or “Fair” categories:
Excellent – The used car is in perfect mechanical condition. The exterior is in “showroom condition,” meaning it is free of dings, dents, and body damage. The interior carpets and upholstery are clean and lack stains or burns. The tires match, and have significant tread remaining.Good – The used car may have a few minor mechanical or electrical problems. The exterior is clean, with only minor door dings and scratches from routine wear-and-tear. The vehicle should be nearly rust-free. The interior carpets and upholstery will show minor wear with slight staining on the carpets. The tires will match, but their remaining tread life will be short.Fair – The used car will have several mechanical and electrical problems, but the engine runs and the vehicle can be driven. The exterior will have dings, scratches, and dents that will have to be repaired by professional. There may be rust on some body panels. The tires may not match, and their tread life will be limited. (Most vehicles more than five years old that are still driven daily fall under this category.)Poor – The used car will have severe mechanical problems, and may not runproperly. The exterior will be damaged, and there will be extensive rust. The tireswill be mismatched, and in need of replacement. A vehicle with a “branded title”(salvage, flood, etc.) will fit into this category.
Step Three: Establish Pricing LevelsThe best way to value a used car is to establish at least a few pricing levels, and then arrive at a balanced price. In this situation, we are trying to determine the value at which the used car will sell in the local region. This is commonly called the “Fair Market Value.”Step Four: Placing a Value on the VehicleThe hard work is over! We now have all of the information we need to place a value on the used vehicle.Let us use a three-year-old Infiniti as an example:2004 Hyundai Santro (1, 00,000 miles)• Kelley Blue Book Value ---- Rs.65,000• Auto Trader Value ---- Rs. 66,000• Indian Blue Book Value ---- Rs. 64,900• Cartrade Value ---- Rs. 68,400The Auto Trader values will carry more weight, as those represent actual asking prices. The Kelley Blue Book price serves as a "checks and balances" reference point.Quite simply, if you average those four numbers together, you arrive at 66,075. Since most people will expect a discount when they buy a used car, let us round the number up to an even 66,000.
Depreciation Based on Vehicle Mileage
Depreciation Based on Vehicle Age
Impact of colour
PROMO SCHEME
40%
34%
13%
13%
30%
50%
16%
4%
5%
14%
66%
15%
0%
4%
25%
71%
0% 10% 20% 30% 40% 50% 60% 70% 80%
Deduct 20000-30000
Deduct 15000-20000
Deduct 10000-15000
Deduct less than 10000
On the basis of new car promo scheme If there is a discount scheme of less than 30000
On the basis of new car promo scheme If there is a discount scheme of 30000-50000
On the basis of new car promo scheme If there is a discount scheme of 50000-100000
On the basis of new car promo scheme If there is a discount scheme of more than 100000
Market Demand Of Used Cars
0%
5%
10%
15%
20%
25%
30%
35%
40%
Less than 1 lakh 1-2 lakh 2-3 lakh 3-5 lakh 5-10 lakh More than 10
lakh
Nu
mb
er o
f p
eop
le
Price Range
Market Demand of Used cars
Number of people
Effect of Vehicle Insurance
-2.00% -1.50% -1.00% -0.50% 0.00% 0.50% 1.00% 1.50% 2.00% 2.50%
Yes
No
Effect of Vehicle Insurance
Price
Valuation Based On Owners
0%
20%
40%
60%
80%
100%
Single Handed
Second Owner
Third Owner
More than third
100%
80%
65%
50%
Valuation Based On Owners
Competitors of MarutiTrue Value
• Hyundai Advantage
• Tata Assured
• Ford Assured
• Mahindra First Choice
• Toyota You Trust
• Honda Auto Terrace
• Olx.in
• Quikr.com
Liquidity in the market
0
5
10
15
20
25
Maruti Hyundai Honda Chevrole
t
Tata Volkswa
gen
Skoda Fiat Ford Mahindr
a
Toyota
Days 17 17 22 21 21 21 23 20 18 23 23
Nu
mb
er o
f d
ays
Liquidity in the market
PORTER’S FIVE FORCES MODEL
Threat from the new players: Increasing
• Most of the major global players are present in the Indian market; few more are expected to enter.
• Financial strength assumes importance as high are required for building capacity and maintaining adequacy of working capital.
Rivalry within the industry: High
• There is keen competition in select segments. (Compact and mid-size segments).
• New multinational players may enter the market.
Market strength of suppliers: Low
• A large number of automotive components suppliers
• Automotive players are rationalizing their vendor base to achieve consistency in quality
Market strength of consumers: Increasing
• Increased awareness among consumers has increased expectations. Thus the ability to innovate is critical
• Product differentiation via new features, improved performance and after-sales support is critical
• Increased competitive intensity has limited the pricing power of manufacturers
Threat from substitutes: Low to medium
• Consumer preference is changing (Mini cars are being replaced by compact or mid-sized cars)
• Setting up integrated manufacturing facilities may require higher capital investments than establishing assembly facilities
• India is also likely to increasingly serve as the sourcing base for global automotive companies, and automotive exports are likely to gain increasing importance over the medium term
• competition is likely to intensify in the SUV segment in India following the launch of new models at competitive prices
SWOT Analysis of Maruti
STRENTHS
• Good Product Portfolio
• Japanese Management practices
• After sale services
• Distribution
• Strong Brand Value
• WEAKNESS
• Still depends upon SUZUKI COPORATION
• 10% components are manufactured outside India
• Still considered as poor man’s brand.
• Low interior quality.
• Not proved itself in SUV segment.
OPPORTUNITY
• LPG version of Wagon-R
• Can start R&D on electric cars.
• Other companies lacks economy of scale
• Rising demand
• Untapped rural market
• THREAT
• Numbers of new Technology driven players and manufactures are in market
• Reduction in subsidies by government on petroleum products
• Changing environmental and emission norms
• Higher local taxes
Outcome of the project• The project aims at calculating the current market
price of the used car.
• The car market segment is widely open for
innovativeness and creativity. In such scenario,
people want to sell the old car and buy the new
one. But due to unorganized and untrustworthy re-
sale market, people hesitate to sell off their car.
• Thus, this project provides a platform to the car re-
sellers to get the true and fair deal of their car.
• The sellers feel satisfied as their car gets a proper
deal as well as the company also gets the business
of re-sold cars back again.
• This project will create a win-win situation at both
the ends.
ConclusionPetrol Car Valuation Grid
Up to 12,000
Km
12,000 -
25,000
25,000 -
35,000
35,000 -
48,000
48,000 -
60,000
60,000 -
75,000
75,000 - 1 Lac
Km
1 Lac - 1.2
Lac
Within 6 Months 85% 80%
6 Month - 1 Year 80% 75%-80% 75%
1 yr - 2 yr 75%-80% 70%-75% 65%-70% 65%
2 yr - 3 yr 65%-70% 60%-65% 60%-65% 60%
3 yr - 4 yr 65% 60% 55%-60% 55% 50%-55%
4 yr - 5 yr 55%-60% 50%-55% 50% 45%-50% 40% - 45%
5 yr - 7 yr 50%-55% 40%-50% 40%-45% 40% 33%
7 yr - 8 yr 40%-45% Up to 40% 35% 30%-35% 30% 20-25%
8 yr - 10 yr 30-35% 28%-30% 25%-30% 20% - 25% 18% - 20%
10 yr - 14 yr 20-25% 20-25% 20% 15% - 18% 10% - 15%
>= 15 yrs 10% 7% 5% 3-5%
ConclusionDiesel Car Valuation Grid
Up to 15,000 Km 15,000 -
30,000
30,000 -
50,000
50,000 - 70,000 70,000 - 1 Lac 1 Lac - 1.5 Lac 1.5 Lac +
Within 6 Months 85% 80%
6 Month - 1 Yr 80% 75%
1 yr - 2 yr 75% 70% 65% - 70%
2 yr - 3 yr 60% - 70% 60% - 65% 55% - 60%
3 yr - 4 yr 50% - 60% Up to 50% 45-50%
4 yr - 5 yr Up to 50% Up to 50% Up to 40% Up to 40%
5 yr - 7 yr Up to 40% Up to 35% Up to 35% Up to 30%
7 yr - 8 yr Up to 30% Up to 30% Up to 25% Up to 25%
8 yr - 10 yr Up to 25% Up to 25% Up to 20% Up to 15%
10 yr - 14 yr 15% - 17% 10% - 15% Up to 10%
>= 15 yrs 7-10% 4%- 7% 3-4%
Limitations• Change in demand and supply factor due to
macroeconomic condition.
• Fluctuations in resale value of the product in view of
seasonality.
• The study is based on NCR market.
• The study covered resale value of the product up to
10 years.
• It does not cover international models.
• The study does not account for valuation of the
accessories of the car.
Recommendations• Price grid concluded to be referred by evaluators
of the dealership while valuing used car.
• MSIL can refer to P&L of the dealers based on price
grid.
• Dealers can quote price to the customer instantly.
• ERR of wrong pricing by the dealer to the customer
will be eliminated.
• Thereby loss incurred by the dealer on exchange
can be eliminated.
Learnings• To calculate the value of pre-owned cars.
• How to interact with dealers and customers.
• Functioning of websites who purchase and sale pre-
owned cars.
• Conducting survey.
• Saw the corporate culture of Maruti.
• Learnt to work in team.