maruti suzuki is india

8/7/2019 maruti Suzuki is India

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aruti Suzuki is India's number one leading automobile manufacturer and the

market leader in the car segment, both in terms of volume of vehicles sold and

revenue earned. Until recently, 18.28% of the company was owned by the Indian

government, and 54.2% bySuzuki ofJapan. The BJP-led government held

an initial public offering of 25% of the company in June 2003. As of 10 May 2007,

Govt. of India sold its complete share to Indian financial institutions. With this,

Govt. of India no longer has stake in Maruti Udyog.

Maruti Udyog Limited (MUL) was established in February 1981, though the

actual production commenced in 1983 with the Maruti 800, based on the Suzuki

Altokei carwhich at the time was the only modern car available in India, its only

competitors- the Hindustan Ambassadorand Premier Padmini were both around

25 years out of date at that point. Through 2004, Maruti Suzuki has produced

over 5 Million vehicles. Maruti Suzukis are sold in India and various several other

countries, depending upon export orders. Models similar to Maruti Suzukis (but

not manufactured by Maruti Udyog) are sold by Suzuki Motor Corporation and

manufactured in Pakistan and otherSouth Asian countries.

The company annually exports more than 50,000 cars and has an extremely

large domestic market in India selling over 730,000 cars annually.Maruti 800, till

2004, was the India's largest selling compact car ever since it was launched in

1983. More than a million units of this car have been sold worldwide so far.

Currently, Maruti Suzuki Alto tops the sales charts and Maruti Suzuki Swift is the

largest selling in A2 segment.

Due to the large number of Maruti 800s sold in the Indian market, the term

"Maruti" is commonly used to refer to this compact car model ("Maruti" is another

name of the Hindu god, Hanuman).

Maruti Suzuki has been the leader of the Indian car market for over two decades.

Its manufacturing facilities are located at two

facilities Gurgaon and Manesarsouth ofDelhi. Maruti Suzukis Gurgaon facility

has an installed capacity of 350,000 units per annum. The Manesar facilities,

launched in February 2007 comprise a vehicle assembly plant with a capacity of

100,000 units per year and a Diesel Engine plant with an annual capacity of

100,000 engines and transmissions. Manesar and Gurgaon facilities have a

combined capability to produce over 700,000 units annually.
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More than half the cars sold in India are Maruti Suzuki cars. The company is a

subsidiary of Suzuki Motor Corporation, Japan, which owns 54.2 per cent of

Maruti Suzuki. The rest is owned by public and financial institutions. It is listed on

the Bombay Stock Exchangeand National Stock Exchange in India.

During 2007-08, Maruti Suzuki sold 764,842 cars, of which 53,024 were

exported. In all, over six million Maruti Suzuki cars are on Indian roads since the

first car was rolled out on 14 December 1983.

Maruti Suzuki offers 15 models, Maruti 800,Alto, WagonR, Estilo, A-

star, Ritz, Swift, Swift DZire,SX4, Omni,Eeco, Gypsy, Grand Vitara. Swift, Swift

DZire, A-star and SX4 are manufactured in Manesar, Grand Vitara is imported

from Japan as a completely built unit (CBU), remaining all models are

manufactured in Maruti Suzuki's Gurgaon Plant.

Suzuki Motor Corporation, the parent company, is a global leader in mini and

compact cars for three decades. Suzukis technical superiority lies in its ability to

pack power and performance into a compact, lightweight engine that is clean and

fuel efficient. india's no 1 vechil maruti suzuki i like the most negi Nearly 75,000

people are employed directly by Maruti Suzuki and its partners. It has been rated

first in customer satisfaction among all car makers in India from 1999 to 2009 by

J D Power Asia Pacific.[3]

Further information: Timeline of Maruti Suzuki

Partner for the joint venture

Sanjay Gandhi owned the Maruti Technical Services Limited, which ran into

trouble and was liquidated. After the death of Sanjay Gandhi, the Indira Gandhi

government assigned a delegation of Indian technocrats to hunt for a collaborator

for the project. Initial rounds of discussion were held with the giants of

the automobile industry in Japan including Toyota, Nissan and Honda. Suzuki

Motor Corporation was at that time a small player in the four wheeler automobile

sector and had major share in the two wheeler segment. Suzuki's bid wasconsidered negligible.

While the major companies were personally represented in the initial rounds of

discussion, Osamu Suzuki, Chairman and CEO of the company ensured that he

was present in all the rounds of discussion. Osamu in an article writes that it

subtly massaged their (Indian delegation's) egos and also convinced them about
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the sincerity of Suzuki's bid. Suzuki in return received a lot of help from the

government in such matters as import clearances for manufacturing equipment

(against the wishes of the Indian machine tool industry then and its own

socialistic ideology), land purchase at government prices for setting up the

factory Gurgaon and reduced or removal of excise tariffs. This ensured that

Suzuki conscientiously nursed Maruti Suzuki through its infancy to become one

of its flagship ventures.[4]

Joint venture related issues

Maruti Suzuki'sA-Starvehicle during its unveiling in Pragati Maidan, Delhi.A-Star, Suzuki's

fifth global car model, was designed and is made only in India.[5] Besides being Suzuki's

largest subsidiary in terms of car sales, Maruti Suzuki is also Suzuki's leading research and

development arm outside Japan

Relationship between the Government ofIndia, under the United Front

(India) coalition andSuzuki Motor Corporation over thejoint venture was a point

of heated debate in the Indian media till Suzuki Motor Corporation gained the

controlling stake. This highly profitable joint venture that had a near monopolistic

trade in the Indian automobilemarketand the nature of the partnership built up

till then was the underlying reason for most issues. The success of the joint

venture led Suzuki to increase its equity from 26% to 40% in 1987, and further to

50% in 1992. In 1982 both the venture partners had entered into an agreement to

nominate their candidate for the post of Managing Director and every Managing

Director will have a tenure of five years[6]

Initially R.C.Bhargava, was the managing director of the company since the

inception of the joint venture. Till today he is regarded as instrumental for the

success of Maruti Suzuki. Joining in 1982 he held several key positions in the
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company before heading the company as Managing Director. Currently he is on

the Board of Directors.[7] After completing his five year tenure, Mr. Bhargava later

assumed the office of Part-Time Chairman. The Government nominated Mr.

S.S.L.N. Bhaskarudu as the Managing Director on 27 August 1997. Mr.

Bhaskarudu had joined Maruti Suzuki in 1983 after spending 21 years in the

Public sector undertaking Bharat Heavy Electricals Limited as General Manager.

Later in 1987 he was promoted as Chief General Manager, 1988 as Director,

Productions and Projects, 1989 Director, Materials and in 1993 as Joint

Managing Director.

Suzuki Motor Corporation didn't attend the Annual General Meeting of the Board

with the reason of it being called on a short notice. [8] Later Suzuki Motor

Corporation went on record to state that Mr. Bhaskarudu was "incompetent" and

wanted someone else. However, the Ministry of Industries, Government of Indiarefuted the charges. Media stated from the Maruti Suzuki sources that

Bhaskarudu was interested to indigenise most of components for the models

including gear boxes especially forMaruti 800. Suzuki also felt that Bhaskarudu

was a proxy for the Government and would not let it increase its stake in the

venture.[9] If Maruti Suzuki would have been able to indigenise gear boxes then

Maruti Suzuki would have been able to manufacture all the models without the

technical assistance from Suzuki. Till today the issue of localization of gear

boxes is highlighted in the press.[10]

The relation strained when Suzuki Motor Corporation moved to Delhi High Court

to bring a stay order against the appointment of Mr. Bhaskarudu. The issue was

resolved in an out-of-court settlement and both the parties agreed that R S S L N

Bhaskarudu would serve up to 31 December 1999, and from 1 January

2000, Jagdish Khattar, Executive Director of Maruti Udyog Limited would assume

charges as the Managing Director.[11] Many politicians believed, and had stated in

parliament that the Suzuki Motor Corporation is unwilling to localize

manufacturing and reduce imports. This remains true, even today the gear boxes

are still imported from Japan and are assembled at the Gurgaon facility.

]ndustrial relations

For most of its history, Maruti Udyog Limited had relatively few problems with its

labour force. Its emphasis of a Japanese work culture and the modern

manufacturing process, first instituted in Japan in the 1970s, was accepted by
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the workforce of the company without any difficulty. But with the change in

management in 1997, when it became predominantly government controlled for a

while, and the conflict between the United Front Government and Suzuki may

have been the cause of unrest among employees. A major row broke out in

September 2000 when employees of Maruti Udyog Ltd (MUL) went on an

indefinite strike, demanding among other things, revision of the incentive scheme

offered and implementation of a pension scheme. Employees struck work for six

hours in October 2000, irked over the suspension of nine employees, going on a

six-hour tools-down strike at its Gurgaon plant, demanding revision of the

incentive-linked pay and threatened to fast to death if the suspended employees

were not reinstated. About this time, the NDA government, following a

disinvestments policy, proposed to sell part of its stake in Maruti Suzuki in a

public offering. The Staff union opposed this sell-off plan on the grounds that thecompany will lose a major business advantage of being subsidised by the

Government.

The standoff with the management continued to December with a proposal by

the management to end the two-month long agitation rejected with a demand for

reinstatement of 92 dismissed workers, with four MUL employees going on a

fast-unto-death. In December the company's shareholders met in New Delhi in

an AGM that lasted 30 minutes. At the same time around 1500 plant workers

from the MUL's Gurgaon facility were agitating outside the company's corporate

office demanding commencement of production linked incentives, a better

pension scheme and other benefits. The management has refused to pass on

the benefits citing increased competition and lower margins. [12]

Services offered

[Current sales of automobiles
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Maruti Omni

India's Corps of Military Policepersonnel patrolling theWagah border crossing in

thePunjabin a Maruti Gypsy.

Maruti WagonR

Maruti Alto
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Maruti Suzuki Swift

Maruti Suzuki Zen Estilo

Suzuki SX4

5th Generation Suzuki Alto is sold as Maruti Suzuki A-Starin India.

Maruti Suzuki Swift DZire
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Suzuki Splash is sold as Maruti Suzuki Ritz in India.

Manufactured locally

1. 800(Launched 1983)

2. Omni(Launched 1984)

3. Gypsy(Launched 1985)

4. WagonR(Launched 2000)

5. Alto(Launched 2000)

6. Swift(Launched 2003)

7. Estilo(Launched 2009)

8. SX4(Launched 2007)

9. Swift DZire(Launched 2008)

10. A-star(Launched 2008)

11. Ritz(Launched 2009)

12. Eeco(Launched 2010)

]Imported

Suzuki Grand Vitara

Discontinued car models

1. 1000(19901994)

2. Zen(19932006)
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3. Esteem(19942008)

4. Baleno(19992007)

5. Zen Estilo(20062009)

6. Versa(20012010)

7. Grand Vitara XL7(20032007)

]Manufacturing facilities

Maruti Suzuki has two state-of-the-art manufacturing facilities in India.[13] Both

manufacturing facilities have a combined production capacity of 1,250,000

vehicles annually.

Gurgaon Manufacturing Facility

The Gurgaon Manufacturing Facility has three fully integrated manufacturing

plants and is spread over 300 acres (1.2 km2). All three plants have an installed

capacity of 350,000 vehicles annually but productivity improvements have

enabled it to manufacture 700,000 vehicles annually. The Gurgaon facilities also

manufacture 240,000 K-Series engines annually. The entire facility is equipped

with more than 150 robots, out of which 71 have been developed in-house. The

Gurgaon Facilities manufactures

the 800, Alto, WagonR,Estilo, Omni, Gypsy and Eeco.

Manesar Manufacturing Facility

The ManesarManufacturing Plant was inaugurated in February 2007 and is

spread over 600 acres (2.4 km2). Initially it had a production capacity of 100,000

vehicles annually but this was increased to 300,000 vehicles annually in October

2008. The production capacity was further increased by 250,000 vehicles taking

total production capacity to 550,000 vehicles annualy. The Manesar Plant

produces the A-star, Swift, Swift DZire andSX4.

[Sales and service network

Maruti Suzuki is one of the companies in India which has unparalleled sales andservice network. As of March 2010 it has 802 dealerships across 555 towns and

cities in India. To ensure the vehicles sold by them are serviced properly, Maruti

Suzuki has 2,740 workshops (including dealer workshops and Maruti Authorised

Service Stations) in 1,335 towns and cities.[14] It has 30 Express Service Stations
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on 30 National Highways across 1,314 cities in India. The company is planning to

expand the number of dealerships to 1,500 by 2015. [15]

Service is a major revenue generator of the company. Most of the service

stations are managed on franchise basis, where Maruti Suzuki trains the local

staff. Other automobile companies have not been able to match this benchmark

set by Maruti Suzuki. The Express Service stations help many stranded vehicles

on the highways by sending across their repair man to the vehicle. [16]

]Maruti Insurance

Launched in 2002 Maruti Suzuki provides vehicle insurance to its customers with

the help of the National Insurance Company, Bajaj Allianz, New India Assurance

and Royal Sundaram. The service was set up the company with the inception of

two subsidiaries Maruti Insurance Distributors Services Pvt. Ltd and Maruti

Insurance Brokers Pvt. Limited[17]

This service started as a benefit or value addition to customers and was able to

ramp up easily. By December 2005 they were able to sell more than two million

insurance policies since its inception.[18]

]Maruti Finance

To promote its bottom line growth, Maruti Suzuki launched Maruti Finance in

January 2002. Prior to the start of this service Maruti Suzuki had started two joint

ventures Citicorp Maruti and Maruti Countrywide with Citi Group and GE

Countrywide respectively to assist its client in securing loan. [19] Maruti Suzuki tied

up with ABN Amro Bank, HDFC Bank, ICICI Limited, Kotak Mahindra, Standard

Chartered Bank, and Sundaram to start this venture including its strategic

partners in car finance. Again the company entered into a strategic partnership

with SBI in March 2003[20] Since March 2003, Maruti has sold over 12,000

vehicles through SBI-Maruti Finance. SBI-Maruti Finance is currently available in

166 cities across India.[21]

"Maruti Finance marks the coming together of the biggest players in the car financebusiness. They are the benchmarks in quality and efficiency. Combined with Maruti

volumes and networked dealerships, this will enable Maruti Finance to offer superior

service and competitive rates in the marketplace".

Jagdish Khattar, Managing director of Maruti Udyog Limited in a press conference

announcing the launch of Maruti Finance on 7 January 2002[19]
http://en.wikipedia.org/wiki/National_Highway_(India)http://en.wikipedia.org/wiki/Maruti_Suzuki#cite_note-14http://en.wikipedia.org/wiki/Maruti_Suzuki#cite_note-15http://en.wikipedia.org/wiki/Maruti_Suzuki#cite_note-16http://en.wikipedia.org/wiki/Maruti_Suzuki#cite_note-17http://en.wikipedia.org/wiki/Maruti_Suzuki#cite_note-72.14.207.104-18http://en.wikipedia.org/wiki/Maruti_Suzuki#cite_note-19http://en.wikipedia.org/wiki/Maruti_Suzuki#cite_note-20http://en.wikipedia.org/wiki/Maruti_Suzuki#cite_note-72.14.207.104-18http://en.wikipedia.org/wiki/National_Highway_(India)http://en.wikipedia.org/wiki/Maruti_Suzuki#cite_note-14http://en.wikipedia.org/wiki/Maruti_Suzuki#cite_note-15http://en.wikipedia.org/wiki/Maruti_Suzuki#cite_note-16http://en.wikipedia.org/wiki/Maruti_Suzuki#cite_note-17http://en.wikipedia.org/wiki/Maruti_Suzuki#cite_note-72.14.207.104-18http://en.wikipedia.org/wiki/Maruti_Suzuki#cite_note-19http://en.wikipedia.org/wiki/Maruti_Suzuki#cite_note-20http://en.wikipedia.org/wiki/Maruti_Suzuki#cite_note-72.14.207.104-18


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Citicorp Maruti Finance Limited is a joint venture between Citicorp Finance India

and Maruti Udyog Limited its primary business stated by the company is "hire-

purchase financing of Maruti Suzuki vehicles". Citi Finance India Limited is a

wholly owned subsidiary of Citibank Overseas Investment

Corporation, Delaware, which in turn is a 100% wholly owned subsidiary of

Citibank N.A. Citi Finance India Limited holds 74% of the stake and Maruti

Suzuki holds the remaining 26%.[22] GE Capital, HDFC and Maruti Suzuki came

together in 1995 to form Maruti Countrywide.[23] Maruti claims that its finance

program offers most competitive interest rates to its customers, which are lower

by 0.25% to 0.5% from the market rates.

]Maruti TrueValue

Main Article: Maruti True Value

Maruti True service offered by Maruti Suzuki to its customers. It is a market place

for used Maruti Suzuki Vehicles. One can buy, sell or exchange used Maruti

Suzuki vehicles with the help of this service in India. As of 2009 there are 315

Maruti True Value outlets.[24]

]N2N Fleet Management

N2N is the short form ofEnd to End Fleet Management and provides lease and

fleet management solution to corporates. Its impressive list of clients who have

signed up of this service include Gas Authority of India Ltd, DuPont, ReckittBenckiser, Sona Steering, Doordarshan, Singer India, National Stock Exchange

and Transworld. This fleet management service include end-to-end solutions

across the vehicle's life, which includes Leasing, Maintenance, Convenience

services and Remarketing.[25]

[Accessories

Many of the auto component companies other than Maruti Suzuki started to offer

components and accessories that were compatible. This caused a serious threat

and loss of revenue to Maruti Suzuki. Maruti Suzuki started a new initiative underthe brand name Maruti Genuine Accessories to offer accessories like alloy

wheels, body cover, carpets, door visors, fog lamps, stereo systems, seat covers

and other car care products. These products are sold through dealer outlets and

authorized service stations throughout India.[26]

[edit]Maruti Driving School
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A Maruti Driving School in Chennai

As part of its corporate social responsibility Maruti Suzuki launched the Maruti

Driving School in Delhi. Later the services were extended to other cities of India

as well. These schools are modelled on international standards, where learners

go through classroom and practical sessions. Many international practices likeroad behaviour and attitudes are also taught in these schools. Before driving

actual vehicles participants are trained on simulators.[27]

"We are very concerned about mounting deaths on Indian roads. These can be brought

down if government, industry and the voluntary sector work together in an integrated

manner. But we felt that Maruti should first do something in this regard and hence this

initiative of Maruti Driving Schools."

Jagdish Khattar, at the launch ceremony of Maruti Driving School, Bangalore

Issues and problems

On February, 24, 2010, Maruti Suzuki India, announced recalling of 100,000 A-

Star hatchbacks to fix a fuel leakage problem. the company will replace the

gaskets for all 100,000 A-Star cars.[28]

Exports

Maruti Exports Limited is the subsidiary of Maruti Suzuki with its major focus on

exports and it does not operate in the domestic Indian market. The first

commercial consignment of 480 cars were sent to Hungary. By sending a

consignment of 571 cars to the same country Maruti Suzuki crossed the

benchmark of 300,000 cars. Since its inception export was one of the aspects

government was keen to encourage. Every political party expected Maruti Suzuki

to earn foreign currency.
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Angola, Benin, Djibouti, Ethiopia, Europe, Kenya, Morocco, Sri Lanka, Uganda,

Chile, Guatemala, Costa Rica and El Salvador are some of the markets served

by Maruti Exports.

maruti suzuki is india

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