An analysis of automobile sector with focus on maruti suzuki

1. Strategic
Management
Project on Maruti
Suzuki
Group-4

2. History & Origin OF
Automobile Industry In India
• The first car that plied on Indian roads was in early 1897 & was
owned by an English man Mr Foster of Crompton Greaves
• The first Indian to own a car was Jamshedji Tata in 1901.
• In 2009, India emerged as the 4th largest exporter of passenger cars after
Japan, South Korea & Thailand.
• In 2011, India became the 6th largest car manufacturer in the world &
Asia’s 2nd largest two-wheeler manufacturer.
• India’s automobile industry accounts for 49% of the country’s
manufacturing GDP
• It directly and indirectly employs 37 million workers.
• The auto sector contributes roughly 15% to GST collection.

3. Maruti Suzuki- Origin, Business affiliations and evolution
• Maruti Suzuki India Limited, formerly known as Maruti Udyog
Limited
• Maruti Udyog Limited was founded by the Government of
India in 1981, only to merge with the Japanese automobile
company Suzuki in October 1982.
• In 1996, with little competition and a much smaller stable,
Maruti reigned supreme with 60% market share. In 2016, in
much more competitive environs, Maruti still stands tall with a
47.6% share.
• Making a small beginning with the iconic Maruti 800 car,
Maruti Suzuki today has a vast portfolio of 16 car models with
over 150 variants. Maruti Suzuki’s product range extends from
entry level small cars like Alto 800, Alto K10 to the luxury
sedan Ciaz.
3

4. Product Portfolio-Maruti Suzuki
2
Maruti Suzuki S-Presso
₹ 4.09 - 5.43 Lakh
Maruti Suzuki Vitara Brezza
₹ 8.29 - 13.3 Lakh
Maruti Suzuki Wagon R
₹ 4.87 - 6.52
Lakh
New Maruti Suzuki Swift
₹ 5.72 - 10.11 Lakh
Maruti Suzuki Dzire
₹ 6.47 - 10.88 Lakh
Maruti Suzuki Baleno
₹ 6.18 - 10.1 Lakh
Maruti Suzuki Ciaz
₹ 9.52 - 13.19 Lakh
Maruti Suzuki Celerio X
₹ 5.35 - 6.18 Lakh

5. • The automotive
industry has a huge
impact on every
country’s economy.
• Major user of
computer chips,
textiles, aluminum,
copper, steel, iron,
lead, plastics, vinyl,
and rubber.
• These industries
include anything from
the aluminums to
lead to vinyl.
• The ecological and
environmental
aspects, such as
R&D activity,
automation,
technology
incentives and the
rate of
technological
change.
• Technological
shifts can affect
costs, quality, and
lead to
innovation.
• Automotive
regulations governed
by- the Ministry of
Shipping, Road
Transport & Highways
• Principal instrument
governing -Motor
Vehicles Act, 1988
along with the Central
Motor Vehicles Rules
1989.
• Act governs-emission
norms ,safety
standards in India
• Indian govt.
formulated Auto
Policy
• Govt. has granted
concessions-
reduced interest
rate for export
financing
• Formulation of auto
fuel policy
• Ensures a balanced
transition.
• Emphasis on R&D
activities and tax
deduction.
• The cultural
aspects and
awareness,
population growth
rate, age
distribution,
career attitudes.
• Emphasis on
safety.
• Trends in social
factors affect the
demand for a
company’s
products.
• Physical
infrastructure such
as roads and bridges
affect the use of
automobiles.
• Physical
conditions like
environmental
situation affect the
use of automobiles.
• Increasing number
of vehicles-
pollution.
• Best option is
Biofuel
POLITICAL ECONOMIC SOCIAL TECHNOLOGY LEGAL ENVIRONMENT

6. Maruti has been Indian
market leader since a long
time
Good advertising and high
brand visibility.
Largest distribution
network of dealers and
after sales service centres.
Available in petrol and
diesel variants.
One of the most popular
global brand names
• Inability to penetrate
into the international
market
• Light body
• Difficult to maintain
market share in an
intense competitive
sedan market
Fast growing automobile
market &
Increased purchasing power
parity
Developing hybrid cars and
fuel efficient cars for the
future can be an opportunity
for Maruti Suzuki
• Intense competition
• Government
regulations and Ever
increasing fuel prices
• Improvement in public
transport
SWOT ANALYSIS
Strength Weakness Opportunity Threat

7. 7
Main Competitors & Their Market Shares
Source: Autocar Professional
Maruti Hyundai Mahindra Tata Honda Toyota
53.3% 16% 7.5% 5.3% 2.0% 2.2%
Market Share (January 2020)
Source: Indian Auto Report FY20

10. • Maruti discontinuing Diesel Cars.
• Many carmakers have already announced the BS-VI diesel engines like
Hyundai Verna and the Honda City.
• Little Presence in SUV segment and entry of Kia and MG further increasing
the competition.
• Toyota-Suzuki Collaboration will cannibalize sales of Maruti Suzuki’s
premium products.
• Chinese companies Great Wall Motors, Changan Automobile Company
planning to enter into Indian Car Industry.
• Investment in Electric vehicle segment by Tata, Mahindra, Renault etc as
showcased in Expo 2020.
Potential Threats to Maruti Suzuki

11. Different players that entered the
industry and their capacity
11
S.No. Company Name Entry Model Year Price
01. Tata
Motors
Indica 1998 ₹2.6 Lakh
02. Honda Honda City 1998 ₹5.75 Lakh
03. Hyundai Santro 1998 ₹2.34 Lakh
04. Toyota Qualis 2000 ₹5.86 Lakh

12. Growth & Performance
of Automobile Sector
Data Source: Society of Indian Automobile
Manufacturers
4

13. 13
0
5
10
15
20
25
30
35
2017 2018 2019
25.33
29.07
30.92
21.86
24.97
26.27
NumberofVechiles(inMillion)
Year
Number of Automobiles Produced(in
Million)
Number of Automobiles Sold
Market
Size

14. 14

15. 15
Export
Trends

16. 16
Gross
Turnover

17. Effect of Recent Economic
Slowdown on Auto sector
• Over the past 11 months auto industry is showing decline in growth.
• The combined sales of all automobiles fell to 1.9 million units in June last year
against 2.2 million units a year ago.
• In particular, passenger vehicle sales have dropped for nine straight months
through July, with some automakers suffering year on-year declines of more
than 30% in recent months.
• According to the Society of Indian Automobile Manufacturers (SIAM), 3,50,000
jobs (mostly contractual) have been lost and over a million are at a risk due to
plant shutdowns and bankruptcy of dealers and component makers
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18. 18
• In a regulatory filing on March 1, Maruti Suzuki said that its sales
for the month of February 2020 declined by 3.6%, as compared to
the same period last year.
• The company noted that it had sold a total of 139,100 vehicles in
the country in February 2019, but a year later, that number fell to
134,150.
• Further, the upward revision in road and registration charges by
state governments are making vehicle ownership unaffordable as
rightly highlighted by the Maruti chairman
Effect of Slowdown on Maruti
Suzuki

19. SUGGESTION
• Transition to EV.
• Focus on new segments which are more profitable.
• Government need to bring in new reforms in financial
sector.
• Government need to reduce road tax on New cars.
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20. 20
Thanks!
Any questions?