Maruti Suzuki was established in 1981 through an act of parliament to meet the growing demand for personal transportation. It launched its first car, the Maruti 800, in 1983. Suzuki Motor Company was chosen as a partner due to its expertise in small cars. Initially Suzuki held a 26% stake in Maruti Suzuki. Maruti Suzuki gained market dominance by segmenting the market and launching different models to target various income groups and customer types. However, it lost market share in the late 1990s when competitors launched new models with more features at similar prices. To regain market share, Maruti Suzuki launched new models like Zen, Alto and WagonR which were successful.

2.  Car Segments
 Maruti Suzuki Portfolio
 Strategies (Marketing and Promotion)
 Competition

3. Source: World Bank, Provided by GAIL India Ltd. (2001-02)
 Maruti Udyog Limited (MUL) was established in
Feb 1981 through an Act of Parliament, to meet
the growing demand of a personal mode of
transport caused by the lack of an efficient
public transport system
 MUL launched its first car Maruti800 onMUL launched its first car Maruti800 on
December 14,1983 at initial price of Rs.December 14,1983 at initial price of Rs.
47,500.47,500.

4.  Suzuki Motor Company was chosen from seven prospective
partners worldwide. This was due not only to their
undisputed leadership in small cars but also to their
commitment to actively bring to MUL contemporary
technology and Japanese management practices . A license
and a Joint Venture agreement was signed between Govt of
India and Suzuki Motor Company (now Suzuki Motor
Corporation of Japan) in Oct 1982
 Suzuki brought efficient management practices,better
technology and administration.
 Initially Suzuki held the 26% stake in Maruti Suzuki .
4

5.  Maruti was the first company in India which studied the consumer
demand and responded to it well.
 Market segmentation policy was adopted that targeted different
type of consumers with different type of models.
 Maruti800 targeted medium income group, while the deluxe model
targeted rich income group.
 Maruti van targeted businessmen and doctors(ambulance)
 The Gypsy targeted the paramilitary forces and the police.
This resulted in complete control of maruti over the market .
 The company advertised its different products according to
costumers e.g- maruti van was rechristened as Omni .
 A special cell was made to make direct dealing of Gypsy with the
government & the army.
5

6.  The MUL depended more on its M800
model, so when in late 1990’s the new
players like when Matiz, Santro and
Indica came into the market with more
space and better comfort ,at same price,
then Maruti lost a major share of market.
6

7.  After year 2000,(and 2003 to be more
precise)there was a change in automobile
market which where due to-
1. The government has reduced regulation
on the industry and more foreign players
were invited.
2. Banks and other financing companies
started providing car loans at reasonable
interest rate
7

8.  The Indian consumer now started buying
the mid-size cars rather than small cars
,the luxury cars also gained
popularity,SUV’s also started coming in
the market.
 The increasing level of income of urban
people ,the small cars were not
considered to be luxury item any more.
8

9.  To gain back its lost share Maruti launched Zen ,Alto and WagonR.These small
segment car gained huge response for consumers.
 Maruti also launched aggressive promotional policy to promote them like
announcing Zen as the “world’s car”.
 Maruti also made a slogan “count on us".To emphasize its reliability
 In 2003 maruti came up with “change your life campaign” ,it provided vehicle
insurance at just Rs 1 to attract the customers.
 advertisement such as of Alto in which a small boy says to his father ”papa ki karan
petrol khatam hi nahi honda” was make customer feel that Alto was best fuel
efficient.
 During 2003 and 2004, MUL visualized and implemented a strategy for its dealers to
increase their profitability levels in view of increased competition. According to the
strategy, the 300-odd dealers of the company were asked to strengthen their
manpower, increase the salaries of their sales agents, and offer them better
incentives.
9

10.  During 2003 and 2004, MUL visualized and implemented a
strategy for its dealers to increase their profitability levels in view
of increased competition. According to the strategy, the 300-odd
dealers of the company were asked to strengthen their manpower,
increase the salaries of their sales agents, and offer them better
incentives.
 '2599' offer-In 2004, MUL introduced the '2599' offer under which
a consumer could buy an M-800 by paying an EMI of Rs 2,599 only,
for a period of seven years.The down payment was fixed at Rs
40,000. MUL entered into an agreement with the State Bank of
India (SBI), the largest bank in India, to promote this scheme
 'Teacher Plus' scheme-To further penetrate into the market, MUL
continued to focus its efforts on the rural markets and specific
target groups. In 2004, it introduced the 'Teacher plus' scheme, in a
tie-up with SBI, aimed at teachers who were interested in buying a
new car.
10

11. Segmen
t
Price Range Cars
A < 3.0 lacs Maruti Alto 800, Omni , EON
B 3.0 -5.0 lacs Wagon R, Zen, Versa, Hyundai i10,
Chevrolet Spark,Ritz, Tata Indica,
Indigo
C 5.0 -10.0 lacs Swift, i20, Honda City, Polo, Innova,
Sx4
D 10.0 -15.0 lacs Hyundai Verna , Civic, Octavia
E 15.0 – 30.0 lacs Honda CRV, Hyundai Sonata, Honda
Accord, Maruti Suzuki Kizashi
http://www.surfindia.com/automobile/automobile-industry.html

12. The Journal of Business Perspective, Vol 10, No 1: Jan - Mar 2006

13.  The Maruti 800, has gone beyond just a car, it
has actually changed the lives and lifestyles of
countless people, by bringing the joy of
motoring to millions across the length and
breadth of the country

14. The alto is a great combination of economy ,
practicality and styling. A runaway success on
the roads of Europe, it exemplifies the
benchmark in build, quality and reliability in a
compact car. This is testified by the 24-hour
endurance record set on Aug 03, 2003 of
covering 3082 kms in 24 hours at an average
speed of 128kmph.

15.  The Omni is truly India’s original Multipurpose
vehicle.Today it is available in 6 Avtars – 5
Seater, 8 Seater, Cargo, Ambulance, CNG and
LPG. It meets diverse needs across different
user segments and can double up both as a
people carrier and a goods carrier.This faithful
workhorse is easy on the pocket, yet tough on
the job.

16.  A Spanish expression for Style, the new Zen
Estillo stands true to its name. Its aerodynamic
body, unique bean shape, sparkling colors and
snazzy lights will rev up your style quotient. An
amazing blend of style and substance, its agile
nature will leave you enthralled.

17.  Drive with complete peace of mind. The
word-class safety features of the wagonR
keep you safe and secure, always. Wearing
new vibrant colors, the new wagonR is full of
freshness and energy to keep you charged
up and always to go.

18.  76% of Maruti cars are financed
 44% through Maruti Finance, 12 % through
SBI and associate banks
 In year 2006-07, it added Mahindra Finance,
Magma Leasing , Cholamandalam and Axis
Bank.

19. 19
SegmentA
SegmentB
SegmentC
0
25
50
75
100FY10 FY11
Segment A:
Maruti Alto, Omni
Segment B:
Zen, Ritz, Wagon R
Segment C:
Swift, SX4, Swife Dzire

20.  Maruti Astar
 Omni
 Alto
 WagonR
 Swift
 Zen
 Ritz
 Estilo
 Versa
 SX4
 Grand Vitara

22. +i10 rated “Best Small Car” in JD Power Asia Pacific Initial Quality and APPEAL studies.
+ European styling , power-assisted brakes, advanced suspension system and uniquely
responsive engine.
+ Celebrity endorsed (Shahrukh Khan and Preity Zinta).
+ Hyundai had a national network of 300 sales and service outlets.
- The spares are expensive than that of Maruti
- TATA INDICA
+ Car built for Indians by Indians
+ Ambassador’s internal dimension and Maruti 800’s price with option of diesel engine
+ Has a sleek fascia with chrome lined grill, clear lens illumination, muscled flares,
flexible seating and electronic instrumentation with tachometer.
+ Cheaper and home grown spares.
+ Has lowest running cost (around Rs. 2.06 /km)
Chevrolet Spark
General Motors rolled out its small car Chevrolet Spark in India as it takes on market
leader Maruti Suzuki.
+ Rs 3.09 lakh (Ex-showroom Delhi) slightly lower than Maruti’s Zen Estillo base model.
Improved cabin space
22

23.  Dealer network across the country
A wide dealership network allows the company to service customers over a wider
geographical area than competitors. Currently, MUL has 500 sales outlets that cover
312 cities, as compared to 162 outlets of Hyundai Motors and 140 outlets of Tata
Motors
B True Value Operations
MUL providing its customers an opportunity to resale their car to MUL or exchange
with a new Maruti car under its “True Value” network has proven really beneficial.
In FY07 True Value network touched 10000 units a month and more than 90% of that
resulted in the exchange of a new car
C Presence across segments
In a car manufacturing plant, the press shop, paint shop, engine and transmission
assembly, and machine shop are used for manufacturing different modelsA presence
across various segments ensures that the company retains its existing customers by
offering them upgrades from its portfolio of models.
23

24.  Higher localization
 it has rationalized vendors from 370 in 1999-00 to 225 in 2005-06
has resulted in MUL enjoying the highest operating margins
amongst its peers
 Commonality of platforms-
Commonality between the platforms of various models
lead to lower product development efforts and higher
benefits of economies of scale. Uses only two platforms
Strong support in R & D and Product from parent - MUL’s
strength lies in the strong parentage of SMC, Japan. The
Japanese SMC helps MUL in R&D and new model launches,
as the Indian subsidiary contributes more than 25% of the
parent net income. The company also has access to its
parent's product portfolio, , which allows it to launch the
latest products in domestic markets. Zen Estillo was
launched in a very short period of nine months with
support from the parent company.
24

25. 25
 Increasing Productivity- MUL enjoys
one of the best operating margins in its
peer group at 13.6% and 10.7% at the net
income level in FY10.The company has
rationalised its work force, thereby
reducing the man-hours spent in
producing a vehicle by around 21% in
the last 3 years.This has helped it to cut
cost of producing per unit of vehicle.

26. 26

28.  Maruti Suzuki is far behind in luxury and
SUV car ,the other player like GM, TATA,
Mahindra , Mitsubishi and Toyota are
already established in the market ,so
replacing them would not be easy.
 MUL has been now emphasizing
consistently on it’s “Best customer
satisfaction” car to keep an psychological
impact on costumers.

29.  Advertisements targeting different
segments
 Promotional offers through out the years
 Psychographics is used :
• Wagon-R : Smarter people (executives)
• Omni : People who need to transport goods
• Alto : Small car : small family
• Zen Estillo :Young trendy people
29

30.  The joint initiatives taken by Maruti and
its team of suppliers have generated over
29% cost reduction over three years for
Maruti
 Less than 20 per cent of a car is
manufactured in-house. The rest is
accounted for by 215 suppliers and
hundreds of second and third tier of
vendors who, in turn, supply to them.

31.  Maruti has launched two models Ertiga
in 2012 and Alto 800 in 2012 ,these two
models are facing intense competition
from already established companies.
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