Market Applications & Practices of Maruti Case Studies

7/24/2019 Market Applications & Practices of Maruti Case Studies

1/19

Automobile Four Wheeler Industry

AUTOMOBILE FOUR

WHEELER INDUSTRY

MARUTI UDYOG LTD.

MARKET APPLICATIONS &

PRACTICES

1


2/19


MARUTI UDYOG LTD

Company Snapshot:

Incorporated February 1981

Joint Venture

AgreementOctober 1982

Equity

Structure

54.2% Suu!i" #a$an" balance ith Other Financial Institution and&ublic

EmployeeStrength

499' o( Financial year 2))*+),

Facilities -uraon/ ' 0ehicle assembly $lantsanesar/ 1 0ehicle assembly $lantead O((ice in 3e elhi" Indiaeional o((ices/ 1*

Diesel

Powertrain

Plant

Suu!i &oertrain India 6imited 7S&I6" #oint enture beteen Suu!iotor :or$oration ,)% ;


3/19


+A',-I S,.,/I -0DA1

ore than hal( the number o( cars sold in India ere a aruti Suu!i bade. It is asubsidiary o( Suu!i otor :or$oration #a$an.

As IndiaDs larest $assener car com$any" it accounts (or o0er 5) $er cent o( the domesticcar mar!et.

It has a sales netor! o( 5*2 outlets in ',2 tons and cities" and $ro0ide maintenancesu$$ort to customers at 25'8 or!sho$s in o0er 12)) tons and cities 7as on ecember'1"2)),.

Since ince$tion" it has $roduced and sold o0er *.,5 million 0ehicles" includin almost

5))"))) units in ;uro$e and other eE$ort mar!ets.

aruti has been rated (irst in customer satis(action (or eiht years in a ro in # &oerDsSur0eys" and is IndiaDs ost es$ected Automobile :om$any 7As $er sur0ey conductedby ?usiness World" a re$uted Indian aaine

Also" in an inde$endent sur0ey conducted by Forbes.:om here they rated to$ 2))re$uted com$anies on 0arious $arameters such as re$utation ithin the customer andem$loyee (raternity" =hey stood 91st. In the automobile section they (inished ,th.

-2E +A',-I D%A

aruti as born as a o0ernment com$any" ith Suu!i as a minor $artner" to ma!e a$eo$leDs car (or middle class India. O0er the years" aruti>s $roduct rane has idened"onershi$ has chaned hands and the customer has e0ol0ed. What remains unchaned"then and no" is aruti>s mission to motorise India.

aruti>s $arent com$any" Suu!i otor :or$oration" has been a lobal leader in miniand com$act cars (or three decades. Suu!iDs technical su$eriority lies in its ability to$ac! $oer and $er(ormance into a com$act" lihteiht enine that is clean and (uele((icient. =he same characteristics ma!e aruti>s cars eEtremely rele0ant to Indiancustomers and Indian conditions. &roduct s $arentcom$any.

iht (rom ince$tion" aruti brouht to India" a 0ery sim$le yet $oer(ul #a$anese$hiloso$hy smaller" (eer lihter" shorter and neater.G

'


4/19


From the #a$anese or! culture they imbibed sim$le $ractices li!e an o$en o((ice" acommon uni(orm and common canteen (or e0eryone (rom the anain irector to theor!man" daily mornin eEercise" and s cars Waon and Alto scored the hihest" (or second :onsecuti0e year" (or the year 2))*.

In IHS 7Initial Huality Study + en 7the old model scored the hihest (olloed byWaon and Alto in their res$ecti0e cateories" (or the year 2))*

'0AD SAFE-1

ore than 1))"))) Indians are dyin e0ery year in road accidents. ore than a millionare inJured or maimed. any years ao" a study (ound that road accidents cost thecountry some s 55"))) crore e0ery year.

While the boom in the domestic automobile industry" and the o0ernmentDs (ocus onroads and hihays are both heartenin de0elo$ments" they ill ha0e to mo0e hand inhand ith a cohesi0e e((ort to im$ro0e road sa(ety.

I%-E5'A-ED '0AD SAFE-1

aruti belie0es that e can learn (rom the eE$erience o( countries li!e the KS" KL"3etherlands and Austria" hich has demonstrated that it is $ossible to brin don road(atalities throuh the riht $ublic $olicy and its e((ecti0e en(orcement.

?y ado$tin an interated" collaborati0e a$$roach to road sa(ety they ha0e manaed toreduce road (atalities. ;E$erts (rom road construction and desin" 0ehicle manu(acturin"

4


5/19


dri0er trainin" la en(orcement" healthcare ha0e all been brouht toether by a nationalroad sa(ety initiati0e to or! out a combined stratey to brin don road accidents.

In India" e ha0e a hue a$$aratus (or road sa(ety/ national and state le0el councils"dri0er license authorities" en(orcement aencies li!e the tra((ic $olice" uni0ersityresearchers" 0oluntary rou$s" all o( hom are enaed in im$ro0in road sa(ety. ?ut eare yet to a$$roach road sa(ety in an interated manner.

India has its on $eculiar tra((ic conditions" includin di0ersity o( 0ehicles" s dealers to inculcatesa(e dri0in habits in $eo$le.

aruti>s (irst maJor e((ort in $romotin road sa(ety as in the year 2))) hen it o((eredto ta!e manaement control o( elhi -o0ernmentDs Institute o( ri0in =rainin andesearch 7I=.

=hey introduced trainin (acilities and in(rastructure includin orld+class dri0in testtrac!s" ad0anced com$uter simulators and trainin modules based on the ones (olloed inthe KL and ada$ted to Indian conditions.

=he I= has trained and e0aluated more than '8)"))) $eo$le" $redominantlycommercial dri0ers. ;ncouraed by the res$onse" it has set u$ a second I=" this timein South elhi" aain in collaboration ith elhi -o0ernment.

Se0eral other state o0ernments" such as aryana" &unJab" ?ihar" Kttara!hand":hattisarh and West ?enal ha0e also a$$roached aruti to set u$ dri0in trainininstitutes in their states. =he com$any has already sined an oK ith the -o0ernmento( aryana (or settin u$ to dri0in trainin institutes at ohta! and ?ahadurarh.

+aruti Dri!ing Schools

ecently" aruti has also sined an oK ith -uJarat -o0ernment to set u$ countryDs(irst ri0in and =echnical =rainin Institute (or =ribal @outh. =hey ha0e o((ered to setu$" manae and run =he -uJarat eional Automobile =rainin Institute 7to be re(erred as-K#A=I at -aJadara 0illae o( Wahodia talu!a in adodara district. =his institute illnot only $ro0ide dri0in trainin to tribal youth" it ill also o((er automobile technicaltrainin to them.

5


6/19


aruti has also in0ol0ed its dealers across country in a bi ay in $romotin road sa(etyand sa(e dri0in. In collaboration ith them" the com$any has set u$ ') aruti ri0inSchools in 2, di((erent locations across the country. =hese schools are e


7/19


-o0ernment o( 3etherlands.

oe0er" due to ado$tion o( ne emission norms they had to tem$orarily sus$endaruti>s eE$orts to ;uro$ean countries and =hey bean de0elo$in a ne model (or;uro$ean mar!ets.

At $resent" they eE$ort entry le0el models to many 6atin American and A(rican nations.With a hea0y (ocus on 3on+;uro$ean countries aruti>s has manaed to brinincremental sales and aruti>s eE$orts to these countries ha0e ron by 4,%" *5% and4)% in the $ast three years.

C0'P0'A-E 'ESP0%SI6I4I-1

As a res$onsible cor$orate citien" they (eel they must $louh bac! in the society that eli0e in. =hey ha0e set u$ uidelines (or :S acti0ities" hich include elements o(

$artnershi$" sustainability" em$loyee in0ol0ement" and scalin u$ o( acti0ities (rom thelocal to the national le0el. =here is strict adherence to o0ernment labour leislations" andthere are de(ined $olicies (or occu$ational health and sa(ety" en0ironment $rotection and$roduct


8/19


Focus on Children Education

In addition" to the youth it has also entered in an areement ith the elhi &ublic Schooland o$ened to schools in -uraon.

=he (irst" &S aruti Shi!sha Lendra as initiated as a dream $roJect to $ro0ideeducation to children belo $o0erty line (rom nearby 0illaes o( -uraon istrict.Around 2)) students in the ae rou$ o( 4+12 years are i0en education here. In additionto $ro0idin elementary education =hey ha0e tried to $ro0ide com$limentary boo!s"stationary items" uni(orm" healthy re(reshments and trans$ort (acility to them.

=he second school" aruti International School" as de0elo$ed to im$art ood s World $lant at anesar" =hey decided to ado$t 0illaessurroundin anesar. =hey ha0e ado$ted three 0illaes in anesar namely Lasan"Alihar" hana 7all located around the anesar (acilities

=he !ey areas o( inter0ention here they (eel they ould be able to add 0alue are as(ollos/

?asic In(rastructure

;ducation

ocational =rainin

ealth :are

+aruti3s Appreciation

=he =3S Automoti0e -lobal :or$orate Social es$onsibility 7:S study co0eredcor$orations (rom $assener car" commercial 0ehicle" motorcycles" tyre M oil sectors.=he study is conducted across 18 countries and besides lobal ran!ins" country s$eci(ic

ran!ins too are announced.

In India" aruti Suu!i as ran!ed as the Nost =rustedN :om$any under &assener

-lobally" o0er 18"))) consumers $artici$ated in the study orldide. =he eneral $ublic$erce$tion o( the automoti0e industry is ta!en ith reard/

:or$orate ethics

Social res$onsibility

8


9/19


;n0ironmental $olicies and

&hilanthro$ic acti0ities

=he study (ound that Sa(ety and ;n0ironment amonst the most im$ortant issues andcor$orations that rated hihly on these are $ercei0ed to be most trustorthy.

En!ironment

While lendin colours to aruti>s cars they ha0e been eEtremely conscious that aruti>s(acilities and aruti>s cars retain their -reenness to be en0ironment (riendly.:ommitment and res$onsibility toards en0ironment comes (rom aruti>s -reen&hiloso$hy+ hich/

$romotes 'Ds+ educe" euse and ecycle"

$romotes enery conser0ation"

encouraes reen $rocurement and

$ro0ides education on en0ironment to em$loyees and their (amilies.

5reen Philosophy

Ado$tin the $oer(ul mantra o( Smaller 6esser 6ihter Shorter 3eater has ins$iredus to desin M de0elo$ cars that are (uel e((icient and en0ironment (riendly. =hey ha0esuccess(ully launched alternate (uel cars and are steadily $roressin toards ne enineseries" hich ill hel$ us brin ;KO+ com$liant cars on Indian roads.

O0er the years" the a$$roach has only re(ined and the results are both $leasin and

$romisin.

es$ite increased $roduction 0olumes there has been a consistent decline in eneryconsum$tion. =han!s to numerous Laiens and a concerted en0ironment (riendlya$$roach" aruti>s total enery consum$tion $er 0ehicle 7durin manu(acturin hascome don drastically by 2* $er cent o0er the last siE years.

In addition" $oer consum$tion has come don by '1 $er cent hile ater consum$tion$er 0ehicle has dro$$ed by *' $er cent o0er the last siE years. 6and(ill aste has alsocome don by *, $er cent o0er this $eriod.

9


10/19


'EAC2I%5 0,- -0 C,S-0+E'S

aruti>s customers ha0e rated us (irst in # &oerDs :ustomer Satis(action Sur0ey (oreiht consecuti0e years.

When they achie0ed it (irst time in 2)))" $eo$le ere s!e$tical. =hey could not (athomho could a mar!et leader li!e us manae to !ee$ ha$$y such a 0ast and di0erse rou$ o(customers.

=he anser $erha$s lies in aruti>s a$$roach toards customer satis(action. ?ein (irstin a :ustomer Satis(action ratin as not Just sim$ly about innin an aard. ather" itbecame aruti>s ea$on to (iht and in in this com$etiti0e mar!et $lace.

o they e0ol0ed aruti>s a$$roachP

=here as a time7 in late 199)Ds hen they (aced some real com$etition ith the entry o(lobal $layers into India.

=hey aren>t bac! to the basics/ What as it that the Indian customer desiredP aruti hadthe riht $roducts (or India" ones ith reliable s customersP

It as then that they decided to (ocus on :ustomer Satis(action. :arin (or the customer"thin!in (rom his and her $oint o( 0ie" buildin trans$arency in aruti>s interactions"orientin oursel0es to (ace the customerDs needs and concerns rather than the other ayround. I( they could do all that" aruti>s satis(ied customers ould recommend aruti>s$roducts to their (riends and relati0es and themsel0es buy their neEt car (rom us. =hereas nothin ne about this strateyQ all com$anies sear by customer satis(action.

=he challene (or us as to o beyond ords and ma!e it all or!" con0ert intention intoaction" translate an intanible mission to tanible bene(its" e0ol0e (rom random and one+o(( customer bene(it estures to a consistent and systematic e((ort to satis(y the customer.

=hey had to stri0e to internalie :ustomer Satis(action and ma!e it a ay o( li(e (oroursel0es.

Cars For A %ew India

aruti has tried to !ee$ $ace ith the chanin li(estyle o( aruti>s customers bybrinin models hih on Dstyle and desin s recent o((erinsli!e the Si(t" en ;stilo 7S$anish (or Style and SR4 ha0e become $o$ular choicesbecause customers (ind them rele0ant.

While desinin contem$orary cars and lacin them ith latest sa(ety (eatures =hey ha0e

1)


11/19


remained 0iilant and cautious o( $ricin them aressi0ely (or aruti>s customers byado$tin a taret cost a$$roach.

-A'5E- C0S- APP'0AC2

=hrouh continuous study and research aruti has ado$ted a ne a$$roach toards$roduct $lannin and $roduct $ricin+ =aret :ost A$$roach.

=hey no bein desinin $roducts by !ee$in an aressi0e mar!et $rice in mind. =heyor! it bac!ards to arri0e at taret costs (or di((erent com$onents" e


12/19


machines that ensure hih


13/19


=he underlyin basis o( aruti>s relationshi$ has been that rather than (ocus on N$ricereductionN o( the com$onent" they ha0e to or! toether to brin don the NcostN o( thecom$onent.

One o( the ays to reduce their cost has been to re$licate the aruti &roduction Systemon the sho$ (loor o( su$$lier com$anies. =hese technis su$$liers and us

In!ol!ing Vendors At De!elopment Stage

Another interestin initiati0e is the early in0ol0ement o( su$$liers. It triers inno0ationsat the desinin stae itsel(. Su$$liers are bein trained to e0ol0e as inno0ation dri0ers byenain them at ne $roduct desinin stae.

&erha$s that is reason hy aruti>s models no are launched ith as hih as 9) $er centle0els o( localiation.

+A',-I3S C,''E%- SCE%A'I0

SA4ES FI5,'ES

:ar mar!et leader aruti Suu!i India 6imited sold a total o( *'"822 0ehicles inFebruary 2))8. =his includes 4"511 eE$ort units.

=he com$any had sold *2"999 units in February 2)),. omestic sales in February 2)),ere 59")95 units.

aruti>s 0olume in the domestic A2 sement ent u$ by 2., $er cent" hile in A'sement the domestic 0olume re by 8.9 $er cent" com$ared to sales in February 2)),.

urin February 2))8 the com$any became IndiaDs (irst car manu(acturer to eE$ort 5 la!hcars cumulati0ely.

Segment +odels

Feruary -ill FeruaryApril9#( )

+arch9#*"##< "##*=

Change

"##*)

#s (i(th World Strateic odel" A+Star" (or eE$ort.=he $roduction model ill be based on the :once$t A+Star" un0eiled at the recent Auto;E$o in elhi. =he com$any $lans to eE$ort 1))"))) units annually o( this ne model" to;uro$e and other $arts o( the orld.

;arlier in February aruti Suu!i tied u$ ith undra $ort (or de0elo$ment o( dedicated$ort (acilities (or eE$ort shi$ments o( cars throuh &ure :ar :arriers. =he ne (acility iseE$ected to be o$erational by ecember 2))8. aruti Suu!i $lans its (irst eE$ortshi$ment (rom the ne $ort (acilities in #anuary 2))9.

CA' P'ICES 'EVISED

:ar mar!et leader aruti Suu!i India 6imited has announced a moderate increase in the$rices o( its rane o( cars.

=he increase ranes beteen s 1")))+ to s 11")))+ 7;E+Shoroom" elhi and ise((ecti0e across all cities and is a$$licable to most o( its models.

In early #anuary 2))8" the com$any had re(reshed the Si(t model 7&etrol and ieseland had increased its $rices.

Folloin are the re0ised $rices o( some aruti 0ehicles/

+odel Pre)re!ision E)

showroom Price 's

'e!ised E)

showroom Price 's

Change 's

8)) Std 19,)92 198)92 1)))

8)) Ac 218''1 219''1 1)))

Alto 6E 2,1522 2,4)22 25))

Alto 6Ei 29)184 292*84 25))

en ;stilo 6Ei '52822 '54822 2)))en ;stilo Ei ',,954 ',9954 2)))

Waon 6E ''1429 ''4929 '5))

Waon 6E 6&-uo

'5'2'2 '542'2 1)))

Waon 6Ei '5*25* '59,5* '5))

15


16/19


Waon 6Ei 6&-uo

'81)5' '82)5' 1)))

Waon Ei '8))*2 '8'5*2 '5))

Omni 5 Seater 224,)' 22,2)' 25))

Omni :aro 6&- 2))122 2)2*22 25))Omni 8 Seater 22***4 2291*4 25))

ersa Std '*54*5 '*94*5 4)))

ersa E2 4,*2)) 48)2)) 4)))

-y$sy Lin ard=o$

512'51 522'51 1))))

-y$sy Lin So(t =o$ 49'))9 5)'))9 1))))

SR4 Ei *18))) *29))) 11)))

SR4 Ei *89))) ,))))) 11)))SR4 Ei 76eather ,24))) ,'5))) 11)))

+A',-I3S %A%0

%ew Eport +odel ) Concept A)Star

:once$t A+Star is the u$comin eE$ort model that has been de0elo$ed by aruti andSuu!i otors :or$oration Jointly. &roduction o( this orld car ill bein in October2))8" at arutiDs anesar &lant.

=oday is the era o( chea$er cars" not o( the !in+sie" luEurious and costly ones. One byone e0ery car ma!er has announced their small and chea$er car to com$ete ith the muchhy$ed D=ata 3anoD" hich is eE$ected to o0er turn the Indian car mar!et. 3o it is theturn o( aruti Kdyo 6imited" IndiaDs leadin car ma!er" to add to the ro o( chea$estcars and uno((icial re$orts state that soon a car $riced in 1 la!h brac!et ill roll out o( thecom$any. ;arlier" at the launch o( =ata 3ano" aruti had denied any $lans o(manu(acturin an ultra lo cost car that could com$ete ith =ataNs car and s


17/19


course ith necessary chanes.

=he ne model is $art o( K6Ns (lan!in stratey aainst =ata otorsN s 1+la!h car"scheduled to hit the mar!et by 2))8+end" i( aruti oes (orard ith the $lan. =he other(lan! ill be the ne **)cc small car bein de0elo$ed at Suu!iNs head


18/19


?rand imae is the im$ortant thin (or any business. aruti Kdyo ahs created its onbrand imae in the country. =oday aruti Kdyo has de0elo$ed their di((erent imae inthe mind o( $eo$le.

;E$erience and Lno+ho in technoloy/+

aruti Kdyo has collaborated ith Suu!i" the #a$anese com$any.With thiscollaboration" aruti has brouht hi+tech technoloies in their $ast models and also usinsome modern techni


19/19


aruti Kdyo ets a lot o( subsidies (rom -o0t. So its ood o$$ortunity (or arutiKdyo to reduce their cost hich ets increase due to 0arious tari((s.

=aE bene(its

=aE bene(it is an im$ortant o$$ortunity (or any com$any. Same ay aruti Kdyo ets

taE bene(its (rom -o0ernment hich hel$s them to increase reser0es and use it into theresearch and de0elo$ment and other acti0ities.

Forein collaboration

ue to collaboration ith Suu!i com$any" #a$an" aruti has ot 0arious (oreintechni

Market Applications & Practices of Maruti Case Studies

Documents

Transcript of Market Applications & Practices of Maruti Case Studies