A

PROJECT REPORT

ON

“A STUDY ON THE MARKETING STRATEGIES OF

MARUTI SUZUKI SWIFT”

FOR PARTIAL FULFILMENT OF THE REQUIREMENT FOR THE

DEGREE OF

BACHELOR OF BUSINESS ADMINISTRATION

(2013-2014)

SUBMITTED TO: SUBMITTED BY:

VAIBHAV SHARMA SHAILENDRA ARYA

PROJECT GUIDE BBA VI - SEM

I.U BAREILLY 1110101120

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CERTIFICATE

TO WHOM IT MAY CONCERN

This is to certify that Mr. SHAILENDRA ARYA student of BBA VI TH

Semester in our institute has successfully completed his Summer Training

Project Entitled.

“A STUDY ON THE MARKETING STRATEGIES OF MARUTI

SUZUKI SWIFT” for the partial fulfillment of the Degree of Bachelor of

Business Administration.

Dr. SM. Mehendi Mr. Vaibhav Sharma

HOD BBA Project Guide

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PREFACE

The project was undertaken to study the Indian 4 Wheeler Automobile

Industry in reference to know the various products and basic services provided

by these Automobile Companies. Various theoretical and practical aspects were

studied in regard to this project. The project is aimed at studying the reason why

the consumer purchases any particular car of any particular segment and what

are those attributes which attracts the consumer towards them and compel them

to make their decisions. Various parameters were analyzed to know the

current status of the Indian 4 wheeler automobile Industry and their

various products which are offered to the customers.

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ACKNOWLEDGEMENT

I would like to take this opportunity to express my deep gratitude to all those

who, directly or indirectly made this project possible.

I have got considerable help and support in making this project report a reality

from many people.

I would like to thank MR. VAIBHAV SHARMA, Lecturer, Law Department,

INVERTIS UNIVERSITY, Bareilly whose endeavor for perfection, under

fatigable zeal, innovation and dynamism contributed in a big way in completing

this project. This work is the reflection of his thought, ideas, concept and above

all his modest effort.

SHAILENDRA ARYA

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CONTENTS

PREFACE

ACKNOWLEDGEMENT

INTRODUCTION OF TOPIC 6-10

OBJECTIVE OF THE STUDY 13

COMPANY PROFILE 14-18

LITERATURE REVIEW 19-25

RESEARCH METHODOLOGY 26-32

DATA PRESENTATION AND ANALYSIS 33-35

FINDINGS 37

RECOMMENDATION 38

CONCLUSION 39

BIBLIOGRAPHY 40

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Indian Automobile Industry: A Review

I. Introduction

The Indian automobile industry is capital and technology intensive with a

high level of economy of scale and diverse linkages with down – stream

industries leading to making a strategic industry to the Industrial Economy

as a whole. The auto – component sector is highly diverse and vibrant,

one of the key downstream linkages to the Indian Automobile Industry and

ending FY 12 the production turnover being Rs.2063 billions by

manufacturing all the key components required for Vehicle building. In

1980s it has followed a planned growth process and has given a major

fillip to the development of Indian Auto – Component sector. The initial

part of development of Indian Auto Component Industry is primarily due to

the implementation of Phased Manufacturing Programme (PMP) as per the

GOI policy enabling the auto component industry to induct new

technologies, new products with a higher level of quality in their

operations enabling them to be swift and effectively localize the

component base; led to developing and creating highly capable,

competent and quality conscious components. Phased Manufacturing

Programme (PMP) for new projects in New Industrial Policy 1991 and for

existing projects in 1994 has been abolished. This followed by Auto Policy

2002 enactment with a Vision: To establish a globally competitive

automotive industry in India and to double its contribution to the economy

by 2010. Accordingly automobile manufacturers (OEMs) and Auto

component manufacturers have made a significant contribution to the

Indian Economy as per the policy objectives. It has reflected in the growth

of Indian Auto Component Industry from FY 02 to FY 12 in terms of

earnings (domestic and export) and encouraging capital investments.

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Indian Auto – Component Industry covers a wide spectrum of industries,

that is, rubber, iron and alloy steel, plastic, oils and grease, fabrication

tools, safety gadgets, air conditioning, radiators, mould making, battery

industry, electrical fittings, interior furnishings, music system, sheet metal

fabrication,

lamps and bulbs, spring manufacturers – it covers basic industry and

white goods. This sector has a bearing on Power consumption and skilled

labour availability and has a considerable contribution in GDP

(Manufacturing) – for FY 12 GDP at factor cost is 2.1%.

II. Automobile Companies in India

Following are the Top Automobile Companies in India :

• Audi

• Honda Motors

• BMW

• Chevrolet

• Daimler Chrysler (Mercedes)

• Fiat

• Ford

• General Motors

• Hindustan Motors

• Hyundai Motors

• Mahindra & Mahindra

• Maruti Udyog

• San Motors

• Skoda

• Tata Motors

• Yamaha Motors

• Hero Moto Corp

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III. Forecasts for Indian Auto Industry:

1. Passenger vehicle market of India will even cross japan by selling about

5 million vehicles by 2017-18.

2. India’s passenger vehicle production projections:

In 2010: 2.6 Million Vehicles

By 2015: 5.1 Million Vehicles

By 2020: 9.7 Million Vehicles

IV. Future Technological Demands

Now from Today, there are some future technological demands which

should be fulfil in future, those demands are listed below:

• Fuel Efficiency

• Emission Reduction

• Safety and Durability

• Cost Effectiveness

• Innovative Features

Some of the innovative features are Key Less Entry,

Electrically controlled mechanisms, enhanced driving control, Composites,

Long life Components, Soft feel interiors.

V. Various Challenges

In Indian Automotive Market, there are some challenges by virtue of which

automobile industry faces lot of problems. These challenges should be

overcome and the challenges are listed below:

• Growth in input costs

• Fuel price volatility

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• Slowdown in demand

• Slowdown in USA

• Production cuts

• Growing competition

• Changing consumer preferences

• Chinese competition

• Environmental issues

• Low R&D orientation

• Infrastructure constraints

• Low ICT interface

VI. Domestic volume growth in 2012-13 slowest in last four years:

The domestic two-wheeler (2W) industry recorded sales volumes of 13.8

million units in 2012-13, a growth of 2.9% over the previous year. This pace of

expansion was significantly slower than the 13.7% volume CAGR posted by the

industry in the last five years. In the past, India’s per capita real GDP growth at 8.6%

(CAGR) over the six year period 2005-2011 had contributed substantially towards

raising the standard of living of households, which in turn had been one of the key

drivers of growth for the country’s automobile industry.

But over 2011-12 and 2012-13, inflationary conditions, firm interest rates, rising

petrol prices as well as weak monsoons adversely impacted disposable incomes

causing a consumption squeeze.

Over the long term, the trend in rising 4W penetration in households in the

addressable income segment (already reached around 80%) is an added concern

implying difficulty in sustaining penetration-driven growth over an extended time

horizon. For the domestic 4W industry to revert closer to its historical growth trend

line any time soon, the pie of total number of target households will need to expand.

This in turn would depend on the pace of India’s economic growth recovery that

could

(a) Boost personal disposable incomes and resultant consumption growth,

(b) Pull up the un-penetrated households from a low income segment to the next

higher income segment,

(c) Further enable increase in the number multiple two-wheeler households, enabling

penetration supported rise in 4W demand.

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VII. Green Motoring

Automobile manufacturers are increasing the thrust on fuel efficiency than

before; the initiatives are mainly through improvements in technology and

introduction of new fuel variants, thereby reducing toxic emissions. It may

be mentioned that China, the EU, Japan and the USA have already

established fuel economy rules or agreements of varying stringency.

The FIA’s 1 declaration for green motoring has set a fuel economy target

of 140 gCO2/km for passenger cars. Such a global fuel economy target

could be used as an international benchmark to assess progress in the

fuel efficiency of the global fleet of new motor vehicles. Some countries

are also undertaking ‘Green Rating’ of automobiles.

VIII. Indian Automobile Industry SWOT Analysis

A. Strengths

1. Domestic Market is large

2. Government provides monetary assistance for manufacturing units

3. Reduced Labour cost

B. Weaknesses

1. Infrastructural setbacks

2. Low productivity

3. Too many taxes levied by government increase the cost of production

4. Low investments in Research and Development

C. Opportunities

1. Reduction in Excise duty

2. Rural demand is rising

3. Income level is at a constant increase

D. Threats

1. Increasing rates of interest

2. Too much competition

3. Rising cost of raw materials

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OBJECTIVES

To study the Marketing Strategies i.e STP of Maruti Suzuki Swift.

S-T-P

Market Segmentation

1. Identify bases for segmenting the market

2. Develop segment profiles

Market Targeting

3. Develop measure of segment attractiveness

4. Select target segments

Market positioning

5. Develop positioning for target segments

6. Develop a marketing mix for each segment

Market Segmentation: determining distinct groups of buyers (segments) with different

needs, characteristics, or behavior. Companies divide large, heterogeneous markets into

smaller segments that can be reached more efficiently and effectively with products and

services that match their unique needs.

Market Targeting

Evaluating each segment’s attractiveness and selecting one or more segments to enter.

Target Market: A set of buyers sharing common needs or characteristics that the company

decides to serve.

Market Positioning: Arranging for a product to occupy a clear, distinctive, and desirable

place relative to competing products in the minds of target consumers.

EXAMPLE: Chevy Blazer is “like a rock.”

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Maruti Suzuki

Maruti Suzuki India Limited (MarutKi Suzuki), commonly referred to as Maruti and

formerly known as Maruti Udyog Limited, is an automobile manufacturer in India. It is a

subsidiary of Japanese automobile and motorcycle manufacturer Suzuki. As of November

2012, it had a market share of 37% of the Indian passenger car market. Maruti Suzuki

manufactures and sells a complete range of cars from the entry level Alto to the hatchback

Ritz, A-star Swift Wagon R, Zen and sedans Dzire, Kisazshi and SX4 in the 'C' segment

Echo, Omni. Multi Purpose vehicle Suzuki Ertiga and Sports Utility vehicle Grand Vitara.

The company's headquarters are on Nelson Mandela Road, New Delhi. In February 2012, the

company sold its ten millionth vehicle in India.

History:

Originally, 18.28% of the company was owned by the Indian government and 54.2% by

Suzuki of Japan. The BJP-led government held an initial public offering of 25% of the

company in June 2003. As of May 2007, the government of India sold its complete share to

Indian financial institutions and no longer has any 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 Alto kei car which

at the time was the only modern car available in India, its only competitors - the Hindustan

Ambassador and 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

those made by Maruti in India, albeit not assembled or fully manufactured in India or Japan

are sold by Pak Suzuki Motors in Pakistan.

The company exports more than 50,000 cars annually and has domestic sales of 730,000 cars

annually. Its manufacturing facilities are located at two

facilities Gurgaon and Manesar in Haryana, south of Delhi. Maruti Suzuki’s Gurgaon facility

has an installed capacity of 900,000 units per annum. The Manesar facilities, launched in

February 2007 comprise a vehicle assembly plant with a capacity of 550,000 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 14,50,000 units

annually.

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About 35% of  all cars sold in India are made by Maruti. The company is 54.2% owned by

the Japanese multinational Suzuki Motor Corporation per cent of Maruti Suzuki. The rest is

owned by public and financial institutions. It is listed on the Bombay Stock

Exchange and National Stock Exchange of India.

During 2007 and 2008, 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.

The Suzuki Motor Corporation, Maruti's main stakeholder, has been a global leader in mini

and compact cars for three decades. Suzuki’s strategy is to utilise light-weight, compact

engines with stronger power, fuel-efficiency and performance capabilities. 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. Maruti Suzuki will be introducing new 800 cc model by Diwali in 2012.The model is

supposed to be fuel efficient, and therefore more expensive. With increasing market

competition in the small car segment, a new model along with the upcoming

WagonR Stingray will be the key fresh products for Maruti Suzuki India (MSI) to defend its

market share amid the ever increasing competition.

Beginnings:

Maruti's history begins in 1970, when a private limited company named 'Maruti technical

services private limited' (MTSPL) is launched on November 16, 1970. The stated purpose of

this company was to provide technical know-how for the design, manufacture and assembly

of "a wholly indigenous motor car". In June 1971, a company called 'Maruti limited' was

incorporated under the Companies Act and Sanjay Gandhi became its first managing

director. After a series of scandals, "Maruti Limited" goes into liquidation in 1977. This is

followed by a commission of inquiry headed by Justice A. C. Gupta, which submits its report

in 1978. On 23 June 1980 Sanjay Gandhi dies when a private test plane he was flying

crashes. A year after his death, and at the behest of Indira Gandhi, the Indian Central

government salvages Maruti Limited and starts looking for an active collaborator for a new

company: Maruti Udyog Ltd being incorporated in the same year.

Suzuki enters

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In 1982, a license and Joint Venture Agreement (JVA) is signed between Maruti Udyog Ltd.

and Suzuki of Japan. At first, Maruti Suzuki was mainly an importer of cars. In India's closed

market, Maruti received the right to import 40,000 fully built-up Suzuki’s in the first two

years, and even after that the early goal was to use only 33% indigenous parts. This upset the

local manufacturers considerably. There were also some concerns that the Indian market was

too small to absorb the comparatively large production planned by Maruti Suzuki, with the

government even considering adjusting the petrol tax and lowering the excise duty in order to

boost sales. Finally, in 1983, the Maruti 800 is released. This 796 cc hatchback is based on

the SS80 Suzuki Alto and is India’s first affordable car. Initial product plan is 40% saloons,

and 60% Maruti Van. Local production commences in December 1983.[10] In 1984 the Maruti

Van, with the same three-cylinder engine as the 800, is released. Installed capacity of the

plant in Gurgaon, reaches 40,000 units.

In 1985 the Suzuki SJ410-based Gypsy, a 970 cc 4WD off-road vehicle, is launched. In 1986

the original 800 is replaced by an all-new model of the 796 cc hatchback Suzuki Alto/Fronte.

This is also when the 100,000th vehicle is produced by the company. In 1987 follows the

company's first export to the West, when a lot of 500 cars were sent to Hungary. Maruti

products had been exported to certain neighboring countries already. By 1988, the capacity of

the Gurgaon plant is increased to 100,000 units per annum.

ARRIVAL OF SMALL CARS IN INDIAN MARKET WAS THE BEST THING TO HAVE HAPPENED TO MARUTI

The race for India's small-car market has begun. But only those among the big four who get

all their strategies right will win this unforgiving contest. The prize: not just the largest

automobile segment, but also survival in this market. They're lined up for the last lap. With

Market India becoming a minefield for the world's largest auto-makers, the Formula I has

become brighter than the red lights that have stopped them in their tracks so far--only the

small car will enable endurance. Bumper-to-bumper, therefore, the combatants are

accelerating towards the small-car segment. Amounting to 60 per cent of the Rs 14,500-crore

automobiles market, and hitherto monopolized by the Rs 8,454-crore Maruti Udyog with its

Maruti 800 and Zen, it's the final frontier between survival and extinction. So far, accustomed

as they are to the priorities of the customer in the developed markets, the global auto-makers

have taken many wrong turns in India. Only now, after many knocks, crashes, and repair

jobs, are they back on track, heading towards their destination.

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But neither the road nor the end-point of their journey is wide enough for all of them. At a

projected 6-lakh units by 2000, demand for cars is still 25 per cent less than the number of F-

150 pick-up trucks sold by the $153.62-billion Ford Motor Co. in 1997. But the importance

of India on the world auto map is strategic. With an estimated total capacity of 58 million

units a year, the global auto industry is racing far a head of the demand of 45 million units.

Markets in North America, Europe, and Japan--which account for 74 per cent of the

demand--have become saturated. Global car-manufacturers will need to plant their feet in a

low-cost, young, stable market to sell their products to create a global supply-base for cars

and components. The first wave of manufacturers simply failed to make a splash in India.

They were revving up for a growth that never happened. Their entry reasoning: since India

had been a small-car market for years, it was only a matter of time before it enlarged to

accommodate bigger, luxury cars. That the logic was flawed has now become evident. India

is still a small-car market for anyone who wants both revenues and profits.

Not surprisingly, Ford (which launched the 1,300-cc petrol and the 1,800-cc diesel Escort

in 1996), the $178.17-billion General Motors (which entered with the 1,600-cc Opel Astra in

1996), and the $72-billion Daewoo Group's Rs 963.37-crore Daewoo Motors (which

launched the 1,498-cc Cielo in 1995) are limping at the starting-block. None of the 3 has

managed to chalk up sales of more than 18,000 units a year. Even Maruti Udyog--a joint

venture between the $12.12-billion Suzuki Motor Corporation of Japan and the Government

of India--has been unable to grow the luxury segment. At 18,000 units in 1997-98, its 1,300-

cc Esteem luxury car's sales fell by 28 per cent. Explains B.V.R. Subbu, 43, Director (Sales

& Marketing), Hyundai Motor India: "Traditional mid-car buyers are turning to small cars;

they are waiting for new technologies." Within 8 months of the 1,468-cc City's launch in

January, 1998, the $48.87-billion Honda Motor has sold 4,180 cars in the Indian market,

which is more than the combined sales (3,317 units) of the Astra and the Escort. But despite

Honda's initial success, the luxury-car segment has plateau, and there seems to be room for

just one player. In the past 3 years, the segment has shrunk in value, dashing car-makers'

hopes of rebuilding their futures in India. Naturally, the only safe haven that remains is the

small-car segment, which is 2.45 lakh units in size. And the only segment expected to grow at

15 per cent a year for the next 5 years. The new millennium cannot but belong to the small

car. However, economics of upstream manufacture will only ensure survival. Sophisticated

downstream skills are essential to make inroads into the tough Maruti Udyog territory.

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BUILDING COMPETITIVE STRATEGIES

But strategies, like cars, must feed on volumes. And how much is the sub-compact segment

likely to yield in 1998-99? Maruti Udyog expects the sales of the Zen to cross the 1-lakh-unit

mark. Assuming that at least a third of the small-car owning population--which includes

customers who have been using the Maruti 800, say, for at least 3 years--graduates to a sub-

compact, that means a market for at least another 1 lakh cars. Even if the 2-lakh mark is not

breached in the next 5 months, 1999-2000 will be the Year Of The Upgrade, the economy

permitting. Which is why the second wave is focused on the small segment--from the mini to

the sub-compact to the small car. On that relatively stable bandwagon is perched the goliath,

Maruti Udyog, 2 newcomers--the $28-billion Hyundai Motor of South Korea and the Rs

7,450.34-crore telco--and one revitalised company, Daewoo Motors. By drawing on their

intrinsic strengths, each is evolving a unique strategy to overtake competition. BT test-drives

the strategic responses of the second wave and assesses their chances of survival.

In less than two decades, India has ascended the ladder of global competitiveness and

improved its business environment for investors through a consistent focus on economic

reforms. Even more creditable is the fact that this growth comes on the back of an ever-

strengthening social infrastructure supported by vibrant democracy. India today is the hotbed

of entrepreneurial activity. Wealth creators and world-beaters are visible in sectors after

sector. India’s economy has more than doubled in real terms since reform began in 1991.

Consumer demand, increasing three to five times faster than the economy, reflects the

aspirations of a vibrant, growing and young middle class; India is home to 20 per cent of the

world’s population under the age of 24. With more than 200 television channels offering a

window to the world, Indians are perhaps the most rapidly evolving consumers across the

globe. Successful economic reforms, favourable media disposition and an overall positive

economic scenario have placed a spotlight on the country. Indian companies are making

overseas acquisitions, capital markets are booming, FIIs are pumping money in, FOREX

reserves are a record high and the political economy has gained credibility in the global

investor community and world media. Innovative products, innovative processes, innovative

manufacturing methods are enticing foreign investors and multinationals to India. What is

`India' for the world? It is a millennia-old civilization. It is also the world's premier IT

services provider. The world's back office A global R & D hub.

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Emerging small-car hub. Repository, arguably, of the world's largest number of engineers,

doctors, accountants, and so on. To bring it all down to a single idea – India is ready with

various touch points: from nation branding to product branding. Car manufacturers

everywhere are struck by India’s engineering and design capabilities. Toyota is planning to

set up a research centre in India. Daimler Chrysler and General Motors have done that

already and Honda Siel, Ford India, Ashok Leyland and Maruti Suzuki spend millions of

dollars on research and development activities and it plans to make India a hub for Suzuki’s

small cars. India may never become a purely export-driven manufacturing country like

Malaysia or Korea or Thailand. Going forward, India is yet better placed as a low cost-

manufacturing base.

Maruti Suzuki Swift

• ABOUT SWIFT - In 2004 Maruti Suzuki launched its new car copy “Maruti Suzuki

Swift ”. Swift is a hatchback model of Maruti Suzuki, which is a of an American

Model Car with more boot space.

• Earlier Maruti was using FIAT engine in its car but now Maruti has launched its own

manufactured K-series engine.

• In swift its using 1.2L K-series engine which is running successfully. Swift is

Specification ENGINE – Capacity - 1,298cc (diesel) 1,197cc (petrol) Number of

Cylinders - 4 (16valve) Maximum Power - 75ps @ 4,000rpm Maximum Torque - 190

Nm @ 2,000rpm Fuel Tank Capacity - 43 litre Available in Petrol and Diesel variants.

Maruti Suzuki Automobiles:

1. 800 (1983) (still distributed to some cities like Guwahati) Competes with Tata Nano,

Maruti Alto and Maruti Omni

2. Omni (launched 1984) Competes with Tata Nano, Tata Venture, Maruti 800 and

Maruti Eeco

3. Gypsy King (launched 1985) India's first indegenious vehicle and first compact SAV,

competes with Mahindra Thar CRDe, Tata Sumo 4x4 and Force Gurkha

4. WagonR (launched 1999) Competes with Nissan Micra Active, Maruti A-star and

Hyundai i10

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5. Swift (launched 2005) Created a Maruti 800 rivalling benchmark, competes with Tata

Vista, Hyundai i20, Skoda Fabia, Volkswagen Polo and Toyota Etios Liva

6. SX4 (launched 2007) Soon to be replaced by the upcoming sedan codenamed YL1,

competes with Ford Fiesta, Hyundai Verna, Honda City, Skoda Rapid, Volkswagen

Vento, Renault Scala and Nissan Sunny

7. Swift DZire (launched 2008) Competes with Mahindra Verito, Toyota Etios, Ford

Classic, Mahindra Verito Vibe, Honda Amaze, Chevrolet Sail, Skoda Fabia and Tata

Manza

8. A-star (launched 2008) Competes with Chevrolet Beat, Nissan Micra Active, Ford

Figo and Maruti Wagon-R Stingray

9. Ritz (launched 2009) Competes with Maruti Swift, Tata Vista, Hyundai Grand i10,

Honda Brio, Nissan Micra, Renault Pulse and Toyota Etios Liva

10.Eeco (launched 2010) Stripped down Versa with a lowered roof, in competition with

Tata Venture, Tata Winger Platinum, and in-house Omni

11.Alto K10 (launched 2010), competes in the economy class with the Tata Indica,

Hindustan Motors Ambassador and Chevrolet Spark

12.Maruti Ertiga (launched 2012), seven seater MPV R3 designed and developed in

India, in competition with Toyota Innova, Mahindra Xylo, Nissan Evalia, Ashok

Leyland Stile and Tata Sumo Grande. In early 2012, Suzuki Ertiga will be exported

first to Indonesia in Completely Knock Down car.

13.Maruti XA Alpha based compact SUV to compete with the Ford EcoSport, Mahindra

Xylo Quanto, Nissan Terrano & Renault Duster will be launched in the year 2014

14.Maruti Alto 800, launched in 2012, Competes with Tata Nano

15.Maruti Stingray, launched in 2013, Competes with Maruti A-star, Chevrolet Beat and

Chevrolet Sail

Discontinued Automobiles:

1. Gypsy E (1985–2000)

2. 1000 (1990–2000)

3. Zen (1993–2006) Replaced by the Zen Estilo

4. Esteem (1994–2008) Replaced by the Swift DZire

5. Baleno (1999–2007) Replaced by the SX4 sedan

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6. Baleno Altura (1999–2003)

7. Versa (2001–2010) Replaced by the Eeco

8. Grand Vitara XL7 (2003–2007) Replaced by the compact Escudo/Vitara

9. 800 (1983-2012) Replaced by the Alto 800

10.Alto (2000-2012) Replaced by the Alto 800

11.Zen Estilo (2006–2013)

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Literature Review

Introduction:

Demographically and economically, India’s Automotive industry is well-

positioned for growth, servicing both domestic demand and, increasingly, export

opportunities. A predicted increase in India’s working-age population is likely to help

stimulate the burgeoning market for private vehicles. Rising prosperity, easier access to

finance and increasing affordability is expected to see four-wheelers gaining volumes,

although two wheelers will remain the primary choice for the majority of purchasers, buoyed

by greater appetite from rural areas, the youth market and women. Domestically, some

consolidation or alliances might be expected, driven by the need for access to better

technology, manufacturing facilities, service and distribution networks. The components

sector is in a strong position to cash-in on India’s cost-effectiveness, profitability and

globally-recognized engineering capabilities. As the benefits of collaborations become more

apparent, super-specialists may emerge in which the automobile is treated as a system, with

each specialist focusing on a sub-system, akin to the IT industry.Though this approach is

radical, it could prove an important step in reducing complexity and investment requirements,

while promoting standardization and meeting customer demands.

Manufacturers are already planning for the future: early advocates of technological and

distribution alliances have yielded generally positive results, enabling domestic OEMs to

access global technology and experience, and permitting them to grow their ranges with

fewer financial risks. This exciting outlook for the industry is set against a backdrop of two

potentially game-changing transportation trends – the gradual legislative move towards

greener, gas-based public transport vehicles, and a greater requirement for urban mass

mobility schemes to service rapidly-expanding cities.

• Green Revolution: In a price-conscious economy such as India’s, the shift towards green

vehicles will be slow unless spurred by government mandates. Although the major players

are already equipped with the necessary capabilities to develop cleaner vehicles, they do not

see much merit in commercializing these technologies until the green revolution gains

momentum – most likely through changes in political legislation – and it achieves the market

scale required for commercial viability.

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Manufacturers are placing greater faith in dual-fuel technologies than in battery-powered

alternatives because the necessary support infrastructure, such as recharge stations, is not yet

in place for the widespread adoption of the latter. The launch of electric motorcycles could

have a significant impact on the market, given that motorcycles account for the majority of

two-wheeler sales in India. Manufacturers of four-wheelers and commercial vehicles in

particular stress the importance of optimizing conventional combustion engines before

experimenting too radically with costly new technologies.

• Mobility Revolution: Use of public transport in India has waned as private vehicle

ownership has boomed, but increasing strain on the road infrastructure in major cities means

public investment is likely in Urban Mass Mobility Schemes such as metro systems and

buses. The automotive industry is unlikely to lose much of its customer base in the near-term,

even as these schemes become more prevalent, because the socio-economic statement of car

ownership will continue to make private vehicles desirable. At present there is a lack of

clarity in the automotive industry over the role it will play in any mobility revolution.

Although some industry experts believe the impact of the mobility revolution will be minimal

in the short-term, there may be opportunities for manufacturers to become involved with the

public sector in areas such as improving links between different modes of transport.

Conclusion:

Current low car penetration, rising prosperity and the increasing affordability of

private vehicles offer a healthy prognosis for the Indian automotive industry. The companies

benefiting most from this evolving landscape will be those who forge judicious alliances and

resource-sharing agreements, who prepare for the growing importance of green technologies,

and who remain flexible enough to respond to the twin needs of private light transport and

mass transport schemes.

India is home to a vibrant automobile of more than 40 million vehicles. It has been one of the

few worldwide which saw growing passenger car sales during the recession of the past two

years. In fact, in 2009-10 it has recorded its highest volumes ever. It is believed this upward

trend will be sustained in the foreseeable future due to a strong domestic market and

increased thrust on exports.

Small car revolution: who cares about congestion, pollution Small cars have had

it good for quite a while, but the market could undergo a drastic transformation with the

advent of ultra-cheap, small cars led by the Tata’s Rs 1 lakh model.

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The Tata car, the stuff of dreams millions of potential vehicle owners haven’t yet dared to

dream, is slated to roll out of its factory in Singur, West Bengal, in 2008. The state

government has done everything in its powers to facilitate the project, from land acquisition

to fiscal breaks. At the moment, details are under wraps.

Impressionistic media reports and hints from carmakers point to a stripped-down car perhaps

with a 30-horsepower engine, in the range of 700 cc engine displacement with three

cylinders. It will have a capacity of four or five passengers. Bosch is said to be designing a

special fuel-injection system for the petrol version and a CRDi unit for the diesel version.

Industry response has been cautious. Practically all of India’s manufacturers offer or plan to

offer a variety of small cars in different price ranges. For a long time, the Maruti 800 model

of Maruti Udyog Limited has set the bottom price, now at Rs 2.16 lakhs for the base model.

Without taxes its cost can go down to Rs 1.4 lakhs. Currently, nearly all Indian small cars are

in the price range of Rs 2-4 lakh. In relation to the global price range all these cars fall below

the US $10,000 tag. The Tata will add a layer at the base of the pyramid, with a production

capacity expected to exceed 350,000 units annually.

Tata car will set the trend Industry argues that if India does not enter this segment, the

Chinese will. Its mantra is: build volumes at the lower end, at lesser margins, and remain

profitable. The availability of local skills and material, frugal engineering and an indigenous

manufacturing base is the right recipe. Decentralised assembly to feed regional markets, as

Tata Motors has planned, can keep logistics costs to a minimum.

INDIA: THE

SOON TO BE SMALL-CAR HUB

Small cars constitute about 78 percent of the domestic demand, making India the third-largest

producer of small cars after Japan and Brazil. Therefore, the government has decided to

launch a program to make India a small car hub in the future – a recent reduction in excise

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duties from 24 percent to 16 percent exclusively for small cars being an initiative in this

direction. The major players not present in this segment have also drawn up plans for entering

this segment in the near future. Players with expertise in small car, such as Maruti and

Hyundai, have formulated plans for ramping up production capacities. It is likely that with

the small car volume increase (both due to domestic volumes and exports) in the next decade,

domestic players, such as Tata Motors, would become strong global players.

Rising raw material costs, especially that of steel, and production delays can force Tata

Motors to raise the price though. Auto market watcher Murad Ali Baig says, “Rs 1 lakh

seems unachievable. Buyers’ preference for comfort and performance and harsher standards

will push up costs.” The margin of supplying components for small cars will have to be far

too low compared to normal standards. But no one is coming out with data.

The lowest cost of the base model may grip customer attention but its variants with improved

features—power-steering and air-conditioning among others—may push up both prices and

margins. Even though most carmakers have begun eyeing the small car market in India, it is

not clear who else might want to enter this segment. A price war may ensue. So far only Bajaj

Auto Ltd, in a tie-up with France’s Renault group, has announced plans to make a Rs 1.2-

lakh car. The ranks may swell with more players planning models priced somewhere between

a high-end two-wheeler and Maruti 800. The look of the Tata car and customer response will

be decisive.

Three players—Maruti Udyog, Tata Motors and Hyundai—have captured nearly 86 per cent

of the car market in India. Global analysts CSM forecast that Tata Motors, aiming to close the

gap with Maruti Udyog, will be number one by 2012. Maruti has not yet risen to the bait. The

gossip is Maruti 800 might be reinvented to beat the competition. Hyundai has not ventured

into the ultra-low-cost class.

India is home to a vibrant automobile of more than 40 million vehicles. It has been one of the

few worldwide which saw growing passenger car sales during the recession of the past two

years. In fact, in 2009-10 it has recorded its highest volumes ever. It is believed this upward

trend will be sustained in the foreseeable future due to a strong domestic market and

increased thrust on exports.

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The Indian economy has grown at an average rate of around 9 percent over the past five years

and is expected to continue this growth in the medium term. This is predicted to drive an

increase in the percentage of the Indian population able to afford vehicles. India’s car per

capita ratio (expressed in cars per 1,000 population) is currently among the lowest in the

world’s top 10 auto markets.

The twin phenomena of low car penetration and rising incomes, when combined with

increasing affordability of cars, are expected to contribute to an increase in India’s

automobile demand.

The Indian automobile industry has seen interesting dynamics in recent times with the effect

of the global downturn, followed by recovery in domestic demand. The future of the industry

in the medium term based on current trends, is analyzed here along two broad themes in the

global automobile industry:

• Growth

• Consolidation

As discussed below, the nature of demand in the Indian automotive industry and the

associated drivers are likely to take it along a path, which is different from the evolving

global automotive landscape.

Growth: India’s automobile market has grown steadily over the last seven to eight

years, with the exception of the previous two years where the effects of the global downturn

were felt, primarily in sales of commercial vehicles. However, even during the downturn, the

two-wheeler and three wheeler segments, which were until then experiencing low growth or

losing volumes, bucked the trend. As Figure 5 shows, India’s vehicle demand is quite

different from other top automobile markets – with the exception of China – in that two-

wheelers constitute a significant portion of vehicle demand (more than 3/4th of the Indian

market is in two-wheelers).

Affordability: While quite a few new vehicles launched in the Indian market have

been developed locally, vehicle affordability remains a significant concern as seen in Figure

6. Although the price of an average motorcycle in India (about USD 900) is comparable to

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the average per capita income, the prices of passenger cars have a long way to go. Although

the entry level car (Nano) is priced at around USD 2,500, the passenger car market could

grow multi-fold if there is a break-through of another price level in the years to come. John

Flintham, global CEO of Amtek Auto, believes four-wheelers are particularly well placed

to take advantage of these changing trends. “If you look at the Tata Nano, people buying two-

wheeler bikes who have a bit more disposable income and can now afford to buy a car

instead. I think you’re going to see a doubling of sales over the next three to four years and I

think that’s going to be driven by both domestic demand and by India becoming a small car

export hub.” Ford India Managing Director, Michael Boneham, believes changing

demographics in India will see auto sales scale new heights. He argues that the increasing

number of educated people entering the working age bracket will provide a fertile

environment for a buoyant economy and healthy demand for private light transport. “The

Indian auto industry should have double digit growth levels for the next five years and

beyond, depending on taxation, legislation, infrastructure and global conditions,” .

Fuel Economy: The volume leaders across two-wheelers and four-wheelers in India are

companies which have been able to offer products with the globally acknowledged best-in-

class fuel economy rates, as well as affordable total cost of ownership. For example, while

the US is setting norms for cars to achieve 35 mpg1 on petrol2 , a majority of Indian cars

already offer that much3, while the leading class bikes offer up to 200 mpg3 and more in

some cases. This performance expectation will only increase in the future. Fuel economy will

also be an important factor in the truck sector, with Marc Llistosella, CEO and Managing

Director of Daimler India Commercial Vehicles, noting that a vehicle’s mpg rating will

become an increasingly important purchasing factor. “No one buys a truck for leisure,” he

says, “greater efficiency means better fuel consumption and this is in our interest. Some 65

percent of the total cost of ownership of a truck is fuel consumption. This goes directly to the

profit and loss of the customer”

Rural Market: The automobile industry has yet to fully tap into demand from rural

areas. Previously, consumers from these areas would need to go to automobile dealerships in

towns and cities for their vehicle purchases. However, in recent years, market players have

made overtures to rural consumers, with encouraging sales. Figure 10 shows a gradual but

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steady growth in demand for passenger vehicles from rural areas, accompanying the growth

of the overall segment. While the Indian automobile industry seeks to double total sales on

the back of steady growth over the next decade, these relatively under-tapped demand

segments (rural markets, youth, women and luxury cars) are expected to play a significant

role.

MARKETING STRATEGIES OF MARUTI SUZUKI INDIA LIMITED:

In earlier days when the market was dominated by only few brands like Ambassador &

Premier Padmini, Maruti Suzuki India Limited entered the Indian market with different

strategy. The strategy of the company was to offer a compact, modern and fuel efficient car.

Maruti released its first Maruti 800 car on 14 December 1983 to fulfill the dreams of Indian

customers and became the market leader. Since 1983 till date Maruti Suzuki gradually

offered several choices to the consumer. Due to aggressive competitors today Maruti Suzuki

believes in Innovative Marketing Strategies. With the changing needs, wants & requirements

of customers and markets, Maruti Suzuki is altering their Brand Positioning, Advertising and

Distribution strategy.

EFFICIENT PRODUCTION AND DISTRIBUTION CAPABILITIES

IMPRESSIVE GLOBAL HOLD

COME UP WITH NEW MODELS & SURPRISE MARKETERS

GRABBING COMPACT CAR OPPORTUNITY

SHOWED GREAT SOCIAL RESPONSIBILITY

GREAT MANAGEMENT CONTROL

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RESEARCH METHODOLOGY

RESEARCH METHODOLOGY: It is a way to systematically solve the

research problem. It may be understood as a science of study how research is done

scientifically. In it we study the various steps that are generally adopted by the

researcher in studying his research problem along with the logic behind them.

Research:

The word research is composed of two syllables, re and search.

“Re” is a prefix meaning again, anew or over again

“Search” is a verb meaning to examine closely and carefully, to test and try, or to

probe. Together they form a noun describing a careful, systematic, patient study and

investigation in some field of knowledge, undertaken to establish facts or principles.

Research Process:

Steps in Research Process:

1. Formulating the Research Problem

2. Extensive Literature Review

3. Developing the objectives

4. Preparing the Research Design including Sample Design

5. Collecting the Data

6. Analysis of Data

7. Generalization and Interpretation

8. Preparation of the Report or Presentation of Results-Formal writes ups of

Conclusions reached.

1st step: Formulating the research problem:

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It is the first and most crucial step in the research process.

Main function is to decide what you want to find out about.

2nd step: Reviewing the literature:

Essential preliminary task in order to acquaint yourself with the available body

of knowledge in your area of interest.

3rd step: The formulation of objectives:

Objectives are the goals you set out to attain in your study.

They inform a reader what you want to attain through the study.

It is extremely important to word them clearly and specifically.

4th step: Preparing the research design:

Research design is the conceptual structure within which research would be

conducted. The function of research design is to provide for the collection of relevant

information with minimal expenditure of effort, time and money.

5th step: Collecting data:

Having formulated the research problem, developed a study design, constructed a

research instrument and selected a sample, you then collect the data from which you

will draw inferences and conclusions for your study. Depending upon your plans, you

might commence interviews, mail out a questionnaire, conduct experiments and/or

make observations.

6th step: Analysis of data:

Processing and analyzing data involves a number of closely related operations which

are performed with the purpose of summarizing the collected data and organizing

these in a manner that they answer the research questions.

7th step: Generalization and Interpretation

8th step: Reporting the findings:

Writing the report is the last, and for many, the most difficult step of the research

process.

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Research Design: A research Design is a complete scheme or programme of

the research. It includes an outline of what the investigator will do from research

problem formulation to final analysis of data.

Sources of Data:

Primary Data

Secondary Data

Primary data:

These are those which are collected a fresh (again but in a new or different way) and

for the first time and thus happen to be original in character and known as Primary

data.

It is based on primary source of information.

Methods of Collecting Primary Data: There are several methods of

collecting primary data:

Direct Personal Observation : Observation involves recording the behavioral

patterns of people by investigator’s own direct observation without asking from the

respondent.

Its methods:

Structured or unstructured:

Structured observation, the researcher decides in advance what is to be

observed, under what conditions observation will be made.

Unstructured observation, the researcher monitors all aspects of the

phenomenon that seem relevant. He does not decide in advance what is to be

observed, how observations are to be recorded etc.

Disguised or undisguised:

Disguised observation, respondents are unaware they are being observed

and thus behave naturally.

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Undisguised observation, respondents are aware they are being observed

and thus they may behave differently.

Uncontrolled or controlled

Uncontrolled observation involves observing behavior as it takes place

in the natural environment.

Controlled observation involves observing behavior in an artificial

environment.

Direct or Indirect Observation

Direct observation, the behavior of a person is observed as it occurs.

Indirect Observation, some record of past behavior is observed.

Human -Mechanical Observation

Human observation, trained observers are hired to observe.

Mechanical observation, devices such as eye cameras are used for

observation.

Interview : It is a technique that is primarily used to gain an understanding of the

underlying reason and motivation for people’s attitudes, preferences or behavior.

Types of interview:

a) Personal interview

It is a face to face discussion between the interviewer and the interviewee.

b) Telephone interview

This is an alternative form of interview to the personal, face-to-face interview.

This method of collecting information consists in contacting respondents on

telephone itself.

Questionnaire : It is a list of questions to be asked from the respondents. It also

contains a suitable space where the answers can be recorded.

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Preparation of questionnaire :

1. Deciding on the information required

2. Formulation of Questions and Format

Open-ended Questions: In these types of questions the respondent is asked to

give a reply to a question in his/her own words. No answers are suggested.

Dichotomous Questions- These are the questions which ask the respondent to

choose between two given alternatives. They are also called close ended.

Multiple-choice Questions- These are the extensions of dichotomous

questions, here the alternatives are more than two.

Ratings: This is a question of the type, selecting of answer according to the

rating of the person.

Semantic Differential-This type of question is similar to the rating scale.

3. Deciding Question Wording

4. Appropriate Sequence of Questions/Putting Questions into a meaningful order

5. Pre-Testing Of Questionnaire

6. Review of Questions For Improvements

Secondary data :

It means that are already available that is they refer to the data, which have

already been collected and analyzed by someone else for its own use and

later the same data is used by a different user or person.

It is based on secondary source of information.

Methods of collecting Secondary data:

1. Published data

2. Unpublished data

Published data: in published data following are the sources:

1. Published thesis

2. Government reports

3. International reports

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4. Newspaper and journals

5. Official publications

6. By product of Administration

7. Commission’s reports

Unpublished data: in unpublished data following are the sources:

1. Inquiry committees

2. Thesis submitted to a university for the award of PhD degree

3. Unpublished material found with Trade associations, labor organizations and

chambers of commerce.

Research design:

A research Design is a complete scheme or programme of the research. It includes an outline

of what the investigator will do from research problem formulation to final analysis of data.

Treatments:

The different conditions under which Experiment and control groups are put up are usually

referred to as “treatments”.

Experiments:

The process of examining the truth of a statistical hypothesis, relating to some research

problem, is known as an Experiment.

Experimental unit:

A Person or a group of persons or a plot of land etc. on which different treatments are applied

are termed as experimental units.

Variables:

A variable is a property that takes on different values. In other words, a variable is something

that varies. A variable is a symbol to which numerals or values are attached.

Classification of sampling techniques:

Sampling Techniques

Probability sampling techniques Non – probability sampling techniques

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Simple random sampling Convenience sampling

Systematic sampling Judgmental sampling

Stratified sampling Quota sampling

Cluster sampling Snow ball sampling

ANALYSIS TECHNIQUES :

Qualiitative analysis is performed using the data collected at each outlet to estimate the

presence of HONDA Activa.

Tools Utilized :

Percentage Analysis

Graph Chart

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DATA PRESENTATION AND ANALYSIS

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FINDINGS

SEGMENTING

B- Segmentation car

Premium hatchback segment

18-45 years old

Feature loving

User friendly

people who prefer value for money compact car

TARGETING

Middle class and upper-middle class

Youngsters and young business people

Customer seeking a stylish, powerful and a premium car for city driving

POSITIONING

Stylish car

A Vehicle that provides comfort, power and luxury in small package

Style, modern looks and young attitude

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RECOMMENDATIONS

• Maruti Suzuki should had to focus on Research and Development sector.

• Companies should had to launch Swift in alternative channels as like CNG and LPG

Engines Vehicle.

• Maruti Suzuki should improve it’s after sale service.

• Show room demonstration should be given at frequent time interval and feedback

should be considered positively.

• Customer considers quality as their first preference, so the company should give more

stress on this.

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CONCLUSION

Maruti Udyog Ltd., a joint venture between the Government of India and the Suzuki Motor

Corporation of Japan was India’s largest automobile company in 2005. It operated in the

passenger vehicle market and manufactured affordable and fuel efficient cars for the Indian

masses. Maruti 800 was its flagship small sized car and was the best selling car in India since

decades. In 2005, Suzuki launched their global car ‘Swift’ in international markets and later

in India. Swift was the first stylish compact car from the stable of Maruti and was a

differentiator from its earlier products. The launch of Swift had brought Maruti in lime-light

and various global international automobile manufacturers announced their plans to boost

their investments in India and launch competing cars. The competition was expected to

intensify to grab the burgeoning customer base.

The Indian car market currently appears to be at a crossroads, where car marketers are

attempting to change customer perceptions of their brands and where specific buying

motivations appear to be replacing generalities.

This meanwhile, is quite unlike the west where buyers consider aesthetics, comfort and

safety, not necessarily in that order, before finalising a purchase. “It’s smarter to think about

emotions and attitudes, if marketers are to do a better job of marrying what a car offers to the

consumer’s image of the offerings.

The mindset of the Indian consumer is such that he is delighted if he buys a pen a little

cheaper than his neighbor. Things are, however, slowly changing and customers at the upper

end of the market are now ready to pay more for more. I hope that this approach will soon

enter the small car segment, maybe not with the same intensity.

“Success will largely be determined to the extent a company can differentiate itself in terms

of intangibles that go with a car”. Thus, success could well hinge on the best of bundle of

services that a carmaker can provide. Maruti Suzuki grew from zero to the 500,000 mark and

the number One sales spot in India in just five years. Looking at the present scenario it can be

said that though there is lot of competition in the auto world Maruti Suzuki is picking up

well.

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BIBLIOGRAPHY

Books & Journals

Marketing Management by Phillip Kotler

Brand positioning by Subroto Sengupta

Positioning: The Battle for your mind by Al Ries & Jack Trout

Ahluwalia, I.J. (1988). "Industrial Policy and Performance in India" in Lucas, R.E.B.

and G.F. Papanek (eds.) (1988). The Indian Economy: Recent Development and

Future Prospects. Delhi: Oxford University Press, pp. 151-162

Ahluwalia, I.J. (1996). "India's Opening up to Trade and Investment" in I.J.

Ahluwalia, Rakesh Mohan and Omkar Goswami, Policy Reform in India . Edited by

Charles Oman. Paris: OECD, pp. 17-41

AIAM (1999). Recommendations for Developing Indian Automotive Policy.

Association of Indian Automobile Manufacturers, New Delhi

Newspapers, Journals & Magazines

Business World

The Economist

Economic Times

Auto-car India

WEBSITES:

www.tatamotors.com

www.Yahoofinance.com

www.marutisuzuki.com

www.google.com

www.msn.com

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