GENERAL INFORMATION OF MARUTI SUZUKI

Maruti Suzuki India Limited commonly referred to as Maruti and formerly known as Maruti Udyog Limited is an automobile manufacturer in India. It is subsidiary of Japanese automobile and

Motorcycle manufacturer Suzuki. As of November 2012, it had a market share of the company are better than to other motter company 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, Celerio, A-Star, Swift, Wagoner, Zen and sedans DZire, Kizashi and SX4, in the other car are segment Eeco, Omni, Maruti Suzuki Purpose vehicle Suzuki Ertiga and Sports Utility vehicle Grand Vitara.

The company's headquarters are at

Nelson Mandela Road, New Delhi.

In the February 2012, the company sold its ten millionth vehicles in India. History Logo of Maruti Udyog

Maruti Udyog Limited was established in February 1981, though the actual production commenced only in 1983. It started with Maruti 800, based on the Suzuki Alto car which at the time was the only modern car available in India. Its only competitors were Hindustan Ambassador and Premier Padmini.

Originally, 74% of the company was owned by the Indian government, and 26% by Suzuki of Japan. 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.

Chronology 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. "Maruti Limited" goes into liquidation in

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1977. On 23 June 1980 Sanjay Gandhi dies when a private test plane he was flying crashes behest of Indira Gandhi, the Indian Central Suzuki enters In 1982, a license & 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 OF sales.

Production commences in December 1983. 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/Fronted. 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. Market liberalization In 1989 the Maruti 1000 is presented after having been shown earlier. This 970 cc, car in India

In 1992 Suzuki increases its stake in Maruti to 50 percent, making the company a 50-50 JV with the Government of India the other stake holder. A flow of new models begin in the early nineties. In 1993 the Zen, a modern 993 cc, hatchback which is later exported globally as the Suzuki Alto. In 1994 the 1298 cc Esteem appears, a more luxurious redesigned Maruti 1000. This and other Marut is begin appearing in a plethora of different equipment levels, to better suit India's increasingly discerning consumers. A Zen Automatic arrives in 1996, as does the Gypsy King, a 1.3 liter version of the compact off-roader, and a minibus version of the Omni (the Omni E).

In 1994 Maruti Suzuki produces its 1 millionth vehicle since the commencement of production, being the first company in India to do so. This is still not enough in a booming market and the next year Maruti's second plant is opened, with annual capacity reaching 200,000 units. Maruti also launches a 24-hour emergency on-road vehicle service, the first of its kind in the country. In 1996 the United Front government is formed, with Murasoli

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Mr. S.S.L.N. Bhaskarudu as the Managing Director, as the then current Managing director

R.C. Bhargava was completing his tenure. This creates a conflict with Suzuki , discussed closer in the Joint venture related issues section.

In 1998 the new Maruti 800 is released, the first change in design since 1986. This is simply a facelift of the existing model, to ensure steady sales. Also, the two millionth vehicles are produced. Other news include the Zen D , a 1527 cc diesel hatchback and Maruti's first diesel vehicle. The Omni van and microbus is also redesigned. The next year the Omni bus arrives in a high roof version, the Omni XL. The 1.6 litter Maruti Baleno three-box saloon, advertised as the 'Maruti Suzuki Baleno', also appears. This is Maruti's biggest car yet. Finally, in what is a very busy year, the Wagon R is launched. In 2000 Maruti becomes the first car company in India to launch a Call Center for internal and customer services. The new Alto model is also released, somewhat larger and more modern than the 800. The estate Baleno Altura is also shown, while IDTR (Institute of Driving Training and Research) is launched jointly with the Delhi government to promote safe driving habits.

In 2001 Maruti True Value, selling and buying used Maruti Suzuki, is launched in Bangalore and Delhi, later in Mumbai and elsewhere. In October of the same year the Maruti Versa sees the day, a bigger engine and more luxurious microbus than the Omni. It never catches on in the market and is discontinued by late 2009, only to be replaced by a cheaper, stripped-down version called Eeco. Customer information centers are also launched in Hyderabad, Bangalore and Chennai.

In 2002 the Esteem Diesel appears, as does Maruti Insurance. Two new subsidiaries are also started: Maruti Insurance Distributor Services and Maruti Insurance Brokers Limited. Suzuki Motor Corporation increases its stake in Maruti to 54.2 percent. In 2003 the new Suzuki Grand Vitara XL-7 appears, while the Zen and the Wagon R are upgraded and redesigned. The four millionth Maruti vehicles are built and they enter into a partnership with the State Bank of India. Maruti Udyog Ltd is listed on BSE and NSE after a public issue, which is oversubscribed tenfold. In 2004 the Alto becomes India's new

the financial year 2003-04 with an annual sale of 472,122 units, the highest ever since the company began operations 20 years earlier, and

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the fiftieth lakh (5 millionth) car rolls out in April, 2005, with overall sales growing by 15.8%. The 1.3 L Suzuki Swift five-door hatchbacks also appear. 2004-05 marked another record year (487,402 domestic sales) and exports reached 48,899 cars to about fifty different countries. The United Kingdom took the lion's share, with 10,623 deliveries.

In 2006 Suzuki and Maruti set up another joint venture, "Maruti Suzuki Automobiles India", to build two new manufacturing plants, one for vehicles and one for engines. Cleaner cars were also introduced, with several new models meeting the new “Bharat Stage III " standards. In February 2012, Maruti Suzuki sold its ten millionth vehicles in India. For the Month of July 2014, it has a Market share of

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(1.0) EXECUTIVE SUMMARY

Our Financial Analysis project is on “Maruti Suzuki Ltd.”. Main objective of this project is to know the financial strengths and weaknesses of Maruti Suzuki Ltd. For that we had references the one consecutive year annual report from 2014. In addition to these annual reports of Maruti Suzuki Ltd we had also used various Books and Web based information to cover the current trends of the company and its competitors, as well as the whole industry.

To analyze the firm, we have used various calculation based ratios and also study some other statements like Trends analysis, Cash flow statements, DU-Pont Charts etc.

We found that the Maruti Suzuki Ltd is doing well in general. Most of the graphs and Ratios are supporting us to say Maruti Suzuki a good company. Maruti Suzuki is consistently going ahead. Maruti Suzuki has done a good job in the market of detergent and soaps, but still there is a space for Maruti Suzuki in various other products, and also the company has to concentrate on spreading its business as well. Though the sales of a company have decreased, the Net profit is increase slightly. But the decrease in the sales is not a good sign for company.

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(1.1) COMPANY NAME AND ADRESS

1 Corporate Identity Number (CIN) of the Company : L34103DL1981PLC0113752 Name of the Company :Maruti Suzuki India Limited

3 Registered address :1, Nelson Mandela Marg, Vasant Kunj, New Delhi-1100704 Website :www.marutisuzuki.com5 E-mail id: investor@maruti.co.in6 Financial year reported 2013-14

7 Sector(s) that the Company is engaged in (industrial activitycode-wise):Automobile8 List three key products/services that the Company:manufactures/provides as

Passenger Cars, Maruti Suzuki Utility Vehicles (MUV), Maruti Suzuki-Purpose Vehicles (MPV)9 Total number of locations where business activity isundertaken by the Company:

i. Number of international locations Company manufactures cars in India onlyii. Number of national locations Company manufactures cars at its

Gurgaon and Manesar plants located inHaryana, India

10 Markets served by the Company : Local/State/National/InternationalDomestic: across India

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(1.2) BRIEF HISTORY AND DESCRIPTION OF BUSINESS

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 (MARUTI SUZUKI) was established in February 1981, though the actual production commenced in 1983 with the Maruti 800, based on the Suzuki Alto key 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 Suzuki 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.

About 35% of all cars sold in India are made by Maruti. The company is 54.2% owned by the Japanese Maruti Suzukitinational 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. Maruti Suzuki offers 15 models, Maruti 800, Alto, Maruti Alto 800, WagonR, Estilo, A-star, Ritz, Swift, SwiftDZire, SX4, Omni, Eeco, Gypsy,GrandVitara, Kizashi and the newly launched Ertiga. Swift, Swift DZire, A-star and SX4 are manufactured in Manesar, Grand Vitara and Kizashi are imported from Japan as completely built units (CBU), all remaining models are manufactured in Maruti Suzuki's Gurgaon Plant. The company is believed to be moving towards the introduction of a new version of Maruti 800 by November 2012, which will be more fuel efficient, though slightly costlier than Alto and existing Maruti 800. 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 utilize light-weight, compact engines with stronger power, fuel-efficiency and

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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.

BeginningsMaruti'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 entersIn 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. 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/Fronted. 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

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exported to certain neighboring countries already. By 1988, the capacity of the Gudgeon plant is increased to 100,000 units per annum.

Market liberalizationIn 1989 the Maruti 1000 is presented after having been shown earlier. This 970 cc, three-box is India’s first contemporary sedan. By 1991 65 percent of the components, for all vehicles produced, are indigenized. Meanwhile, the liberalization of the Indian opens new opportunities but also brings more competition to the segments in which Maruti operates. In 1992 Suzuki increases its stake in Maruti to 50 percent, making the company a 50-50 JV with the Government of India the other stake holder.

A flow of new models begin in the early nineties. In 1993 the Zen, a modern 993 cc, hatchback which is later exported globally as the Suzuki Alto. In 1994 the 1298 cc Esteem appears, a more luxurious redesigned Maruti 1000. This and other Marutis begin appearing in a plethora of different equipment levels, to better suit India's increasingly discerning consumers. A Zen Automatic arrives in 1996, as does the Gypsy King, a 1.3 liter version of the compact off-roader, and a minibus version of the Omni (the Omni E).

In 1994 Maruti Suzuki produces its 1 millionth vehicle since the commencement of production, being the first company in India to do so. This is still not enough in a booming market and the next year Maruti's second plant is opened, with annual capacity reaching 200,000 units. Maruti also launches a 24-hour emergency on-road vehicle service, the first of its kind in the country. In 1996 the United Front government is formed, with Murasoli Maran new Industries Minister. On 27 August the following year the government nominates Mr. S.S.L.N. Bhaskarudu as the Managing Director, as the then current Managing director R.C. Bhargava, was completing his tenure. This creates a conflict with Suzuki, discussed closer in the Joint venture related issues section.

In 1998 the new Maruti 800 is released, the first change in design since 1986. This is simply a facelift of the existing model, to ensure steady sales. Also, the two millionth vehicles are produced. Other news includes the Zen D, a 1527 cc diesel hatchback and Maruti's first diesel vehicle. The Omni van and microbus is also redesigned. The next year the Omni bus arrives in a high roof version, the Omni XL. The 1.6 litre Maruti Baleno three-box saloon, advertised as the 'Maruti Suzuki Baleno', also appears. This is Maruti's biggest car yet. Finally, in what is a very busy year, the Wagon is launched.

Maruti Alto, introduced in 2000

In 2000 Maruti becomes the first car company in India to launch a Call Center for internal and customer services. The new Alto model is also released, somewhat larger and more modern than the 800. The estate Baleno Altura is also shown, while IDTR (Institute of Driving Training and Research) is launched jointly with the Delhi government to promote safe driving habits. In 2001 Maruti True Value, selling and buying used Maruti Suzuki, is launched in Bangalore and Delhi, later in Mumbai and elsewhere. In October of the same

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year the Maruti Versa sees the day, a bigger engine and more luxurious microbus than the Omni. It never catches on in the market and is discontinued by late 2009. Customer information centers are also launched in Hyderabad, Bangalore and Chennai. In 2002 the Esteem Diesel appears, as does Maruti Insurance. Two new subsidiaries are also started: Maruti Insurance Distributor Services and Maruti Insurance Brokers Limited. Suzuki Motor Corporation increases its stake in Maruti to 54.2 percent.

In 2003 the new Suzuki Grand Vitara XL-7 appears, while the Zen and the Wagon R are upgraded and redesigned. The four millionth Maruti vehicles are built and they enter into a partnership with the State Bank of India. Maruti Udyog Ltd is listed on BSE and NSE after a public issue, which is oversubscribed tenfold. In 2004 the Alto becomes India's new bestselling car, overtaking the Maruti 800 which had been number one for nearly two decades. The five-seater Versa 5-seater, a new variant, is created while the Esteem undergoes cosmetic changes and is re-launched with a price cut. Maruti Udyog closed the financial year 2003-04 with an annual sale of 472,122 units, the highest ever since the company began operations 20 years earlier, and the fiftieth lake (5 millionths) car rolls out in April, 2005, with overall sales growing by 15.8%. The 1.3 L Suzuki Swift five-door hatchbacks also appear. 2004-05 marked another record year (487,402 domestic sales) and exports reached 48,899 cars to about fifty different countries. The United Kingdom took the lion's share, with 10,623 deliveries.

In 2006 Suzuki and Maruti set up another joint venture, "Maruti Suzuki Automobiles India", to build two new manufacturing plants, one for vehicles and one for engines. Cleaner cars were also introduced, with several new models meeting the new "Bharat Stage III" standards.  In February 2012, Maruti Suzuki sold its ten millionth vehicles in India.

(1.3) BRIEF OVERVIEW OF MARKETS AND TRENDS

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The credit for growing the Indian Compact Segment, and in fact, the Indian

Passenger car industry goes partly to the Korean manufacturers (HMIL and the

erstwhile Daewoo) and the Indian player Tata Motors.

The HMIL Santro was launched in September1998 and created a sensation on

account of its aggressive pricing at Rs.2, 99,000. The Santro became successful

as HMIL had got the price –value equation just right. While Daewoo’s Maruti

picked up only seven months after its launch, the Santro was selling more than

3000units a month only 2 months after its launch. HMIL had infected, planned

its entry into the Indian market with the 1495cc Accent but later opted in favor

of the smaller car. At the time the Santro was launched, both the options

available in the segment- Fiat Uno and the Zen-had been around in the Indian

Market for quite some time and lacked novelty. Santro was not only cheaper but

also incorporated a Maruti Suzukiti-point fuel injection (MPFI) system that

offered superior fuel economy to Zen’s carburetor system.

The Maruti was launched in November 1998. Its 800cc engine immediately

encouraged comparisons with Maruti 800. The initial launch price of Maruti at

Rs. 3, 55,000 was significantly higher than the Santro’s Rs, 2, 99,000. Given

that the Maruti was smaller than the Zen and the Santro, the initial impact was

not so strong. In May 1999, Daewoo launched stripped-down variants. The

launch of the cheaper versions saw the sales of Maruti reaching almost 2000

units in May 1999 and recording an average monthly sale of 3123units in

FY2000. However, the financial crisis faced by the parent, Daewoo Motor

Corporation affected the performance of the Indian subsidiary (that was

reporting net loss and had significant borrowings). Subsequently, the Indian

subsidiary halted production.

MARUTI SUZUKI now has 4 cars in the Compact Segment: the Swift, the Zen,

the Alto and the Wagon R. In terms of market share, Zen steadily lost share in

FY2000 to its competitors. Despite this, there is no denying that the Zen is one

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of the bigger success stories in the Indian car market. With 3 models, MARUTI

SUZUKI is the market leader in the Compact segment.

The Alto arrived in India when there was little room for man oeuvre in a

crowded compact segment. It was launched in 2 versions, the LX and the VX.

The base version is priced competitively with the deluxe version of the

Maruti800, while the higher-end version competes with the based versions of

the Zen and the Wagon R.

The 1061cc Wagon R is available in four manual transmission variants (LX,

LXi, VX and VXi) and one automatic transmission variant (AX). Since its

introduction in February 2000, Wagon R has been selling in the 1500-3000units

per month range as against 5000-8000units per month range for the Santro. The

presence of the already well-established Maruti and the Santro meant that the

novelty factor did not work too well for Wagon R.

However 2005 has been a revolutionary year for Maruti since its new Launch

Swift has been a huge success in the market and the most demanded car as well.

The other cars in the compact segment to have made an immediate dent in the

market with their launch are the Palio of Fiat India and the improved version

Indica V2 of Tata Motors. Indica was the third largest selling car in FY2002 in

this segment, after Santro and Zen. On the other hand, Palio was launched at the

time when the passenger car industry was witnessing a slump but the model cut

across the barriers and was able to create a market for itself. However, the

success of this model was short-lived and the sales declined thereafter.

Nevertheless, launches of new variants (such as the diesel version) helped sales

recover marginally.

The size of the compact segment has increased as a result of the high growth

rate attained by the models in this segment. The changing price-value equation,

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coupled with the declining interest rates and easy availability of finance, has

prompted consumers to move towards the compact car segment from the mini

segment. The high rate of growth achieved by the compact segment has

attracted the attention of other players also; including GM. GM has entered the

compact segment with the launch of its Opel Corse Sail in May2003.

(1.4) BRIEF STRATEGY AND KEYS TO SUCCESS• Expertise in small car technology. As a subsidiary of Suzuki, they have access to globally respected technology in the small car segment. They have the advantage of Suzuki’s expertise in all aspects of small car technology and design, with respect to their products, manufacturing processes and businesspractices, the development of their supply chain and the training of personnel.

• Extensive product portfolio. Their diverse product range includes cars in segments A, B and C, and utility vehicles... They are the major manufacturer of cars in segment a (priced below Rs.300, 000). The Maruti 800 has been the largest selling car in India for several years, and still continues to have the very

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high sales volumes. They also manufacturer three distinct models, the Zen, the Alto and the Wagon R, in segment B (priced between Rs. 300,000 and Rs.500,000). Their dominance in segment A and extensive product range in segment B enables them to offer the customer a wider choice in the small car segment than any of their competitors. In addition, the absence of any major manufacturers in segment a gives their dealer’s greater flexibility in promoting models in segment B.

• Quality products. In November 2001, MARUTI SUZUKI was one of the first automobile manufacturers in the world to receive the ISO 9001:2000 certification. They benchmark their products against international quality standards. They export their products to approximately 70 countries, which are manufactured using the same assembly line as that for the domestic market.

• Extensive sales and service network MARUTI SUZUKI has the largest network of dealers and service centers amongst car manufacturers in India In addition to the distribution of cars, their dealership network is a critical resource in their efforts to provide customers with a “one-stop shop” for automobiles and automobile related products and services such as automobile finance, automobile insurance, Maruti certified pre-owned cars available for purchase, and leasing and fleet management, in order to promote customer loyalty.

• Brand strength: MARUTI SUZUKI is present in the Indian market for almost 24 years and have built the brand on the basis of the values of trust and reliability in 2000, 2001 and 2002; J.D.Power Asia Pacific, Inc. 19 ranked MARUTI SUZUKI the No. 1 in the India Customer Satisfaction Index, which assesses customer satisfaction with product quality and dealer service. NFO Automotives 2002 Total Customer Satisfaction Survey ranked Maruti products as No. 1 in the “Economy”, “Premium Compact” and “Entry Midsize” segments respectively, for 2002.• Integrated manufacturing facility. Their manufacturing facility consists of fully integrated plants with flexible assembly lines located at Gurgaon. The facilities have advanced engineering capability and each plant is upgraded on an ongoing basis to improve productivity and quality. They are one of the most efficient among the vehicle manufacturing facilities of Suzuki’s subsidiaries outside Japan in terms of productivity measured as the ratio of number of vehicles produced to number of employees.

• Strong vendor base and higher rates of localization: In order to improve quality and generate economies of scale, MARUTI SUZUKI has reduced the number of vendors of components in India from 370 as of March 31, 2000 to about 100 as in 2005. As of the same date, they had strategic equity interests through joint venture agreements in their vendors, who together supply a substantial portion of the purchases of components. A number of their vendors are their dedicated suppliers in that they account for a majority of their turnover. Vendors located within a radius of 100 kilometers from the facilities supply the majority of the components. The production systems of their vendors are generally aligned to their needs for a reliable and timely supply of components

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that meet the required quality standards. This has enabled MARUTI SUZUKI to increase the proportion of locally sourced, lower cost components in their models, a concept refer to as localization.

• Skilled labor and experienced management. The labor force at MARUTI SUZUKI has become increasingly productive in terms of vehicles produced per employee and receives training on an ongoing basis, including training by Suzuki. Due to their presence in the Indian passenger car market for a significantly longer period they have been able to build a highly experienced management team that is familiar with conditions in the Indian passenger car market

(1.5) CRITICAL RISK AND ASSUMPTION

Maruti has always been identified as a traditional carmaker producing value-for-money cars and right now the biggest hurdle Maruti is facing is to shed this image. Maruti wants to change it for a more aggressive image. Maruti Baleno has failed due to one of the major reasons being that customers could not identify Maruti with a car as sophisticated as Maruti Baleno. Maruti is looking forward to bring about a perception change about the company and its cars. Maruti started the exercise with the new-look Zen, and Suzuki's decision to pick India as one of the first markets for this radically different-looking car gave this endeavor a new thrust. Maruti has also changed its logo at the front grill. It has replaced the traditional Maruti logo on grill ‘stylish ‘M’ with S’. The major thrust in the facelift Endeavour is with the launch of 1.3 litre Swift. It’s a style statement from Maruti to Indian market.

  The next threat Maruti faces is the growing competition in compact cars. Companies like Toyota, Ford, Honda and Fiat are planning to come out with small segment cars in near future. Ford is launching Focus and Fiesta, GM is launching Aveo in 2006, Chevrolet is launching Spark in 2006, Hyundai is

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launching its new compact car in 2006, Honda is launching Jazz in 2006, GM is has reduced prices of its Corsa, Fiat is coming up with Panda and new Fiat Polio, Skoda is launching Fabia. All this will pose a major threat to Maruti leadership in compact cars.

New emission norms like Bharat Stage 3 which has come into effect from April 2005 has increased car prices by Rs.20000 and Bharat Stage 4 which is coming into force in 2007 will contribute in increasing car prices further. This could be of concern to Maruti which is low cost provider of passenger cars.

  Rise in petrol prices and growing popularity of other substitute fuels like CNG will be another threat to Maruti. There is also a threat to Suzuki from R&D investment by Toyota and Honda in Hybrid cars. Hybrid cars could run on both petrol and gaseous fuels.

There is a threat to Maruti models ageing. Maruti models like Maruti 800 which is in market for the last twenty years and others like Zen and Esteem which have also entered the decline phase are the other threats. Maruti is planning phasing out Zen in 2007 and there were rumors of phasing out Maruti 800 also. This all makes Suzuki to replace these brands with new launches. As Swift and Wagon R are replacing the Zen market. Maruti will have to keep on making modifications in its present models or it’s Maruti Suzuki India Ltd - Price Analysis Snapshot

This Report features up to a ten-year record of the equity Price history for Maruti Suzuki India Ltd. Tabular results include the High, Low and Closing price for the quarter. There is also a calculation of percentage change in price for both Quarterly and Annual periods. Price values are adjusted for stock splits and dividends.

Maruti Suzuki India Ltd. The Group's principal activity is to manufacture, purchase and sale of Motor Vehicles and Spare parts. The Group is a subsidiary of Suzuki Motor

Corporation. The other activities of the Group comprises of facilitation of Pre-Owned Car Sales, Fleet Management and Car Financing. The Group also provides services like framing of customized car policies, economical leasing of cars, maintenance management, registration and insurance management, emergency assistance and accident management. The product range includes ten basic models with more than 50 variants. The Groups operations are in 1200 towns and cities with 2628 workshops and also exports cars to other countries.

Maruti Suzuki India Ltd - Earning & Dividend Analysis Snapshot

This detailed Report provides an Earnings and Dividends history for Maruti Suzuki India Ltd. Tabular results include up to a ten-year history of "as reported" Earnings per Share and Dividends per Share plus a calculation of the amount of earnings paid out over the year in dividends (i.e. Payout Ratio).

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Earnings and Dividends are presented on both a Quarterly and Annual basis. An annual Percent Change factor is calculated for both Earnings and Dividends.

Maruti Suzuki India Ltd. The Group's principal activity is to manufacture, purchase and sale of Motor Vehicles and Spare parts. The Group is a subsidiary of Suzuki Motor Corporation. The other activities of the Group comprises of facilitation of Pre-Owned Car Sales, Fleet Management and Car Financing. The Group also provides services like framing of customized car policies, economical leasing of cars, maintenance management, registration and insurance management, emergency assistance and accident management. The product range includes ten basic models with more than 50 variants. The Groups operations are in 1200 towns and cities with 2628 workshops and also exports cars to other countries

(2.0) VISION AND MISSION STATEMENT

Criteria for evaluating vision mission and goals

Criteria Vision Mission objectives1. Customers Yes Yes No

2. Specification about Product and services

No Yes Yes

3. Market Yes No Yes

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4. Technology No Yes Yes

5. Concern for survival, growth and profitability

Yes Yes Yes

6. Philosophy No No Yes

7. Self concept Yes Yes Yes

8. Concern for Public image No Yes No

9. Concern for employee. No No No

MISSION

An Organization’s mission is the purpose or reason for the organization’s existence, means, what the company is providing to society. “Maruti seeks to create a more prosperous society through automotive manufacturing”

Mission critical attitude and fiscal prudence has been a way of life within Maruti, good or bad times notwithstanding. And what has fuelled this over the last 18 months is the Japanese major's 3-G philosophy pushed by Nakanishi, which he refers to as 'going back to basics'. "Arm chair management doesn't help," says Nakanishi. Genba (go to actual spot), Genjitsu (see what's happening) and Gembutsu (identify actual problem) have laid down the framework for Maruti in its 3-year rolling plan till 2010-11. Maruti’s fundamental mission is to contribute to people’s lifestyles, society, and the economy through automotive manufacturing. In upholding this mission, we have always focused on the future of the automobile industry when deciding how best to position our company.

VISION

While the global economy is deep in the recession roil and its tremors being felt in India, the country's largest automaker seems unfazed, What is helping Maruti today, is the company's ability to constantly innovate even beyond product ,so the company’s vision is “We have to ensure that any disruption in the environment doesn't jeopardize your market position. If we say this vision in one line then it is “Maruti’s aims to achieve long-term, stable growth in harmony with the environment, the global economy, the local communities it serves, and its Stakeholders”.

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Objectives

Modernization of the Indian Automobile Industry. Developing cars faster and selling them for less. Production of fuel-efficient vehicles to conserve scarce resources. Production of large number of motor vehicles which was necessary for

economic growth. Market Penetration, Market Development Similarly Product Develop-

ment and diversification. Partner relationship management, Value chain, Value delivery network. 

(2.2) WHAT BUSINESS ARE WE IN?

As above said Maruti Suzuki India Limited is not a group so there are no

group companies, but it is owned and controlled by Suzuki Motor

Corporation which owns around 54 percent of total equity shares of the

company.

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Maruti Suzuki India Limited has its subsidiary companies. Like: Maruti True

Value, etc.

Maruti Suzuki says that we all are group including our Authorized Dealers, Raw

Material Providers, Our Employees, Customers, Competitors and everyone who

is connected with us because without these people we cannot function and

improve our products time to time.

(3.0) COMPANY PRODUCT AND SERVICES

(3.1) PRODUCT AND SERVICES DESCRIPTION

The maruti Suzuki Ltd. is producing following products:

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21

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SERVICES

As of 31 March 2014 Maruti Suzuki has 933 dealerships across 666 towns and cities in all states and union territories of India. It has 3,060 service stations (inclusive of dealer

workshops and Maruti Authorized Service Stations) in 1,454 towns and cities throughout India. It have 30 Express Service Stations on 30 National Highways across 1,436 cities in

India.

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

managed on franchise basis, where Maruti Suzuki trains the local staff. Other automobile companies have not been able to match this benchmark set by Maruti Suzuki. The Express

Service stations help many stranded vehicles on the highways by sending across their repair man to the vehicle.

Maruti Insurance

Launched in 2002 Maruti Suzuki provides vehicle insurance to its customers with the help of the National Insurance Company, Bajaj Allianz, New India Assurance and Royal

Sundaram. The service was set up the company with the inception of two subsidiaries Maruti Insurance Distributors Services Pvt. Ltd and Maruti Insurance Brokers Pvt. Limited

This service started as a benefit or value addition to customers and was able to ramp up easily. By December 2005 they were able to sell more than two million insurance policies

since its inception.

Maruti Finance

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

2002. Prior to the start of this service Maruti Suzuki had started two joint ventures Citicorp Maruti and Maruti Countrywide with City Group and GE Countrywide respectively to

assist its client in securing loan.Maruti Suzuki tied up with ABN Amro Bank, HDFC Bank, ICICI Limited, Kotak Mahindra, Standard Chartered Bank, and Sundaram to start this

venture including its strategic partners in car finance. Again the company entered into a strategic partnership with SBI in March 2003 Since March 2003, Maruti has sold over

12,000 vehicles through SBI-Maruti Finance. SBI-Maruti Finance is currently available in 166 cities across India.

Citicorp Maruti Finance Limited is a joint venture between Citicorp Finance India and Maruti Udyog Limited its primary business stated by the company is "hire-purchase

financing of Maruti Suzuki vehicles". City Finance India Limited is a wholly owned

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subsidiary of Citibank Overseas Investment Corporation, Delaware, which in turn is a 100% wholly owned subsidiary of Citibank N.A. City Finance India Limited holds 74% of

the stake and Maruti Suzuki holds the remaining 26%.GE Capital, HDFC and Maruti Suzuki came together in 1995 to form Maruti Countrywide. Maruti claims that its finance

program offers most competitive interest rates to its customers, which are lower by 0.25% to 0.5% from the market rates.

Maruti True Value

Maruti True service offered by Maruti Suzuki to its customers. It is a market place for used Maruti Suzuki Vehicles. One can buy, sell or exchange used Maruti Suzuki vehicles with

the help of this service in India. As of 31 March 2010 there are 342 outlets.

N2N Fleet Management

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

management solution to corporate. Clients who have signed up of this service include Gas Authority of India Ltd, DuPont, Reckitt Benckiser, Doordarshan, Singer India, National

Stock Exchange of India and Tran world. This fleet management service includes end-to-end solutions across the vehicle's life, which includes Leasing, Maintenance, Convenience

services and Remarketing.

Maruti Accessories

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

components and accessories that were compatible. This caused a serious threat and loss of revenue to Maruti Suzuki. Maruti Suzuki started a new initiative under the brand

name Maruti Genuine Accessories to offer accessories like alloy wheels, body cover, carpets, door visors, fog lamps, stereo systems, seat covers and other car care products.

These products are sold through dealer outlets and authorized service stations throughout India.[64]

Maruti Driving School

A Maruti Driving School in Bangalore As part of its corporate social responsibility Maruti Suzuki launched the Maruti Driving School in Delhi. Later the services were extended to other cities of India as well. These schools are modeled on international standards, where learners go through classroom and practical sessions. Many international practices like road behavior and attitudes are also taught in these schools. Before driving actual vehicles participants are trained on Maruti Suzuki

A launch ceremony for the school Jagdish Khattar stated "We are very concerned about mounting deaths on Indian roads. These can be brought down if government, industry and

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the voluntary sector work together in an integrated manner. But we felt that Maruti should first do something in this regard and hence this initiative of Maruti Driving Schools."

(3.2) CUSTOMER BENEFIT

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A combination of a primary product with additional goods and services defines the

total product to the customer.[1] In other words a CBP is a combination of services

and goods that adds value to the primary product acquired by the customer. The pri-

mary product is the “core” offering that attracts customers and satisfy their basic

needs. These goods and services adding value to the primary product is called pe-

ripheral goods and services which is not essential to the primary product, but en-

hance it. Examples of peripheral goods and services in the fast food industry: Toys

(peripheral goods) are offered as part of a kiddies’ meal. Kids play area (peripheral

service) inside the fast food restaurant. The CBP may also contain some variants as

part of the product offering. A variant is an attribute that departs from the CBP

overall theme.[2] Adding unique goods or services like free internet access inside the

fast food restaurant gives the customer the ability to surf the internet while enjoying

a meal. Often a variant will become part of the CBP on a continuous basis, thus it

becomes a permanent peripheral good or service.

(3.3) TECHONOLOGY

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Better thinking. Better processes. Better technologies. More sensitivity. It's what

helps us create better cars and of course, a better way of life.

Big ideas that make a difference to your life. They're what power the Maruti Suzuki philosophy of cars for a ‘Big Future’. It's the cornerstone of all that we do, be it a more aerodynamic shell for a concept car, or a better way to recycle wastewater at our plants. It's what drives the R&D efforts of our team of over 1000 engineers and service quality across all Maruti Suzuki dealers and service centers in India. Today, working shoulder to shoulder with Team Suzuki, our R&D team has added many achievements to its portfolio:

36 new and refreshed Maruti Suzuki models launched in India in the last six years

Created a superior Maruti Suzuki Swift, already one of India's most loved cars. The new avatar of Maruti Suzuki Swift was mounted on a new platform with new features and offering superior fuel efficiency.

Some of the most fuel efficient petrol cars in India come with the Maruti Suzuki badge. Even better, their efficiency seems to further improve with a face-lift ev-ery few years

Breathtaking concepts like the Concept A-Star, Concept r III and the latest, Concept XA Alpha and many more upcoming Maruti Suzuki models

Launch of factory-fitted CNG variants for five models. These Maruti Suzuki cars use the state-of-the-art i-GPi technology.

Almost all of Maruti Suzuki’s small cars, sedans, and hatchback comply with ELV norms of Europe, which means they are free from any hazardous material, and can be fully recycled.

But all this is already done. We're looking at the road ahead. With a view to en-hance our capabilities, we are setting up a state-of-the-art R&D centre in Ro-htak, Haryana at an investment of Rs. 2000 corer. Spread over an area of 600 acres, this R&D center will be equipped to churn out not just high mileage petrol cars, but test tracks and labs among many other advanced facilities that will be operational by 2015.

Maruti Suzuki uses an innovative Compressed Natural Gas technology – the Intelligent Gas Port Injection (iGPI) on five of its models – the SX4, Eeco, WagonR, Estilo and Alto. The iGPI technology delivers more power and runs like a petrol-filled engine while achieving fuel-efficiency. The iGPI technology uses injectors for each cylinder and a particular amount of CNG is injection in

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the engine through gas ports. The Engine Control Unit controls the amount of CNG needed for each ride.

Two components used by Maruti in cars such as the Maruti Omni to help increase fuel economy are the crankshaft sensor and knock sensor. They control the ignition timing and fuel injection. The crank shaft is a part of the car’s engine that translates its linear motion into rotation. The sensor is part of the internal combustion engine which monitors the position and rotational speed of the crankshaft. The knock sensor is a part that’s linked to the car’s engine-when the car’s engine is not working it knocks on it and usually you hear the knocking sound.  The knock sensor will send a signal to the Power control Car Module (PCM).

The Maruti Swift has a Direct Diesel Injection System engine. This engine has efficient combustion, higher torque and cleaner emissions. It is an extremely light engine and has a 75 bhp, 190 Nm of torque capacity. It has a five-step Maruti Suzukiti-injection technology that makes the car run more smoothly than other cars. It also has a Double Over Head Camshaft that gives the engine a quick run.  It also has a Chain Drive Timing System. This engine is way better than the Maruti 800 engine which has a Single Over Head Camshaft and only two valves per cylinder while the Swift has sixteen-valve cylinder.

The Maruti Suzuki SX4 has a Variable Valve Timing engine.

According to the company, they will use K-Series engines in all car models. India’s largest car manufacturer Maruti Suzuki decided to implement the K-series petrol engine in all the models for at least five years according to a company report. The K-Series engine is a straight four cylinder engine that comes in Single Overhead Camshaft and Double Overhead Camshaft variants. This engine will be made in the Maruti Manesar plant in Haryana for the A-Star car which is produced in India and sold in Europe. The K-Series engine is Euro 4 and Euro 5 compliant and is the most advanced of engines. The engine has a CO2 emission of 109 gm/km and plans to reduce it further. The engine is extremely fuel efficient

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(4.0) MARKETS AND COMPETITIVE ANALYSIS

COMPETITIVE ANALYSIS

Dealer network across the country wide dealership network allows the company to service customers over a wider geo-graphical 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.

True Value Operations MUL providing its customers an op-portunity 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.

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 models.

Commonality of platforms-Commonality between the plat-forms 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 par-ent -MUL’s strength lies in the strong parentage of SMC, Japan.

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MARKETS ANALYSIS

The Cambridge Strategy Group intends to enter the market for

providing marketing and management consulting services to new

and emerging small businesses. The sections below discuss our

analysis of the environment, the target market, our competitors, and

the company.

The environment is well suited for the Cambridge Strategy Group.

While the market for startups and skyrocketing IPOs appears to be

cooling off, this slowdown provides an opportunity for CSG to

establish a presence in the small business arena before the next

growth period.

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(4.1) OVERALL MARKET AND TARGET MARKET

1. Product - The product aspects of marketing deal with the specifications of the actual goods or services, plus how it relates to the end users needs and wants. The range of a product normally includes supporting elements such as warranties, guarantees, and support.

The term “product” refers to tangible, physical products as well as services. Here are some examples of the product decisions to be made:

Brand Name Functionality Styling Quality

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Safety Packaging Repairs and Support Warranty Accessories and services Models and sizes

2. Price -This refers to the process of setting a price for a product, together with discounts. The price need not be monetary; it can plainly be what is exchanged for the product or services, e.g. time, energy, or attention. Methods of setting prices optimally are in the domain of pricing art.

Some example of pricing decisions to be made include:

Pricing strategy (skim, penetration, etc.) Suggested retail price Volume discounts and wholesale pricing Cash and early payment discounts Seasonal pricing Bundling Price flexibility Price discrimination Allowances and deals Discount structure Distribution and retailer mark-ups

3. Place - (or distribution): refers to how the product gets to the buyer; for instance, point-of-sale assignment or retailing. This third P has furthermore at times been called Place, referring to the channel by which a product or service is sold (e.g. online vs. retail), which geographic region or industry, to which division (young adults, families, business citizens), etc. also referring to how the surroundings in which the product is sold in can influence sales.

Distribution channels

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Market coverage (inclusive, selective, or exclusive distribution)

Specific channel members Inventory management Warehousing Distribution centers Order processing Transportation Reverse logistics Outlet location Sales territories

4. Promotion - This includes advertising, sales promotion, including promotional education, publicity, and individual selling. Branding refers to the assorted strategies of promoting the product, brand, or company.

Promotional strategy (push, pull, etc) Advertising Personal selling & sales force Sales promotions Public relations & publicity Marketing communications budget

All the 4 marketing p's are also known as "the marketing mix" furthermore are frequently used by a marketer to plot a plan, and place the foundations of fresh projects/campaigns, it is a astonishingly useful strategy that has been used ever since the early 1960's, and will be constant for as long as new-found projects/campaigns are being produced

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(4.1.1) MARKETS NEEDS

Kia Motors needs to set up a factory in India to tap growth there and offset slowing sales in Russia and China, the Dong-A Ilbo newspaper quoted the South Korean automaker's chief executive as saying.India is expected to become the world's third largest auto market by next year, according to industry data provider IHS. Kia Motors, an affiliate of Hyundai Motor Co, currently has no production in India, and high import taxes mean Kia's India sales are also negligible. 

By contrast, Hyundai has two factories in India and is the country's second-largest automaker after Maruti Suzuki BSE -1.53 % India Ltd. "While growth in Russia or China is stagnating, India is where Kia will ultimately make a leap forward," Kia CEO Park Han-woo, a former head of Hyundai Motor's Indian unit, told the newspaper.

The report gave no further details and a Kia Motors spokesman said the automaker had "no current plan to build a new factory in India or enter the market".Park also said Kia was developing a rival to Toyota Motor's Prius hybrid cars, but gave no details. Hyundai Motor has said. 

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(4.1.1) MARKERTS SIZE AND TRENDS

The first step in any market research undertaking is to understand the market size and trends that are affecting the market.

To start, Grow think identifies all markets in which the client competes or plans to compete. Next, we determine the relevant size of these markets. The relevant market size equals a company’s sales if it were to capture 100% of its specific niche of the market. Growthink determines this size using both a top-down (what percent of the market can we reasonably expect to penetrate) and bottom-up (e.g., how many units can we expect to sell at what price) methodology.

As many assumptions are required when sizing a new or emerging market, Grow think relies heavily on case studies of thousands of other companies and clients who have penetrated new markets.In assessing markets, Grow think looks at the current market size and what the market size might be in the short, mid and long-term. Specifically, we answer key questions such as the following:

How has the relevant market size changed over the past one to five years?

What is the projected growth of the relevant market? What factors will affect this growth? General economic factors?

Changing regulatory conditions? Changing consumer needs?

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(4.1.3) HISTORICAL AND PROJECTED MARKET GROWTH

HISTORICAL GROWTH

Achievements/ recognition:

The company takes great pride in sharing that customers have rated Maruti Suzuki first once again in Customer Satisfaction Sur-vey conducted by independent body, J.D.Power Asia Pacific. It is 9th time in a row.

Maruti Suzuki wins 'Golden Peacock Eco–Innovation Award'

Maruti Suzuki Ranks Highest in Automotive Customer Satisfac-tion in India for Ninth Consecutive Year.

Maruti Suzuki becomes the first Indian car company to export half a million cars

Other Accolades

During 2009–10, the company, its products and services received re-puted awards and accolades instituted by independent expert groups, media houses and research agencies.These Include

Rated as No. 1 in J D Power Sales Satisfaction Index

Hatchback of the year – Ritz by Autocar

Car of the year – Ritz by Business Motoring

Manufacturer of the year by CNBC Overdrive

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Ranked third amongst global car companies in the World's Most Reputed Company Survey 2009

National Award for Excellence in Corporate Governance by ICSI

MARKET GROWTH

Maruti Suzuki India Limited (marut̪i 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 markets.Maruti Suzuki manufactures and sells a complete range of cars from the entry level Maruti 800 (discontinued), Alto, to the hatchback Ritz, Celerio, , A-Star, Swift, Wagon R, Zen and sedans DZire, Ciaz, Kizashi and SX4, in the 'C' segment Eeco, Omni, Multi Purpose vehicle Suzuki Ertiga and Sports Utility vehicle Grand Vitara

The company's headquarters are at No 1, Nelson Mandela Road, New Delhi. In February 2012, the company sold its ten millionth vehicles in India.

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(4.2) INDUSTRY ANALYSIS

(4.2.1) SWOT analysis of Maruti Suzuki

Maruti Suzuki is the market leader in India and has amazing brand equity. Maruti is known for the service it provides and is synonymous with Maruti 800 – the longest running small car in India. Here is a SWOT of maruti suzuki, its strengths, weaknesses, opportunities and threats.

Strengths

Maruti Udyog limited (MARUTI SUZUKI) is in a leadership posi-tion in the market with a market share of 48.74

Major strength of MARUTI SUZUKI is having largest network of dealers and after sales service centers in the country.

Good promotional strategy is adopted by MARUTI SUZUKI to transfer its thoughts to the people about its products.

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Maruti Suzuki recorded highest number of domestic sales with 9, 66,447 units from 7, 65,533 units in the previous fiscal. It recently attained the 10million domestic sales mark.

Strong Brand Value and Loyal Customer Base are big strengths for MARUTI SUZUKI

There are around 15 vehicles in Maruti Product portfolio. Has good product lines with good fuel efficiency like Maruti Swift, Diesel, Alto etc

Alto still beats the small car segment with highest number of sales

MARUTI SUZUKI is the first automobile company to start second hand vehicle sales through its True-value entity.

MARUTI SUZUKI has good market share and hence it’s after sales service is a major revenue contributor.

Weaknesses

Low interior quality inside the cars when compared to quality play-ers like Hyundai and other new foreign players like Volkswagen, Nissan etc.

Government intervention due to having share in MARUTI SUZUKI.

Younger generations started getting a great affinity towards new for-eign brands

The management and the company’s labor unions are not in good terms. The recent strikes of the employees have slowed down pro-duction and in turn affecting sales.

Maruti hasn’t proved itself in SUV segment like other players.

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Opportunities

MARUTI SUZUKI has launched its LPG version of Wagon R and it was a good move Maruti Suzuki tenuously

MARUTI SUZUKI can start R&D on electric cars for a much bet-ter substitute of the fuel.

Maruti’s cervo 600 has a huge potential in tapping the middle class segment and act as a strong threat to Nano

New DZire from Maruti will capture the market share and expected to create the same magic as Maruti Esteem(currently not available)

Export capacity of the company is giving new hopes in American and UK markets

Economic growth of the country is constantly increasing and the government is working hard to increase the gdp to double digit.

Threats

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MARUTI SUZUKI recently faced a decline in market share from its 50.09% to 48.09 % in the previous year(2011)

Major players like Maruti Suzuki, Hyundai, Tata has lost its market share due to many small players like Volkswagen- polo. Ford has shown a considerable increase in market share due to its Figo.

Tata Motors recent launches like Nano 2012, Indigo e-cs are impos-ing major threats to its respective competitor’s segment

China may give a good competition as they are also planning to en-ter into Indian car segment

Launch of Hyundai’s H800 may result in the decline of Alto sales

(4.2.2) MAJOR INDUSTRY PARTICIPANTS

India's largest automobile manufacturer, Maruti Suzuki India Ltd, has achieved excellence in product innovation, production systems, customer services and satisfaction, and has a hold of over half the Indian auto market. It is also a company which is known for making many changes over the years to face competition and for using HRM strategies extensively. Yet the company does not appear to have

41

been able to develop a mature relationship with its employee unions, and has been repeatedly facing confrontation with employee representatives. This could be an indication of ineptitude on the part of a multinational in understanding employee rights and aspirations in the host country, or a deliberate strategy to control unions despite facing small periodic losses.

Introduction

MARUTI SUZUKI INDIA LTD has been making many changes over the years to face competition. It is also known as a company to use HRM strategies extensively. A climate intervention programmed was introduced through common canteen and common uniform for managerial staff and workers. Other interventions included, change in the nature of supervision to emphasize the supervisor's guidance role, employee development and training, and creating the image of a caring organization through good welfare facilities. The company also had small group activities (SGA) and teams, regular departmental meetings for generating ideas, communication programmers through posters, leaflets, departmental meetings, and non-bargaining management union meetings (Sen 2010:444). Absenteeism was apparently reduced at one point of time to just 5 % in the plant as a result of these interventions (Nair & Rao 1990: 2-6). But are these practices incompatible with good industrial relations?

Various events would seem to indicate that MSIL is unable to handle its human resources and unions in the context of change management. Starting from 2000 right up to 2011, the company has faced labor trouble, strikes, work stoppages and disruptions from time to time. A 13-day strike during July 2011, partial work stoppages and disruptions during September 2000 to January 2001, resumption of confrontation during August 2005, and changes in the union, its name or its character, emergence of another union etc leave many questions unanswered. Or are these strategies part of a pattern of labor relations practiced by multinationals? It would also be interesting to look at the role of the state during these interruptions and whether the state's intentions have backfired.

The Company

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Maruti Udyog Ltd was launched in 1981 as a joint venture between the Government of India and Suzuki Motors of Japan to produce a people's car, in a market which had been dominated by Hindustan Motors' Ambassador and Fiat's small car. From the late 80s the company began a new era as India's largest car manufacturer and soon became the holder of over 80% of the automobile market share. The company was also upheld as a model employer, paying high wages and using several Japanese management techniques for integrating employees into the production process. By 1995 it got ISO 1992 certification and continued to grab a number of domestic and foreign awards each year on productivity, customer satisfaction, exports and business excellence. In 1996 it got the first prize in the national competition in Quality Circles (Sen 2010:446).

But with the entry and growth of new passenger automobiles in India like, Hyundai, Daewoo, Tata Motors, Ford, Fiat, General Motors, Mitsubishi, Honda and Toyota, from mid-1990s, the company's share dwindled to less than 50% by 1999-2000. Its response was to launch a number of new models from time to time. The year 2000-01 was a special year for Maruti which had to absorb substantial depreciation for several new models introduced at once. Side by side Maruti began several initiatives to improve its production and shop floor working through cost cutting, enhanced customer services and efficiency.

(4.2.3) ECONOMIC, COMPETITIVE, OTHER TRENDS

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ECONOMIC TRENDS

Indian economy is expected to grow at a rate of more than 6% this year

The A4 segment is expected to grow annually at the rate of 30% per year for the next 5 years

The upper middle class segment is expected to grow from 3% in 2010 to 12% in 2015

The people who fall under “rich” segment is expected to grow from 1% in 2010 to 4% in 2015

The Indian economy is expected to grow at more than 7% in the coming years after the present slowdown.

COPETITIVE TRENDS

A competitive analysis is a critical part of your company marketing

plan. With this evaluation, you can establish what makes your prod-

uct or service unique--and therefore what attributes you play up in

order to attract your target market.

Evaluate your competitors by placing them in strategic groups ac-

cording to how directly they compete for a share of the customer's

dollar. For each competitor or strategic group, list their product or

service, its profitability, growth pattern, marketing objectives and as-

sumptions, current and past strategies, organizational and cost struc-

ture, strengths and weaknesses, and size (in sales) of the competitor's

business. Answer questions such as:

44

Who are your competitors?

What products or services do they sell?

What is each competitor's market share?

What are their past strategies?

What are their current strategies?

What type of media is used to market their products or services?

How many hours per week do they purchase to advertise through the

media used in this market?

What are each competitor's strengths and weaknesses?

What potential threats do your competitors pose?

What potential opportunities do they make available for you?

A quick and easy way to compare your product or service with simi-

lar ones on the market is to make a competition grid. Down the left

side of a piece of paper, write the names of four or five products or

services that compete with yours. To help you generate this list,

think of what your customers would buy if they didn't buy your

product or service.

Across the top of the paper, list the main features and characteristics

of each product or service. Include such things as target market,

price, size, method of distribution, and extent of customer service for

a product. For a service, list prospective buyers, where the service is

available, price, website, toll-free phone number, and other features

that are relevant. A glance at the competition grid will help you see

where your product fits in the overall market.

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(4.2.4) MAIN COMPETITORS

HYUNDAI MOTOR INDIA LIMITED

Hyundai Motor India Limited (HMIL) is a wholly owned subsidiary of Hyundai Motor Company, South Korea and is the second largest and the fastest growing car manufacturer in India. HMIL presently markets over 25 variants of passenger cars in six segments. The Santro in the B segment, and Getz in the B+ segment.

HYUNDAI SANTRO

We are mainly going to concentrate on the various marketing and positioning strategies of Hyundai Santro as against that of Maruti Zen and Alto and Hyundai Getz as against Maruti Swift.

POSITIONING OF SANTRO

The old positioning of the Santro was that pf a ‘family car’, this positioning strategy was changed in around 2002 and Santro was repositioned as to that of ‘a smart car for young people.’ The target age group for the car had now shifted from 30-35 years to 25-30 years. The repositioning followed the face-lifts the car has been getting from time to time in the form of engine up gradation, new power steering, automatic transmission, etc, to keep the excitement around it alive in the highly competitive small car market. The repositioning also comes ahead of the possible launch of a new design Santro, and the super B-segment car ‘Getz’, sometime in 2003.

The Santro was given a fresh new positioning — from a ‘complete family car’ to a ‘sunshine car’ denoting a fresh new attitude and a ‘changing your life’ positioning. As the average age of a car owner has declined from around 30-35 three years ago to 25-30, primarily because of changing lifestyles, cheap and easily available finance, etc. the company thought that instead of promoting the Santro as a family car, it should be promoted as a car that can change the life of a young person since many of the buyers were young buyers.

HYUNDAI’S PRICING STRATEGY

With the launch of Maruti Swift recently a price war was expected to kick in . Immediately after maruti raised prices on its debutante Hyundai Motor India hit back with a Rs 16,000-19,000 markdown on three new variants of Santro Xing.

The company has introduced the XK and XL variants at a lower tag of Rs 3, 26,999 and Rs .3, 45,999 respectively. The new price variants are likely to give Maruti’s existing B-segment models, Zen and WagonR a run for their

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money. Hyundai has also launched a new non-AC variant of the Santo at Rs 2.79 lakh, a tad higher than what the existing non-Ac Santro costs. The next offensive is due from Maruti. With the Santro’s new price positioning, Zen and particularly WagonR may be due for a correction, or at least a limited-period subvention. If that happens the domino effect will kick in across the B-segment.

Hyundai is positioning its new variants on the tech platform. Strapped with 1.1 liter engine with eRLX Active Intelligence technology, the new variants also come with new color-coordinated interiors, a new front grill and a 4-speed AC blower that makes the air conditioning more efficient.

TATA MOTORS

Established in 1945, Tata Motors is India's largest and only fully integrated automobile company. Tata Motors began manufacturing commercial vehicles in 1954 with a 15-year collaboration agreement with Daimler Benz of Germany.

TATA INDICA – Tata motors flagship brand

The company's passenger car range comprises the hatchback Indica, the Indigo sedan and the Marina, its station wagon variant, in petrol and diesel versions. The Tata Indica, India's first indigenously designed and manufactured car, was launched by Tata Motors in 1999 as part of its ongoing effort towards giving India transport solutions that were designed for Indian conditions. Currently, the company's passenger cars and Maruti Suzukiti-utility vehicles have a 16-per cent market share.

POSITIONING OF INDICA

Tata has positioned Indica as `more car per car'. The new car offers more space, more style, more power and more options. Emphasizing the delivery of world class quality. They have tried to redefine the small car market as it has been understood in India. True to its "More cars per car" positioning, the Indica CNG offers all the core benefits of the Indica combined with the advantage of CNG. One of the most popular advertisements on television currently, is the one where the guy portrayed as the ‘loveable liar’, gets socked every time he lies ; but not when he speaks about the Indica thus implying- “ must be true”. Elaborating on the campaign, the new ad was launched with the intention of giving the Indica V2 brand a touch of youthfulness.

TATA’S PRICING STRATEGY

After the price war was being triggered off by Hyundai being the first company to introduce what came to be known as, pricing based on customer's value perceptions, all others followed suit. Telco’s Indica came in the range of Rs 2.56 Lake to Rs 3.88 Lake with 4 models. The price-points in the car market were replaced by price-bands. The width of a price-band was a function of the

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size of the segment being targeted besides the intensity of competition. The thumb rule being 'the higher the intensity, the wider the price-band.'

CURRENT STRATEGIES FOLLOWED BY MARUTI SUZUKI

I.       PRICING STRATEGY - CATERING TO ALL SEGMENTS

Maruti caters to all segments and has a product offering at all price points. It has a car priced at Rs.1, 87,000.00 which is the lowest offer on road. Maruti gets 70% business from repeat buyers who earlier had owned a Maruti car. Their pricing strategy is to provide an option to every customer looking for up gradation in his car. Their sole motive of having so many product offering is to be in the consideration set of every passenger car customer in India. Here is how every price point is covered.

II. OFFERING ONE STOP SHOP TO CUSTOMERS OR CREATING DIFFERENT REVENUE STREAMS

Maruti has successfully developed different revenue streams without making huge investments in the form of MDS, N2N, Maruti Insurance and Maruti Finance. These help them in making the customer experience hassle free and helps building customer satisfaction.

Maruti Driving School (MDS):

Maruti  has established this with the goal to capture the market where there is inhibition in buying cars due to inability to drive the car. This brings that customer to Maruti showroom and Maruti ends up creating a customer.

C) MAJOR FUTURE STRATEGIES

The launch of Swift and phasing out Zen is a strategic move. Alto was launched

I. PHASING OUT ZEN IN 2007

Keeping in mind that it will take over Maruti 800 market in future. Perhaps being the flagship product phasing out of Maruti 800 faced lots of resistance from dealers all over. Another reason behind not phasing out Maruti 800 was the fear of brand shift of customers to other competitor’s product. Swift was launched in May, 2005 in the price band starting from 4 lacs. Before launch of Swift Maruti management had decided that they will phase out Zen since it had already came up with two modifications. The major reason behind this decision was cannibalization of Wagon R and Swift due to overlapping of price band. It

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is a rational decision to kill a product before it starts facing the decline stage in product cycle. Maruti is offering Rs. 3000.00 more margins to dealer on the sale of Wagon-R as compared to Zen. This is to let dealer push Wagon R instead of Zen.

II. MARUTI PLANS FOR A BIG DIESEL FORAY

Maruti would set up a diesel engine plant at Gurgaon in line with its plan to become at the new car manufacturing company, called Maruti Suzuki Automobiles India Limited, will be a joint venture between Maruti Udyog and Suzuki Motor Corporation holding a 70 per cent and 30 per cent stake respectively.  The Rs1, 524.2 corer plants will have a capacity to roll out 1 Lake Cars per year with a capacity to scale up to 2.5 Lake Units per annum. The new car manufacturing plant will begin commercial production by the end of 2006. Major Player in diesel vehicles in a couple of years. This has been done in the wake of major competition from Tata Indica and meets the growing demand of diesel cars in India. While the annual growth in the diesel segment was 13 per cent in the last three years, it was 19-20 per cent in the first quarter (April-June) of the current fiscal. Maruti has currently an insignificant presence in diesel vehicle. It will manufacture new generation CRDI (common rail direct injection) engines in collaboration with Fiat-GM

Opel and engines will be of 1200 cc. The plant with a capacity to produce one Lake diesel engines would be operational in 2006. At present, Peugeot of France, supplies diesel engines for Maruti's Zen and mid-sized Esteem models. This will further reduce the imported component in Maruti vehicles, making them more competitive in the Indian market.

III. MARUTI PLANS FOR A NEW ENGINE AND TRANSMISSION PLANT

The engine and the transmission plant will be owned by Suzuki Power train In-dia Limited in which Suzuki Motor Corporation would hold 51 per cent stake and Maruti Udyog holding the balance. The ultimate total plant capacity would be three lakh diesel engines. However, the initial production would be 1 lakh diesel engines, 20,000 petrol engines and 1.4 lakh transmission assemblies. In-vestment in this facility will be Rs.1,747.7 crore. The commercial production will start by the end of 2006.

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(5.0) BUSINESS STRATEGY AND MARKETING PLAN

Maruti Suzuki intends to continue to focus on the small car segment, while offering products in most segments of the Indian passenger car market. The business strategies of MARUTI SUZUKI are:

Maintain and enhance the product range.

MARUTI SUZUKI utilizes Suzuki’s expertise in small car technology to produce new variants of the existing models and to upgrade the existing one with contemporary technology and features. They intend to increase the number of variants of existing models in the A and B segments

Increase reach and penetration. MARUTI SUZUKI has one of the extensive sales and service network in terms of geographical spread, and penetration, in terms of sales volumes across India. They continuously assist their dealers in enhancing their performance and profitability by suggesting improvements, such as increasing the number of sales executives employed at dealerships. Currently, wide network of MASSs primarily provides after sales service. They can even use the MASSs that are located in some of the more remote areas of India as sales outlets to increase the reach and penetration in those areas.

Increase availability of automobile finance. MARUTI SUZUKI being the market leader should seek opportunities to expand the size of the Indian passenger car market, especially in the small car segment. They have made available, through the dealers, finance products of eight select finance companies under the brand “Maruti Finance”. This increases the availability and transparency of the financing transactions, which can contribute greatly to the customer satisfaction and confidence. Their agreement with the State Bank of India, or SBI, to provide the finance to their customers has enabled it to leverage the strength of the extensive network of SBI, more than 9,000 branches across India. This all will enable it to promote the demand of its offering among SBI’s vast customer base and expand the size of the passenger car market in

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India.

Secure repeat purchases by offering a “360 degree customer experience”. MARUTI SUZUKI is extensible trying to provide customers with a “one-stop shop” for automobiles and automobile-related products and services. They are trying to make available to the customers a wide range of Maruti-branded services at different stages of ownership. This helps them to secure repeat purchases by the existing customers and increase the revenue. The following products and services offered by MARUTI SUZUKI:

- Automobile insurance;- Automobile finance;- Maruti-certified pre-owned cars available for purchase;- Leasing and fleet management;- Accessories; and- Extended warranties.

Continuous benchmarking of manufacturing capabilities:

MARUTI SUZUKI continuously benchmarks, with that of Suzuki’s premier one, its facility to improve its operating efficiencies. As part of Suzuki’s plans to make Maruti its research and development center for cars in Asia (outside Japan), it is expected that MARUTI SUZUKI will ultimately be having the capability to have full model change capability.

Continue to reduce costs to offer more competitive products. Cost competitiveness has been, and continues to be, central to MARUTI SUZUKI’s strategy, as the leading manufacturer in the small car segment, to expand the size of the market by offering competitively priced, high quality products. The components of this strategy are:

Higher levels of localizationMARUTI SUZUKI has increased the level of localization over time by working closely with the vendors in India to upgrade their capabilities, which has enabled them to reduce costs and has increased the flexibility in pricing. A look at the new models tells that MARUTI SUZUKI, with any new model, tries to have a minimum of 75% localization level and then tries to increase the same to at least 90%.

Vendor participation in cost reductionIn some of the major vendors MARUTI SUZUKI has implemented the “Maruti Production System” which focuses on the eliminating the wasteful activities in

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their manufacturing processes such as improving their productivity, reducing21 the number of their components that are rejected, reducing materials handling, improving their yield from materials, and reducing their inventories. This helps in reducing the costs of production, which also reduces the costs of the components being required by MARUTI SUZUKI.

Cost reduction on warrantiesthe warranty costs of the vendors are the cost of components incurred by them to service warranty claims arising from defects in components supplied by them. MARUTI SUZUKI works in association with the vendors to reduce their warranty cost.

Reduction in initial investment costthrough in-house development and localized sourcing of dies, welding jigs and other equipment, introduction of flexible welding lines that can be used for Maruti Suzuki multiple models, and in-house development of machine shop equipment, MARUTI SUZUKI tries to reduce the initial cost associated with the initial investment.

Reduction in number of vehicle platformsMaruti Suzuki currently uses six basic vehicle platforms for production. They even intend to reduce the number of basic vehicle platforms and increasingly share basic vehicle platforms among Maruti Suzuki multiple models in order to spread development costs and achieve economies of scale..

Lowering the cost of ownership:

MARUTI SUZUKI seeks to reduce the Consumer’s cost of ownership of their cars, which comprises the cost of purchase, fuel consumption, maintenance, including spare parts and repairs, insurance, and resale value. MARUTI SUZUKI is trying to achieve this by:• manufacture high quality, fuel-efficient, cars;• price cars, spare parts and accessories, and extended warranties, competitively;• make automobile finance more easily available to the consumer on competitive terms;• make maintenance services, including spare parts, accessories and repairs, widely available through the extensive sales and service network; 22• offer automobile insurance and other automobile-related services through the sales and service network; and• Create a market for Maruti-certified pre-owned cars through “Maruti True Value” business.

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(5.1) VALUE PROPOSITION: WHY BUY FROM US?

Maruti’s marketing objective is to continually offer the customer new products and services that:

• reduce the customer’s cost of ownership of our cars; and• Anticipate and address the customer’s needs and preferences in all aspects and stages of car ownership, to provide what MARUTI SUZUKI refer to as the “360 degree customer experience.” MARUTI SUZUKI has been aggressively cutting prices of its models since the beginning of the year. It began the year by slashing the price of Esteem's diesel version followed by a by the reduction on the premium segment Bale no. Then the midsized Verse’s price was slashed, Alto's price tag was then pruned putting its base variant at par with the AC version of M800. The rationale behind the price cuts is the focus on offering new upgraded vehicles at a low price.

Warranty and Extended Warranty ProgramMARUTI SUZUKI offer a two-year warranty on all the vehicles at the time of sale. The dealers are required to address any claim made by a customer, in accordance with practices and procedures prescribed by MARUTI SUZUKI, under the provisions of the warranty in force at that time. The dealers subsequently claim the warranty cost from MARUTI SUZUKI.MARUTI SUZUKI analyze warranty claims from dealers and either claim the cost from the vendors, in the case of defective components, or bear the cost ourselves, in the case of manufacturing defects. MARUTI SUZUKI also offers an extended paid-warranty program marketed under the brand, “Forever Yours” for the third and fourth year after purchase. The extended warranty program is intended to maintain the dealer’s contact with the customer and increase the revenue generated from sale of spares, accessories and automobile-related services. An effort is made during the period of the extended warranty to encourage the

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customer to exchange his existing Maruti car for a new Maruti car, or upgrade to a new Maruti car.True Value Solutions Limited (TVSL)TVSL was incorporated on January 14, 2002 as a wholly owned subsidiary of Maruti with an authorized capital of Rs. 5 million. It obtained the certificate to commence business on May 1, 2002 in NCT of Delhi and Haryana. TVSL provides value-added services to owners and users of motor vehicles on matters relating to manpower services with regard to recruitment, training and development. The company also intends to promote the business in the areas of pre-owned cars, lease and fleet management, finance and insurance. These services include compliance with predefined business processes at the dealership, continuous training of dealer staff in order to ensure quality of operation to ultimately achieve the business objectives of TVSL.

(5.2) COMPETITIVE ADVANTAGES

Competitive advantages give a company an edge over its rivals and an ability to generate greater value for the firm and its shareholders. The more sustainable the competitive advantage, the more difficult it is for competitors to neutralize the advantage.

There are two main types of competitive advantages: comparative advantage and differential advantage. Comparative advantage, or cost advantage, is a firm's ability to produce a good or service at a lower cost than its competitors, which gives the firm the ability sell its goods or services at a lower price than its competition or to generate a larger margin on sales. A differential advantage is created when a firm's products or services differ from its competitors and are seen as better than a competitor's products by customers.

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(5.3) MARKETING TARGETS AND STRATEGY

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.

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(5.3.1) PRICING STRATEGY

PRICING

a. Pricing Objective: Maximum market share

Since MARUTI SUZUKI’s vision is to be a leader in Indian automobile sector. Products launched by it are aimed at getting maximum market share in the long term in their respective segment. MARUTI SUZUKI follows a market-penetration pricing strategy to fulfill its objective.

b. Determining Demand:

The demand for cars in this segment will is expected to grow at 30% per year in India. The demand curve for cars is highly elastic since price in an important attribute and plays a major role in consumer decision making for cars and there is also a significant competition for cars in this segment. Pricing it above competitor’s price will affect the sale significantly.

Estimated growth rate of sales in this segment = 30%

Sales in the year 2015 = 98800

Maruti’s aim in next five years is gain a market share of 10%

1 Estimated sale for this car in 2015 = 10% of 98800 = 9880

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Estimated growth rate for this car’s sales over 5 years = 40%

So, Estimated sales of this car in the current year = 1837 units

(9880 = x (1 + .4) ^5 => x = 1837)

c. Estimating Cost:

The number of units to be produced this year = 1837 units

Estimated Variable Cost = 1.75 lac per unit

Estimated Fixed Cost for the current year = 115 core

d. Analyzing Competitors’:

· Points of parity with competitors

➢ Style and Design.

➢ Sedan in the price range of 10-14 lacs

· Point of Difference against competitors

➢ Power.

➢ Mileage

➢ More seating comfort

➢ More luggage space

➢ Better distribution system

➢ After sales support.

Competitors Price

Car Name Lowest Price Top Most Price

Chevrolet Cruz Rs. 11, 56,129 Rs. 14, 14,942

Toyota corolla alt is 1.8 j Rs. 10, 23,750 Rs. 13, 12,080

Honda civic Rs. 12, 47,000 Rs. 13, 41,400

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Skoda Laura Rs. 13, 38,550 Rs. 14, 66,065

Skoda Octavia ambient 1.8 turbo Rs. 10, 44,429 Rs. 13, 21,763

Volkswagen Rs. 13, 19,209 Rs. 14, 45,534

a. Selecting a Pricing Method:

The pricing method used will be mark-up pricing. This pricing method is in accordance with

MARUTI SUZUKI’s objective of maximizing its market share.

Estimated variable cost = 1.75 lac per unit

Estimated fixed cost = 115 crore

Expected unit sales = 2400 (for the current year)

Unit cost = variable cost + fixed cost / unit sales

= 1, 75,000 + 1,15,00,00,000 / 1837

= 1, 75,000 + 6, 26,020

= 801000

Now,

Markup price = (unit cost) / (1-desired return on sales)

Desired return on sales = 20%

Markup price = 801000 / (1 - .2) = 10, 01,275

Is this price justified?

1. Price is justified on the basis of benefits it provides to the consumer. The following are the benefits that enhance consumer perceived value:

1. Kizashi is high on functional and symbolic value because of its designing and Styling, performance, higher power and various comfort and safety features. This provides consumers with product benefits.

2. MARUTI SUZUKI provides excellent buying experience with much state of art showrooms. This provides consumers with service benefits.

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3. MARUTI SUZUKI provides excellent after sales servicing to the customers. This provides consumers with service benefits.

4. MARUTI SUZUKI has an excellent brand image in compact car segment build over last three decades. This adds to consumer perceived value.

1. The pricing of Kizashi is consistent with MARUTI SUZUKI’s objective of increasing its market share. With this objective company can’t price it higher compared to the competitors. Since it will end up losing customers.

2. The price of Kizashi is also at par with the benefits it provides to the customers which is in accordance to MARUTI SUZUKI’s brand image.

3. The price of the product is subject to fluctuation in price of raw materials and foreign Exchange rates. Company has to charge for covering these risks.

4. The pricing of Kizashi is also consistent with MARUTI SUZUKI’s objective of providing quality product at low cost and enhance customer satisfaction.

(5.3.2) Advertising and promotion strategy

PROMOTIONAL STRATEGY:

Every company is it a big or small needs an innovative promotional strategy because promotional campaigns tend to have a huge effect on the reception of the product. Maruti Suzuki India Ltd has a formidable line-up of vehicles in its stable and has been quite aggressive about promoting each of its automobile brands. With an intention to face with cutthroat competition and due to declining market shares, in 2000 Maruti Suzuki cut the prices of few models like Wagon R, Omni and Maruti 800 because Maruti knew very well that the Indian consumer is very sensitive about price & this price cut will definitely beneficial for company. In Jan 2002 to attract the customers, Maruti decided that some of its corporate assets in Delhi including Maruti‘s manufacturing plant and children‘s park should be promoted. With an intention to promote road safety and efficient driving the company held ‘carnivals’ periodically at IDTR.

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In 2003, to attract the customers Maruti Suzuki launched attractive campaign like ―Change Your Life‖. The company also offered vehicle insurance for One rupee only. In this campaign the customers were asked to write down the chassis and engine number of their vehicles on the entry form and had to answer the question. In this contest the winners were chosen by a draw of lots and were entitled to gifts worth Rs.50 million.

In 2004, Maruti introduced the ‘2599’ offer under which by paying an EMI of Rs. 2599 for seven years after a down payment of Rs.40000, a consumer could buy a Maruti 800. In 2004 Maruti introduced the ‘Teacher Plus’ scheme, in a tie up with SBI. In this scheme the bank offered reduced rates of interest for teachers who were interested in buying a new car.

Rural India is a fast emerging as a focus area in the country‘s economy. Maruti knew that there is a great potential in rural markets & in rural markets, the endorsements of opinion makers takes precedence over an informed objective Judgment. Considering this fact, Maruti Suzuki launched a panchayat scheme for such opinion makers which covers the village Sarpanch, doctors and teachers in government instititutions, rural bank officers where in an extra discount is given to make a sell. As a part of customer engaging strategy and to attract the potential customers Maruti organized various melas wherein local flavor is added by organizing traditional social activities like Gramin Mahotsava are conducted round the year. As a part of promotional approach Maruti Suzuki promoted Swift & other brands through sponsoring various live programmes (Dancing shows) like Dance India Dance.

ADVERTISING STRATEGY:

Advertising is one aspect of brand building. Whenever Maruti launched any brand, it supported that brand with an ad campaign. Maruti‘s advertising campaigns included TVCs, Radio and Print ads, Point of Sale, Mobile promotions, online marketing, Outdoor promotions. Maruti‘s advertising strategy focused both on building up its corporate image and promoting its cars. Maruti‘s campaigns emphasized different aspects of its cars, including fuel efficiency, looks, space, etc.

In the late 1990s, Maruti‘s advertising campaigns were handled by Lowe India (later known as Lowe Lint as & Partners, India) and Reinfusion DY&R. While advertising related to Esteem, Zen and Baleno were handled by Lowe India and the ad campaign of Maruti 800, Gypsy, Omni and Wagon-R were handled by Reinfusion. With an intention to promote the all brands effectively, in 2000 Maruti decided to appoint Capital Advertising. In 2003, Maruti Suzuki came up with an innovative advertising that became popular for its simplicity and clear message. In this ad one child plays with his toy car & when the father asked

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him, he replies, ‘Kya karoon papa petrol khatam hi nahi hota’. This ad depicted the fuel efficiency of Maruti Suzuki.

(5.3.3) DISTRIBUTION STRATEGY:

Distribution is an important marketing mix. In earlier days the consumers used to book for a car and wait for more than a year to actually buy it. Also the concept of Show rooms was non-existent. Even worse thing was the state of the after sales service. With an objective to change this scenario & to offer better service to customers, Maruti took initiative. To gain competitive advantage, Maruti Suzuki developed a unique distribution network. Presently the company has a sales network of 802 centers in 555 towns and cities, and provides service support to customers at 2740 workshops in over 1335 towns and cities.

The basic objective behind establishing the vast distribution network was to reach the customers even in remote areas and deliver the products of the company. The company has formed the Dealer territories and the concept of competition amongst these dealers has been brought about. Periodically corporate image campaigns in all dealership are carried out. In 2003, to increase the competition the company implemented a strategy for its dealers to increase their profitability levels. Special awards were sometimes given by company for sales of special categories. Maruti Suzuki had given an opportunity to dealers to make more profits from various avenues like used car finance and insurance

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services. In 2001, Maruti started an initiative known as ‗Non Stop Maruti Express Highway‘. As a part of this initiative Maruti developed 255 customer service outlets along with 21 highway routes by 2001-02. Also with an intention to provide fast service in less time Maruti had offered Express Service Facility. In the year 2008, Maruti had near about 2,500 rural dealer sales executives, among the total 15,000 dealer sales executives.

(5.3.4) SALE’S STRATEGY

Maruti’s marketing objective is to continually offer the customer new products

and services that:

reduce the customer’s cost of ownership of cars; and

Anticipate and address the customer’s needs and preferences in all as-

pects and stages of car ownership, to provide what Maruti Suzuki refer

to as the “360 degree customer experience.”

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Maruti Suzuki has been aggressively cutting prices of its models since the

beginning of the year. It began the year by slashing the price of Esteem's diesel

version followed by a by the reduction on the premium segment Baleno. Then

the midsized Versa's price was slashed, Alto's price tag was then pruned putting

its base variant at par with the AC version of M800.

The rationale behind the price cuts is the focus on offering new upgraded

vehicles at a low price.

Warranty and Extended Warranty Program

Maruti Suzuki offers a two-year warranty on all the vehicles at the time

of sale. The dealers are required to address any claim made by a customer, in

accordance with practices and procedures prescribed by Maruti Suzuki, under

the provisions of the warranty in force at that time. The dealers subsequently

claim the warranty cost from Maruti Suzuki. Maruti Suzuki analyze warranty

claims from dealers and either claim the cost from the vendors, in the case of

defective components, or bear the cost ourselves, in the case of manufacturing

defects.

Maruti Suzuki also offers an extended paid-warranty program marketed

under the brand, “Forever Yours” for the third and fourth year after purchase.

The extended warranty program is intended to maintain the dealer’s contact

with the customer and increase the revenue generated from sale of spares,

accessories and automobile-related services. An effort is made during the period

of the extended warranty to encourage the customer to exchange his existing

Maruti car for a new Maruti car, or upgrade to a new Maruti car.

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(6.0) PRODUCTION PLAN

(6.1) PRODUCTION PROCESS

P ro d u c t io n D i v i s i o n o f M ar u t i S u z u k i I n d ia L i mi t ed

P r od uc t io n d i v i s i on i n m a ru t i S uz u k i I n d i a L t d ha s be e n r e -na m e d a s p ro du c t i on b us in e s s ve r t i c a l (P BV ) a f t e r i nc l u s io n o f p ro j ec t s , p ro du c t i o n En g i n ee r i ng , ve h i c l e In s p ec t i on a n d s up p l i e r Q u a l i t y A s s u ra n ce d i v i s i o ns i n i t .

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M a j o r c om p on en t s o f P B V

P r es s s h op a n d b l a nk in g l i ne

W el d s h op ( 1 , 2 , a nd 3 )

P a i n t s ho p (1 , 2 , a nd 3 )

E ng in e A s s em b l y (1 , 2 , a nd 3 )

M a t e r i a l X ( 1 , 2 , a nd 3 )

P l a n t m a i n t e na n ce

K B Ca s t i n g

K B E ng i ne

K B M a c h i ne s ho p

P r od uc t io n f a c i l i t y a t M an e s a r p l a n t

S Q A (S up p l i e r Q ua l i t y A s s u r a nc e )

P r od uc t io n E ng i ne e r i ng a n d p r od uc t s V eh i c l e In s pe c t io ns (V I )

PRESS SHOP

The press shop can be regarded as the starting point of the car manufacturing process. Centrally located between weld 1, weld 2 and weld 3 supplies components to all the three plants. The press shop has a batch production system whereas the plants have aline production system. The press shop main-tains an inventory of at least two days. The weld shop as per the require-ments picks the finished body parts from the press shop. These may be divided as A, B and C. ‘A’ components are large outer components as for exam-ple roof, door panels etc. These components are manufactured in the press

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shopa t   M a r u t i   d u e   t o   d e s i g n   s e c r e c y   a n d   h u g e   i n v e s t -m e n t   r e q u i r e m e n t s .   ‘ B ’   a n d   ‘ C ’ components are manufactured by joint ventures or bought from vendors.

Process flow of Press Shop activity:-

1 . Cu r r e n t l y P r e s s S h op i s p r od uc i ng s h ee t m e t a l c om po ne n t s f o r 8 ru nn i ng models of Maruti Suzuki and one model of GM India - Tavera2. The Blanking and stamping shop processes 10000 metric ton of steel / month .e. 400 tons a day

MACHINES

Five Transfer Press ( 4000 ton , 3500 ton , 2400 ton -1 2400 ton -2 ,2000 ton in terms of total capacity i.e. draw+trim+pierce+bend+restrike ) &1 Tandem line( 1500 ton draw capacity )

Two Coil processing lines ( ROSL – Shear line & Blanking line ) SP-Mof 60

Capacity of 55,000 strokes / day from 400 tons of steel coils

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Press Machine:

Mass production presses are continuous flow transfer presses. Setof 4 to 5 dies are mounted on single press & complete panel comes out from press after going through stamping, trimming & piercing.

•189 die sets (including 15 die sets of GMI) – 1 die set has avg 4 up -per +lower dies

SMED:

“Single Minute Exchange of Dies” new concept being adopted . This concept helps in changing of die set up within single digit minute (below 9 minutes) this helps using improving machine utilization & operating efficiency.

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Since press machines are very high cost investment & any idle time lost due to die exchange will be a cost to company.

Yield improvement

(Ratio of output panel to input coil in weight) is Best amongst the SMC group Companies. (Presently at 63.2%) Modifications to improve yield are continuously done & till Oct-09 Press Shop has saved Rs. 7.786 millions of material in current year

Yield is improved by

1 . R e d u c i n g t h e b l a n k s i z e

2. Utilization of scrap for making smaller sheet metal parts

Steel Coils

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 Steel coil is raw material used to make body sheet metal parts. These areCRS coils made of mild steel having thickness from 0.65 mm to 0.8 mm &weight from 1 ton to 4 tons.

S t e e l co i l s a r e r e c e iv e d in b u l k q ua n t i t i e s f ro m i nd i ge -no us a s w e l l a s foreign suppliers in the ratio of 60 to 40 & stored at a centralized storage &supplied to blank cutting areas as per plan

Steel coils are fed to Blanking & ROSL lines by overhead EOT cranes. Sheet is first de-coiled, cleaned, oiled & fed to cutting or shearing areas of blanking or ROSL lines.

Blank

Co i l s a r e f e d t o b l a nk i ng l i ne & c on t i n uo us s u pp ly o f s he e t t o c u t t i ng d i e s result in shaping of coils to plan blanks.

Blanks are cut by stamping or shearing process & are stacked one by one to form large mass of blanks

These stacks of blanks are further sent to press machines for forming into shape of body panels

Panel

Blanks are supplied to press lines for pressing. Blanks are converted to body panels by this process. Panels are stored in pallets which are supplied to Weld Shops for making White Bodies.

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WELD SHO

The body panels produced in the press shop and the other small components are joined here to give the “white body” or “shell”. In a typical car body 1400 dif-ferent components are welded together. The weld shops have the following fa-cilities.

Welding jigs

Spot welding guns

Kawasaki welding robots

Hemming machines

Punching machines

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PROCESS OUTLINE:

The shop has different lines for different models, each of, which is further di-vided into three parts:

UNDER BODY:

Here different underbody panels are welded together. These comprise of rear underbody, central underbody, front engine room panel. These underbodies are put on the conveyor and welded together to give the underbody.

MAIN BODY

: As the body moves on, the conveyor roof and side body panels (prepared on the sub lines) are welded to it to give the main body. The chassis number is pun-cheon the cowl top and it is welded to the front engine room panel.

WHITE BODY:

The doors, hood and back door are attached on the main body with the help of bolts and screws to make it a “white body”. The body is checked for dent,

 Burr and spatter and these defects are repaired. After inspection and repairs the body is called WBOK. It is sent to the paint shop thereafter.

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PAINT SHOP

In the paint shop following processes are carried out:

There are five plants/units that provide a uniform painting over the white body coming from the weld shop. In paint shop all the models are painted on the same line. The five units are: -

Pre-treatment (PT):

The body is thoroughly washed to remove the dirt and oil scales. Then the body is treated with ZnPO4 (phosphate) to prevent corroding of the body.

• ED coat:

This is done by electric deposition method, at 240V-DC supply. After applying the ED coat the body is baked in oven.

• Sol-sealer and under coat: 

Here the left in the body (due to welding) are filled with sol-sealer to provide water proofing. Under coat is done on the surface above wheels to prevent dam-age of body in that portion.

• Intermediate coat: 

This is done by spray-painting method using 10 Kawasaki Robots. After apply-ing the coat, the body is dried in the oven. Painting done is basically an interme-diate coating to provide base for the final coat.

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• Top coat: This is done by spray-painting method using 20 Kawasaki Robots. For metallic coating, double coats are applied and aluminum flakes are provided to shine the metallic paints. After inspection and touch up, the PBOK, i.e. the paint body ok is sent to the assembly shop. In paint shop II, only ZEN and ALTO are painted. Paint used is Nerolac. There are 4coatings of paint.1] Phosphate coating2] ED coating3] IC coating4] TOP coating Inside portion of vehicle is painted manually and outside is by Robots.

• PRE TREATMENT:

Before sending vehicle to painting process pretreatment is done to

ED PAINTING:

ED is electro deposition. Vehicle is dipped in the ED solution. In this around 300V is passed to make paint to be attached. ED is 17% of paint rest is water and some additives (EDD, M).

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PROCESS:

The whole solution of ED acts as electrolytic solution. Vehicle before coming to ED dip, it undergoes pre treatment. In that phosphate is done, in which Zn phosphate is made to attach vehicle body which help in electro deposition, in this, vehicle acts as cathode and paint as positive ions. When current is passed paint will be attracted by vehicle till its thickness will be covered. ED is very accurate to apply. This is about whole process. Rinsing is done after to remove excessive color. In rinsing industrial water is used which will not be left go waste. That will be filtered and used again.

ULTRA FILTRATION:

Ultra filtration is the process in which all the rinse pipes and dip tanks will be filtered and cleaned, by this way water is recycled. Here Osmosis process is used to filter water.

IC painting:

IC is intermediate coating in which 3 colors are used. They are white, blue and red. Outside portion of vehicle is painted by robots and inside is done manually. Paint thickness is taken care, after that vehicle is sent to IC oven. Oven temperature is 198+/-5’C. 

TOP COAT Painting:

Top coating is done after checking in Dry sanding II. There are 2 sub coatings Base coat and Clear coat. Here 11 colors are used; 8 metallic and 3 solid. Only metallic colors are coated with clear coating. Here also outside portion of vehicle is painted by robots and inside is done manually. Next vehicle will move to final inspection and will be sent to assembly.

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DRY SANDING

Following repairs are done:

1. Roof sanding

2. Side repair if any.

Following checking is done:

1. Dosing mark

2. Sanding mark

SOL SEALING LINE:

• Sealer appearance is given the preference.

3 types of guns are used.

1 .Pencil gun

2. Flat gun

3. Blind gun

4. Moti gun

• In this line followings are checked;

1. Powder dust

2. Extra sealer

3. Pin hole in lamp area

4. Sealer appearance

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ASSEMBLY SHOP

In the assembly shop the body is loaded on an overhead conveyor. As the conveyor moves the body, fitments are made at various stations. There are three Assembly Shops named ASSY-1, ASSY-2 and ASSY-3. Plant 2 and Plant 3 have similar setup but in Plant-1 there are separate assembly lines for separate models. The assembly shop has a continuous production system. The assembly line can be subdivided into the followings: -

(a) Trim line

The vehicle proceeds through a series of Trim workstations where team members begin by installing weather stripping, moldings and pads. Then they put in wiring, vents and lights. After an instrument panel, windows, steering column and bumper supports are added; it starts to look less like a shell and more like a car.

(b)Chassis Line

This is where many safety-related items are installed. Things like brake lines, torque, gas tanks and power steering are double-checked. The engine is installed, along with the starter and alternator. Then come suspension and exhaust systems. Then wheel is mounted with the help of wheel nut fastening machine.

(c)Final Line

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From there the vehicle enters Final 1, which covers many interior items such as the Console, seats, carpet, glove box and steering wheel. This is also where bumpers, tires and the battery are added, as well as finishing touches like covers and vents. Then, Coolant, Brake oil, Power steering oil are filled and also the A/C gas are charged.

Features

Different assembly shop layouts are followed to reduce material handling operations &to facilitate material flow between workstations.

(a) Straight-line layout –

Car & Omni line (Assy shop-1): Simplest layout in which material enters at 1 end & leaves at the other end.

(b)U shape layout –

Assy shop 2 & 3: Receiving & shipping ends of line are at same end of plant, due to material handling considerations (same forklift for both needs) or external needs.

(c)S shape layout –

Esteem line (AS-1): Serpentine layout to fit longer assy line in square shop. Separate door Assy line: - Doors are taken out from the vehicle at the first station of the trim line. Doors fitted in the final line make working easier.

OTHER SHOPS/DEPARTMENTS

MACHINE SHOP

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The machine shop is the source of all major components for the engine assembly shop. The un-machined crankshaft and camshaft forgings, transmission case cylinder head and cylinder block castings are brought in the form of raw materials from the vendors. The cylinder heads and transmission case are aluminum castings while crankshaft and camshaft are steel forgings. It has the following lines:(a)Transmission case line(b)Cylinder head line(c)Cylinder block line(d)Crankshaft line(e)Camshaft line

ENGINE ASSEMBLY

There are four types of engines which are assembled in the Engine Plant

1. FC Engine – Engine with cast iron block

a. M-800b

b. Omnic

c. Altod

d. Wagon-Re

e. Zen Estillo

1. Aluminum Engine – Engine with aluminum block

a. Gypsyb

b.SX4c

c. Swift (Petrol)

d. Desire (Petrol

2. KB Engine (New series of engines with aluminum block)a.A-Starb. Ritz

3. Diesel Engine

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a. Swift (Diesel)

b. Desire (Diesel)

(6.2) QUALITY ASSURANCE

They had produce high quality products, some of which Maruti had been ex-porting to various countries including the Netherlands, Italy, Germany, the United Kingdom and Switzerland. Maruti was certified with ISO: 9001:2000 in 2001 and aim to achieve the TS-16949 certification. In addition, they had made the following improvements in terms of producing defect-free products:

• DFC OK: Their Direct Final Check OK, or DFC OK percentage, which signi-fies the percentage of vehicles that pass through the inspection stages as defect-free, improved from approximately 77% in March 2002 to approximately 90% in March2004.

• Reduction in rejection: Their in-process rejection cost per vehicle, computed as the ratio of (1) the cost of components rejected due to defects arising during our production process, to (2) the number of vehicles sold, declined by approxi-mately 65% from fiscal 2002 to fiscal 2004.

• In house warranty: Their in-house warranty costs per vehicle, computed as the ratio of (1) the aggregate cost of components incurred by us to service warranty claims arising from operational defects in our manufacturing lines, to (2) the numbers of vehicles sold in the fiscal year, declined by approximately 85% be-tween fiscal 2002 and fiscal 2004.A new feather was added recently in Maruti’s cap in the field of quality when the Quality Management System of

It’s Press Shop & associated functions got certification for conformance to the requirements of TS16949:2002standard.

Suzuki Quality Management System

Based on a method adopted by Suzuki at its manufacturing facilities, the quality of a vehicle dispatched from their facility is measured through a quality index audit on a daily basis. The quality index is a relative measure of quality based

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on evaluation of vehicles selected at random on a daily basis. In addition, Maruti had recently adopted Suzuki’s global customer audit index, in order to provide a more customer-oriented focus to the entire organization, and channel resources towards customer complaints for rapid response.

Quality Improvement Initiatives

For quality control Maruti had recently introduced:

• Tracking surveys and direct customer contact in order to better understand customer satisfaction levels and customers’ problems.

• Full-time task forces for improvement in initial quality study problems and de-partmental cross-functional teams to work on defined problems with challeng-ing targets.

• Quality gates at various stages in order to raise alarms for correction and im-mediate action on defects

• Fool-proofing, or Pokayoke in Japanese, which comprises checks conducted in order to prevent defects arising from human error during the manufacturing process; A real-time feedback system, cross-linked withoverall targets.

• The “Pica Pica” system, which aligns the sequence of components and vehi-cles in order to prevent incorrect

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(7.0) ORGANIZATION AND MANAGEMENT SUMMARY

Maruti has believed, since the very beginning that it is its employees who could make it into an organization with a difference .Accordingly, as against the traditional hierarchical System of management, which causes unnecessary delays in decision-making, we have built up a flat organization with a family type of atmosphere at our place of work. The company is divided into different divisions according to the various functional areas.A Divisional Manager heads each Division. Divisions are further divided intoDepartments that are headed by Department Managers who report to the respective

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(7.1) ORGANIZATIONAL CHART AND STRUCTURE

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DIVISIONS AND DEPARTMENTS

Corporate Services Division

 

•Legal & Secretarial Department

•Corporate Communication Cell

•Protocol

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•Strategic Initiative Group

•Recruitment & Management Compensation

Human Resource Division

•Employee Relations Department

•Establishment & Time Office

•Factory Administration Department

•Organizational Development Department

Production Division 

•Plant- 1

•Plant- 2

•Plant- 3

•Plant- 6 at Manesar 

Production Engineering

•Production Engineering Division

•Production Service Division

Engineering Directorate

•QAIN Division

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•Service Division

•Service- 1-5

•MSS (D)

•Parts Inspection Division

•Engineering Division

Supply Chain division

•Supply Chain- 1, 2, 3 Divisions

•Shipping & transport Department

•Imports Department

•Consumables Department

Information Technology Division

 •Application Group1 (AG1)

•Application Group2 (AG2)

•Application Group3 (AG3)

•Information Technology Strategies (ITS)

•IT Operation and Services (ITOS)

Marketing & Sales Secretariat

•Marketing Strategy & Development

•Marketing

•Sales

•Exports

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•Web-IT, E-Commerce

Spare Parts Division

•Spare Parts Procurement

•Warehousing & Dispatch

•Spare Parts Sales

•Accessories

Vigilance Division

•Security Wing

•Vigilance Wing

Finance Division

•Budget, Cost & Accounts Department Income AccountingThe total project costs, priority, completion time and personnel’s required wereestimated. Initial plans were drawn up as to how the project would proceed to its finalimplementation, while running the existing system so that company’s informationneeds were not affected.

(7.2) PERSONNEL PLAN

a. Assess the need for the job and ensure there is adequate funding for it

Review the job description to ensure that it meets the present and future requirements

Review the person specification to ensure it meets the requirements of the job description

Design the selection process Draft the advertisement and select the advertising media Short list using the person specification only Interview and test short-listed candidates Validate references, qualifications and security clearances Make appointment

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Managers hold the responsibility for ensuring this framework is followed. HR is available for advice and will assist in general administration of the recruitment

process.

SELECTION

Decision to Appoint

In selecting the successful candidate, the panel must make a decision based on the merit and eligibility of the candidates as judged by:

Content of application Qualifications (if required for the post) Performance at Interview Outcome of any selection tests Right to work in the UK.

The panel must seek to ensure that candidates appointed will actively promote the IPCC’s Core Values.

CHECKS

As part of assessing the merit of each candidate, Managers must satisfy themselves that the information the candidate gives is authentic, consistent and honest. This includes being satisfied about information regarding the candidate’s:

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Application. Work history.

Qualifications [where a qualification is a requirement for the post, sup-porting evidence or certification must be obtained from the candidate and recorded].

Evidence presented at interview.

Human Resources are responsible for processing:

Reference checks. Security Clearances. Ensuring the candidate has the right to work in the India.

Should any of these not meet the required standards, HR must immediately discuss the issue with the Manager.

Training & Development Policies

Maruti Suzuki has a 360 Degree Appraisal system as it consumes less time and is more effective as communication is much faster.

360 Degree Feedback, also known as 'Maruti Suzukiti Rater Feedback', it is employee development feedback that comes from all around the employee. The feedback would come from subordinates, peers, and managers in the organizational hierarchy, as well as self-assessment, and in some cases external sources such as customers and suppliers or other interested stakeholders.

The results from 360-degree feedback are often used by the person receiving the feedback to plan their training and development. The results are also used by some organizations for making promotional or pay decisions, which are sometimes called "360-degree review."

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360 degree feedback enables leaders to:

1. Take advantage of under-utilized personnel strengths to increase productivity.2. Avoid the trap of counting on skills that may be weak in the organization.3. Apply human assets data to the valuation of the organization.4. Make succession planning more accurate.5. Design more efficient coaching and training initiatives.6. Support the organization in marketing the skills of its members.

360 degree appraisal is also a powerful developmental tool because when conducted at regular intervals it helps to keep a track of the changes in others perceptions about the employees.

A 360 degree appraisal is generally found more suitable for the managers as it helps to assess their leadership and managing styles.

This technique is being effectively used across the globe for performance appraisals. Some of the organizations following it are Wipro, Infosys, Reliance Industries, Maruti Udyog and HCL etc.

360 degree offers an unprecedented opportunity to the employees than the traditional top- down approach could ever offer, providing as it does, the feedback from the broad Swathe of people.

Conflict Resolution Mechanism

Our relationship with the Future Group is essential to our business model, and we believe that it will operate to benefit of shareholders of our Company. This relationship may also create conflicts of interest with respect to potential opportunities between our Company and other enti-ties within the Future Group.

See “Risk Factors -- Conflicts of interest may arise and our failure to deal with them appropriately could damage our reputation and adversely affect our business.” on page of this Draft Red Herring Prospectus.

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We have developed a strategy to seek to minimize potential conflicts of interest. Our Consultant will constitute an advisory committee (the “Ad-visory Committee”) consisting of its CEO and CFO and at least two other persons, who will be responsible for screening potential opportuni-ties for conflicts of interest. If any conflict arises with respect to a busi-ness opportunity, the Advisory Committee will consult with the relevant Future Group entity and our Company and may rely on third-party advi-sors to assist it in resolving such conflict.

In respect of opportunities of strategic importance where operational control is intended, a right of first offer will be granted to the Future Group entity operating in the specific industry or sector in which those opportunities have arisen. For a description of the agreements containing these right of first offer and conflict resolution arrangements, see the section titled beginning on page

The Maruti Suzuki has 360 Degree Appraisal System and other departments are made to directly get in touch with employee to know the source and problem deeply and find a suitable solution for it.

For the solution of conflicts of upper level management third parties are selected who are responsible to make the situation under control.

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