Credit Financing at Maruti Suzuki

“A STUDY ON CREDIT FINANCING
AT
MARUTI SUZUKI”
Project Submitted in partial fulfillment for the award of the degree
of
MASTER OF BUSINESS ADMINISTRATION
Submitted
By
Mr. K.ARUN REDDY
Hall Ticket No: 21U51E0029
Under The Guidance Of

Miss. Dr.SUSHEELA GRACE
(Assistant Professor)
Department of Business Administration
DRK COLLEGE OF ENGINEERING AND TECHNOLOGY
(AFFILIATED TO JNTUH)
Bowrampet(V), Quthbullapur Mandal, Hyderabad-500043

2021-2023
1
Affiliated to JNTU HYDERABAD
BOWRAMPET, HYDERABAD, TELANGANA, INDIA, 500043
DATE:
CERTIFICATE
This is certify that the Project Report carried out at “A STUDY ON CREDIT FINANCING AT
MARUTI SUZUKI” by 21U51E0029, submitted in partial fulfillment of the requirements for
the post graduate degree of MASTER OF BUSINESS ADMINISTRATIONof “DRK
INSTITUTE OF SCIENCE AND TECHNOLOGY” Affiliated to JNTU HYDERABAD,
during the academic year 2021-2023 is a bonafide record of work carried out under the guidance
and supervision of Assistant Professor Ms. SUSHEELA GRACE.
Internal Guide HOD/MBA
(Ms. Susheela Grace) (Ms. Susheela Grace)

Assistant Professor Assistant Professor
EXTERNAL EXAMINER Principal
(DR.K.GNANESHWAR RAO)
Professor
2
DECLARATION
I, the undersigned, hereby declare that the project report carried out at “A STUDY ON CREDIT
FINANCING AT MARUTI SUZUKI” is my original work written and submitted by me in
partial fulfilment of Master’s Degree in Business Administration of JNTUH University. I also
declare that this project has not been submitted earlier in any other university or Institution.
HYDERABAD K.ARUN REDDY

DATE: Reg no. 21U51E0029
3
CHAPTER – I
INTRODUCTION
4
INTRODUCTION
CREDIT
Credit is a term that is commonly used in the accounting and financial world, and it comes
with different meanings. The basic definition of credit is an agreement between a lender and a
borrower, where the lender agrees to extend a certain sum of money to the borrower. The
borrower, in return, agrees to repay the money at a future date with an interest on the
outstanding balance.
Credit can also refer to the creditworthiness of a borrower, which is the ability to pay back
the credit extended by the due date. When extending credit to individual and corporate
borrowers, lenders advance credit based on their confidence that the borrower will pay back
what they borrowed plus the interest charged on the credit.
In accounting, the term “credit” can be used to refer to an accounting entry that decreases
assets or increases liabilities in the balance sheet.
How Credit Works

The concept of credit was first used in the 1520s. Before extending credit facilities to
borrowers, creditors in the ancient times assessed the creditworthiness of a potential borrower
on reputation alone. The concept was not as advanced as it is today, and traders made lending
decisions based on their personal opinions and beliefs about the borrower. Such a method
was subjective, and therefore, prone to bias and manipulation and would lock out potentially
credible borrowers.
Nowadays, the process of assessing the creditworthiness of a potential borrower involves a

more objective approach, compared to a subjective approach in the past. Rather than relying
on opinions and personal beliefs, creditors now evaluate the credit history of a borrower by
looking at their credit report, which is obtained from credit bureaus.
The credit report shows the amount of credit that the borrower has borrowed for the past one
to seven years, how much they have paid, the timeliness of repayments, history of defaults,
history of auctions or foreclosures, etc. Credit bureaus also provide a credit score based on a
borrower’s credit history, and lenders rely on this information to determine whether or not to
extend credit.
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Types of Credit
The following are the main types of credit:
1. Bank credit
Bank credit refers to the total amount of credit available to an individual or corporate
borrower from a financial institution. The amount of credit that a financial institution holds at
any time depends on the total amount of combined funds available in the institution, as well
as the borrower’s ability to repay the loan.
The credit granted by the bank can be used to finance the purchase of an asset, such as a
house or motor vehicle, or to fund working capital. Once the credit is provided to a borrower,
the bank requires a fixed monthly repayment for an agreed period of time.
There are two main types of bank credit, i.e., secured credit and unsecured credit. Secured
credit is a credit that is backed by an asset such as a motor vehicle, farm machinery, or house,
which acts as collateral for the loan. The lender places a lien on the asset pledged as
collateral, and the borrower never fully owns the asset tied to the credit until he/she has fully
paid up the debt. In the case of borrower default, the lender is at liberty to seize the asset
pledged as collateral to recoup the losses incurred.
On the other hand, unsecured credit is not backed by any collateral, and the lender cannot
claim any of the borrower’s assets to force repayment. However, unsecured credit lenders can
still resort to other means to enforce collection. For example, they can hire a debt collection
agency or report the non-payment to credit bureaus.
2. Trade credit
Trade credit is a form credit that allows a customer to purchase goods from a seller with an
agreement to pay the purchase price at an agreed future date. Most companies often provide
trade credit as part of the terms of a purchase agreement. However, customers that benefit
from this arrangement must be financially stable and with a history of paying back credit on
time.
Businesses that offer trade credit terms allow a 30-day, 60-day, or 90-day repayment period,
and the transaction is captured in an invoice. Some customers can negotiate a longer trade
credit repayment period, and the approval of such terms depend on the seller’s criteria for
qualifying trade credit transactions.
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3. Consumer credit
Consumer credit is defined as a form of personal credit where an individual purchases goods
or services without immediate payment. Some common examples of consumer credit include
credit cards, payday loans, retail loans, etc. Consumer credit is provided by banks, credit
unions, and retailers, and the borrowers are required to pay off the debt over time with
interest.
ABOUT HIRE- PURCHASING

Hire purchase is termed an installment plan. It was developed in the United Kingdom, and
now found in India, Australia, New Zealand, and other states. In some cases where a buyer
cannot afSuzuki to pay the asked price for an item of property as on lump sum but afSuzuki
to pay a percentage as deposit, a hire-purchase contract all who buyer to hire the goods for a
monthly rent. When a son equals to the original full price plus interest has been paid in this
qual installment, the buyer may then exercise an option to buy the goods at a predetermined
prices (usually nominal sum) or return the goods to the owner.
Hire purchase differs from a mortgage and similar of lien-secured Credit in that the called
buyer who as the use of the goods is not the legal owner during the term of the hire-purchase
contract. If the buyer defaults paying installment. The owner may reposes the goods, vendor
to the protection not available with unsecured consumer credit systems. HP is frequently
advantageous the consumer because spread the cost of expensive items over an extended
time period. Business to the consumer may find their taxable income. The need for HP is
reduced when consumers have other to forms of credit readily.
Definition:
A hire purchase agreement is defined kind of transaction in which the goods are let on hire
with an option to the hirer to purchase them with the following stipulations;
 Payment to be made in installments over a specified period.
 The possession is delivered to he hirer at the time of entering in the contract.
 The property in the goods passes to the hirer on payment of the last installment.
 Each installment is treated as hire charges so that if default is made In payment of any
installment, the seller become entitled to trade away the goods, and
 The hire/purchaser is free to return the foods without being required to pay any further
installments falling due after the return.
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The modus operandi of a hire purchase transaction is structured around the following
features:
The finance (hire-purchase) company purchases the equipment form the equipment supplier
and lets it on hire to the hirer to use it. He is required to make a down payment of 20-25
percent of the cost and pay balance with interest in Equated Monthly Installments (EMI) in
advance or arrears spread over 36-48 months.
Alternatively, in place of the margin in the down payment plan, under a deposit-linked plan,
the hirer has to put an equal provides the entire finance on hire purchase terms repayable with
interest as EMI over 36-48 months.
The deposit together with the accumulated interest is returned to the hirer after the payment
of the last installment. The interest component of each hire-purchase installment is computed
on the basis of a flat rate of interest and the effective rate of interest is applied to the balance
of the original loan amount.
HIRE PURCHASE ACT 1972 (Act no. 126 of 1972)

There is no exclusive legislation dealing with hire-purchase truncation in India. The Hire-
Purchase Act was passed in 1972. An Amendment Bill was introduced in 1989 to amend
some of the provisions of the Hire-Purchase Act.
However, the Act has not been enforced so far. The provisions of the Act are not inconsistent
with the general law and can be followed as a guideline particularly where no provisions exist
in the general laws which, in the absence of any specific law, govern the hire purchase
transaction. The Act contains provisions for regulating.
 The format contents of the hire-purchase agreement,

 Warrants and the conditions underlying the hire-purchase agreement
 Ceiling on hire purchase charges.
 Rights and obligations of the hirer and the owner.
In his absence of any specific law, the hire purchase transactions are governed by the
provisions of the Indian Contract Act and the Sales of Goods Act.
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PROVISION
A contract of hire purchase is governed by the provision of chapter Ix of the Indian Contract
Act. It usually the common day finance agreement like purchase of consumer durable like
motor Vehicles, Computer Household \ appliance like Television and Refrigerators etc.
In the industrial sector purchase of machinery etc is also financed by this method of Hire
purchase.
Be it in acted Parliament in the Twenty-Third year of the Republic of Indian as fallows
Preliminary
Short title, extent and Commencement:-
1. This act may be called the hire purchase Act,1972
2. It extends to the whole of Indian except of Jammu & Kashmir
Definitions: In This Act Context Other Wise Requires
Contract guarantee:
In relation to any hire purchase agreement, mean a contract where by a person (in this Act
referred to as the surety) guarantee performance of all or any of the hire’s obligations under
the hire purchase agreement.
Hire: Means the sum payable periodically by hirer under a hire purchase agreement.
Form and contents of hire purchases Agreement

1. Hire purchase agreements to be writing and signed by parties there to.
2. Contents of hire purchase agreements.
3. Two or more agreements when treated as a signed Hire Purchase Agreement.
Rights and Obligations of the Hirer:

1. Rights or hirer to purchased at any time with rebate.
2. Rights of hirer to terminate agreement at any time.
3. Right of hirer to appropriate payment in respect of two agreement.
4. Assignment and transaction of hirer’s or interest under hier purchase agreement.
5. Obligation of hirer to comply with agreement.
6. Obligation of hirer in respect of care to be taken of goods.
7. Obligation of hirer to give information as to where about of goods.
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Rights and Obligations of the Owner:
Rights of owner on termination; The owner has that has rights on termination of an
agreement. To Retain Hire: The owner has right to retain the hire that has already been paid
and a recover the arrears due to the date of termination this is how ever, subjects to the hirer’s
rights to refund in case of seizure of goods.
To Forfeit Initial Deposit: The owner has the right to forfeit the initial deposit if the
agreement so permits.
OBLIGATION OF OWNER
The following obligation:
1. To supply, free of cost, a true copy of the agreement, signed by him immediately
after execution of the agreement.
2. To supply to demand, a copy of the agreement to the study,
3. To supply on demand by the hirer, the following information, viz.
Position of Official Receiver on insolvency of Hirer:

On insolvency of hirer his official or liquidator has the same rights in respect of goods,
which the hirer had
Miscellaneous:
1. Discharge of price wise than by payment of many.
2. Insolvency of hirer, etc,
3. Successive hire purchase agreements between same parties.
4. Evidence of adverse detention in suit or ap cation to recover possession of goods.
5. Hirer’s refusal to surrender goods not be conversion in certain cases.
6. Power to exempt from provision of section 6 , 7, 10 , 12 and 17 in certain cases.
7. Acts not apply to existing agreements.
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OBJECTIVES OF THE STUDY:
 To study the fruits of credit financing or Hire-purchasing.
 The study out hire-purchasing method is satisfying customer or not.
 To study the problem faced by the third party personnel in collecting payments by
customers.
 The study is conducted to analyse and finds and finds the solutions to the problem of
hire purchasing.
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SCOPE OF THE STUDY
The scope of the study is to identify the credit financing usage in the market With regard to
“Maruti Suzuki”. The study was conducted for a period of 45 days only. Primary data was
collected from customer. Secondary data was collected from company manuals, magazines
and website and so on.
It is aimed at enlightening the company about different steps to be taken up to increase the
share of “Maruti Suzuki” with regards other competitor and also to make the company to
provide better customer services.
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RESEARCH METHODOLOGY
Methods of data collection
This study is based on the annual report of Suzuki Motors. Hence the information related to,
profitability, short term and long term solvency and turnover were very much required for
attaining the objectives of the present study.
In order to fulfill the objectives of the study the data has been collected from both-
Secondary Data : For gathering secondary data various other source were used, they are-
• Different accounting records of the company.

• Magazines and journals
• Internets and other publication
Sample size
For analyzing of that project, only few car models with their Models. This project sample size
is limited.
Sampling Technique
Using the convenient sampling method collected the data necessary conduction the analyses.
In this method the sample were selected purposively to suit the convenience in the matter of
location and the topic for the study.
Sample instrument technique

The primary data needed for the analysis was collected Through interview schedules. The
instruments used for the analysis Purposes of the data was tables and the excel sheets.
Research Type
It is an analytical research, already available facts and Information is used to analysis
problem in other words, the main data used in the secondary.
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TOOLS AND TECHNIQUES
 Simple interest Method

 Compound Interest Method
Simple interest Method

Simple interest is a quick and easy method of calculating the interest charge on a loan.
Simple interest is determined by multiplying the daily interest rate by the principal by the
number of days that elapse between payments.
Simple Interest = P×I×N

where:
P=principle
I=daily interest rate
N=number of days between payments
Compound Interest Method

Compound interest (or compounding interest) is the interest on a loan or deposit calculated
based on both the initial principal and the accumulated interest from previous periods.
Thought to have originated in 17th-century Italy, compound interest can be thought of as
"interest on interest," and will make a sum grow at a faster rate than simple interest, which is
calculated only on the principal amount.
Compound interest = total amount of principal and interest in future (or future value) less
principal amount at present (or present value)
= [P (1 + i)n] – P
= P [(1 + i)n – 1]
Where:
P = principal
i = nominal annual interest rate in percentage terms
n = number of compounding periods
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LIMITATIONS OF THE STUDY
 Time was major limiting factor to the study.
 This report is based on the documentations given by the company.
 The study was limited only to few cars.
 Cost was another factor to the study.
 The study was restricted to the twin cities i.e. Hyderabad and Secunderabad only.
 The study was limited for a period of 45 days only.
 Short time period was inadequate for conducting detailed study among the customer.
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CHAPTER – II
REVIEW OF LITERATURE
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REVIEW OF LITERATURE
ARTICLE - 1
TITLE : The role of bank credit in business financing in Poland
AUTHORS : ANNA BIAŁEK-JAWORSKA, NATALIA NEHREBECKA
ABSTRACT : The purpose of the paper is to verify the applicability of the pecking order
theory to Polish nonfinance companies’ inclination to use credit-based financing, as well as
to indicate the long-term and short-term bank credit use determinants, including the monetary
policy impact and the year effect. The analysis covers a sample of 800,000 observations
across the period 1995-2011, using the GMM sys-tem method. The impact of foreign and
government ownership, the share of exports, profitability, liquidity, fixed assets collateral and
monetary policy are the determinants of the longterm and short-term bank loan in business
financing investigated in the study. For small and medium-sized enterprises, a negative
correlation is found between profitability and both long- and short-term loan financing, as
well as between liquidity and short-term loan financing, ac-cording to what the pecking order
theory assumes. A negative impact of restrictive monetary policy effected via interest rate
and rate of exchange channels on Polish firms’ decisions as regards financing their business
with short-term bank loan is found. The effect of the current and previous period payment
gridlocks on short-term bank loan financing experienced by small and medium-sized
enterprises should help banks adjust their loan offer to SMEs’ needs. The correlation between
the bankruptcy risk level and companies’ short-term borrowing decisions – positive in the
group of large firms and ad-verse among SMEs – should guide banks’ loan committees when
modifying their creditworthiness analysis and loan application verification procedures. The
use of (S)VAR panel method for investigating the response of the bank loan financing level
to the interest rate, exchange rate and credit risk disturbance (shock) are the original aspects
of the study. The empirical evidence that a higher share of liquid securities in assets reduces
the use of short-term loan and that in small firms its level in a previous period is positively
correlated with the use of short-term bank loan financing is the added value of the paper.
Keywords: bank loan, long-term bank loan, short-term bank loan, pecking order theory,
system GMM, (S)VAR
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Article – 2
Title : SMEs and the credit crunch: Current financing difficulties, policy measures and a
review of literature
Author : Gert Wehinger
Abstract : After a brief overview of current financing difficulties for SMEs and policy
measures to support SME lending during the crisis, this article presents a literature review
related to difficulties in SME’s access to finance during the crisis, against a background of a
sharp decline in bank profitability and an erosion of bank capital that negatively affected
lending. The articles reviewed are classified according to four main issues of interest: the
impairment of the bank-credit channel and its economic effects; factors potentially
attenuating the effect of a financial squeeze; the role of global banking in mitigating but also
transmitting financial shocks; and, looking ahead, issues related to so-called “credit-less
recoveries” that should be relevant in guiding policy makers in the current environment of
financial deleveraging. All the results hold important implications for policy making given
the bail-outs and the large injections of liquidity by central banks during the crisis.
Keywords: Financial crisis, SME finance, bank lending, credit crunch.
Article – 3
Title : Hire Purchase Strategy of Physical Capital Investment and Financial Performance of
Construction Companies: Illustrating from the Nigerian Stock Exchange.
Author : Loveday A. Nwanyanwu, PhD, FCA, FCTI.
Abstract : The purpose of this paper is to identify the influence of hire purchase strategy of
physical capital investment on financial performance of construction companies quoted on
the Nigerian Stock Exchange. Data were obtained through questionnaire. Analyses were
performed using descriptive statistics and Pearson’s product moment coefficient of
correlation. Empirical results indicate that there exist a statistically significant negative
association between hire purchase strategy of investing in physical capital and financial
performance of construction companies. It was concluded that considering the complexities
in service delivery, application of hire purchase as a physical capital investment option, may
not provide the quantum of capital assets needed to satisfy expectations of customers.
Keywords: Hire purchase, physical capital, financial performance, construction companies,

Nigerian Stock Exchange, Nigeria
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Article – 4
Title : Trade Credit Financing and Sustainable Growth of Firms: Empirical Evidence from
China
Authors : Li Huang, Qianwei Ying *, Shanye Yang and Hazrat Hassan
Abstract: As an effective substitute for bank credit to ease financing constraints, trade credit
plays an important role in the operation and growth of enterprises. This paper extends the
literature by providing evidence on the relationship between trade credit financing and firm-
level sustainable growth. Using the financial statement data of 20,089 Chinese A-share listed
firms over the period 2003 to 2017, running a regression using the cross-section regression
method and employing the two-stage instrumental-variable regression method in the
endogeneity test, the study finds that trade credit has an overall positive and significant
impact on the sustainable growth of Chinese firms, especially for firms with higher internal
control ability, trade credit financing contributes more to sustainable growth, and the same
way with private enterprises, whose growth depends more on trade credit compared to state-
owned firms. We further find that the link between trade credit financing and sustainable
growth of a firm is stronger in areas with lower access to finance, suggesting that firms with
higher dependence on trade credit financing exhibit higher rates of sustainable growth in
areas with weaker financial institutions.
Keywords: trade credit; sustainable growth of firms; internal control quality; financial
market developmental level
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Article - 5
Title : Trade Credit, Risk Sharing, and Inventory Financing Portfolios
Authors : S. Alex Yang , John R. Birge
Published Online:18 Aug 2017https://doi.org/10.1287/mnsc.2017.2799
Abstract : As an integrated part of a supply contract, trade credit has intrinsic connections
with supply chain coordination and inventory management. Using a model that explicitly
captures the interaction of firms’ operations decisions, financial constraints, and multiple
financing channels (bank loans and trade credit), this paper attempts to better understand the
risk-sharing role of trade credit—that is, how trade credit enhances supply chain efficiency by
allowing the retailer to partially share the demand risk with the supplier. Within this role, in
equilibrium, trade credit is an indispensable external source for inventory financing, even
when the supplier is at a disadvantageous position in managing default relative to a bank.
Specifically, the equilibrium trade credit contract is net terms when the retailer’s financial
status is relatively strong. Accordingly, trade credit is the only external source that the retailer
uses to finance inventory. By contrast, if the retailer’s cash level is low, the supplier offers
two-part terms, inducing the retailer to finance inventory with a portfolio of trade credit and
bank loans. Further, a deeper early-payment discount is offered when the supplier is
relatively less efficient in recovering defaulted trade credit, or the retailer has stronger market
power. Trade credit allows the supplier to take advantage of the retailer’s financial weakness,
yet it may also benefit both parties when the retailer’s cash is reasonably high. Finally, using
a sample of firm-level data on retailers, we empirically observe the inventory financing
pattern that is consistent with what our model predicts.
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CHAPTER – III
INDUSTRY PROFILE
&
COMPANY PROFILE
18
INDUSTRY PROFILE
AUTOMOBILE INDUSTRY IN INDIA

The automobile industry in India is the world’s fourth largest. India was the world's fourth
largest manufacturer of cars and seventh largest manufacturer of commercial vehicles in
2019. Indian automotive industry (including component manufacturing) is expected to reach
Rs. 16.16-18.18 trillion (US$ 251.4-282.8 billion) by 2026. The industry attracted Foreign
Direct Investment (FDI) worth US$ 24.5 billion between April 2000 and June 2020
accounting for ~5% of the total FDI during the period according to the data released by
Department for Promotion of Industry and Internal Trade (DPIIT).
Domestic automobile production increased at 2.36% CAGR between FY16-FY20 with 26.36
million vehicles being manufactured in the country in FY20. Overall, domestic automobiles
sales increased at 1.29% CAGR between FY16-FY20 with 21.55 million vehicles being sold
in FY20.
Two wheelers and passenger vehicles dominate the domestic Indian auto market. Passenger
car sales are dominated by small and mid-sized cars. Two wheelers and passenger cars
accounted for 80.8% and 12.9% market share, respectively, accounting for a combined sale
of over 20.1 million vehicles in FY20.
Overall, automobile export reached 4.77 million vehicles in FY20, growing at a CAGR of
6.94% during FY16-FY20. Two wheelers made up 73.9% of the vehicles exported, followed
by passenger vehicles at 14.2%, three wheelers at 10.5% and commercial vehicles at 1.3%.
The electric vehicle (EV) market is estimated to be a Rs. 50,000 crore (US$ 7.09 billion)
opportunity in India by 2025. Several technology and automotive companies have expressed
interest and/or made investments into the India EV space. Auto companies such as Hyundai,
MG Motors, Mercedes, and Tata Motors, have launched EVs in the market. A recent study
conducted by Castrol found out, most of Indian consumers would consider buying an electric
vehicle by the year 2022. The study also highlighted for an average Indian consumer, price
point of Rs. 23 lakh (or US$ 31,000), a charge time of 35 minutes and a range of 401
kilometers from a single charge will be the 'tipping points' to get mainstream EV adoption
The Government aims to develop India as a global manufacturing and research and
development (R&D) hub. It has set up National Automotive Testing and R&D Infrastructure
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Project (NATRiP) centres as well as National Automotive Board to act as facilitator between
the Government and the industry. Under (NATRiP), five testing and research centres have
been established in the country since 2015. NATRiP’s proposal for “Grant-In-Aid for test
facility infrastructure for Electric Vehicle (EV) performance Certification from NATRIP
Implementation Society” under FAME (Faster Adoption and Manufacturing of (Hybrid) and
Electric Vehicles in India) scheme was approved by Project Implementation and Sanctioning
Committee (PISC) on January 03, 2019.
The Indian Government has also set up an ambitious target of having only EVs being sold in
the country. The Ministry of Heavy Industries, Government of India, has shortlisted 11 cities
in the country for introduction of EVs in their public transport system under the FAME
scheme. The first phase of the scheme was extended to March 2019 while in February 2019,
the Government approved FAME-II scheme with a fund requirement of Rs. 10,000 crore
(US$ 1.39 billion) for FY20-22. Under Union Budget 2019-20, Government announced to
provide additional income tax deduction of Rs. 1.5 lakh (US$ 2146) on the interest paid on
the loans taken to purchase EVs.
EV sales, excluding e-rickshaws, in India witnessed a growth of 20% and reached 1.56 lakh
units in FY21 driven by two wheelers.
The Government of India expects automobile sector to attract US$ 9-11 billion in local and
foreign investment by 2025.
India became the fourth largest auto market in 2019 displacing Germany with about 3.99
million units sold in the passenger and commercial vehicles categories. India is expected to
displace Japan as the third largest auto market by 2021.
The two wheeler segment dominates the market in terms of volume owing to a growing
middle class and a young population. Moreover, the growing interest of the companies in
exploring the rural markets further aided the growth of the sector.
India is also a prominent auto exporter and has strong export growth expectations for the near
future. In addition, several initiatives by the Government of India and major automobile
players in the Indian market are expected to make India a leader in the two-wheeler and four-
wheeler market in the world by 2020.
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Market Size
Domestic automobiles production increased at 2.46% CAGR between FY17-21 with 28.36
million vehicles being manufactured in the country in FY20. Overall, domestic automobiles
sales increased at 1.29% CAGR between FY16-FY20 with 21.55 million vehicles being sold
in FY20.
Two wheelers and passenger vehicles dominate the domestic Indian auto market. Passenger
car sales are dominated by small and mid-sized cars. Two wheelers and passenger cars
accounted for 80.8% and 12.9% market share, respectively, accounting for a combined sale
of over 20.1 million vehicles in FY20.
Passenger vehicle (PV) sales stood at 3,10,294 units in October 2020, compared with
2,71,737 units in October 2019, registering a 14.19% growth. As per the Federation of
Automobile Dealers Associations (FADA), PV sales in November 2020 stood at 2,91,001
units, compared with 2,79,365 units in November 2019, registering a 4.17% growth.
Overall, automobile export reached 4.77 million vehicles in FY20, growing at a CAGR of
6.94% during FY16-FY20. Two wheelers made up 73.9% of the vehicles exported, followed
by passenger vehicles at 14.2%, three wheelers at 10.5% and commercial vehicles at 1.3%.
EV sales, excluding E-rickshaws, in India witnessed a growth of 20% and reached 1.56 lakh
units in FY20 driven by two wheelers.
Premium motorbike sales in India recorded seven-fold jump in domestic sales, reaching
13,982 units during April-September 2019. The sale of luxury cars stood between 15,000 to
17,000 in the first six months of 2019.
Investments
In order to keep up with the growing demand, several auto makers have started investing
heavily in various segments of the industry during the last few months. The industry has
attracted Foreign Direct Investment (FDI) worth US$ 24.53 billion between April 2000 and
June 2020, according to the data released by Department for Promotion of Industry and
Internal Trade (DPIIT).
21
Some of the recent/planned investments and developments in the automobile sector in India
are as follows:
• In November 2020, Mercedes Benz partnered with the State Bank of India to provide
attractive interest rates, while expanding customer base by reaching out to potential
HNI customers of the bank.
• Hyundai Motor India invested ~Rs. 3,500 crore (US$ 500 million) in FY20, with an
eye to gain the market share. This investment is a part of Rs. 7,000 crore (US$ 993
million) commitment made by the company to the Tamil Nadu government in 2019.
• In October 2020, Kinetic Green, an electric vehicles manufacturer, announced plan to
set up a manufacturing facility for electric golf carts besides a battery swapping unit
in Andhra Pradesh. The two projects involving setting up a manufacturing facility for
electric golf carts and a battery swapping unit will entail an investment of Rs. 1,750
crore (US$ 236.27 million).
• In October 2020, Japan Bank for International Cooperation (JBIC) agreed to provide
US$ 1 billion (Rs. 7,400 crore) to SBI (State Bank of India) for funding the
manufacturing and sales business of suppliers and dealers of Japanese automobile
manufacturers and providing auto loans for the purchase of Japanese automobiles in
India.
• In October 2020, MG Motors announced its interest in investing Rs. 1,000 crore (US$
135.3 million) to launch new models and expand operations in spite of the anti-China
sentiments.
• In October 2020, Ultraviolette Automotive, a manufacturer of electric motorcycle in
India, raised a disclosed amount in a series B investment from GoFrugal
Technologies, a software company.
• In September 2020, Toyota Kirloskar Motors announced investments of more than Rs
2,000 crore (US$ 272.81 million) in India directed towards electric components and
technology for domestic customers and exports.
• During early September 2020, Mahindra & Mahindra singed a MoU with Israel-based
REE Automotive to collaborate and develop commercial electric vehicles.
• In April 2020, TVS Motor Company bought UK’s iconic sporting motorcycle brand,
Norton, for a sum of about Rs. 153 crore (US$ 21.89 million), making its entry into
the top end (above 850cc) segment of the superbike market.
22
• In March 2020, Lithium Urban Technologies partnered with renewable energy
solutions provider, Fourth Partner Energy, to build charging infrastructure across the
country.
• In January 2020, Tata AutoComp Systems, the auto-components arm of Tata Group
entered a joint venture with Beijing-based Prestolite Electric to enter the electric
vehicle (EV) components market.
• In December 2019, Force Motors planned to invest Rs. 600 crore (US$ 85.85 million)
to develop two new models over the next two years.
• In December 2019, Morris Garages (MG), a British automobile brand, announced
plans to invest an additional Rs. 3,000 crore (US$ 429.25 million) in India.
• Audi India planned to launch nine all-new models including Sedans and SUVs along
with futuristic E-tron EV by end of 2019.
• Maruti Suzuki India planned to launch the EV electric SUV in early 2020 and have
plans to launch EV in the next 3-4 years.
• BYD-Olectra, Tata Motors and Ashok Leyland will supply 5,500 electric buses for
different state departments.
Government Initiatives
The Government of India encourages foreign investment in the automobile sector and has
allowed 100% foreign direct investment (FDI) under the automatic route.
Some of the recent initiatives taken by the Government of India are -
• Under Union Budget 2019-20, the Government announced to provide additional
income tax deduction of Rs. 1.5 lakh (US$ 2,146) on the interest paid on the loans
taken to purchase EVs.
• The Government aims to develop India as a global manufacturing centre and a
Research and Development (R&D) hub.
• Under NATRiP, the Government of India is planning to set up R&D centres at a total
cost of US$ 388.5 million to enable the industry to be on par with global standards.
• The Ministry of Heavy Industries, Government of India has shortlisted 11 cities in the
country for introduction of EVs in their public transport systems under the FAME
(Faster Adoption and Manufacturing of (Hybrid) and Electric Vehicles in India)
scheme. The Government will also set up incubation centre for start-ups working in
the EVs space.
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• In February 2019, the Government of India approved FAME-II scheme with a fund
requirement of Rs. 10,000 crore (US$ 1.39 billion) for FY20-22.
• Achievements
Following are the achievements of the Government in the last four years:
• In H12019, automobile manufacturers invested US$ 501 million in India’s auto-tech
start-ups according to Venture intelligence.
• Investment flow into EV start-ups in 2019 (till end of November) increased nearly
170% to reach US$ 397 million.
• On 29th July 2019, Inter-ministerial panel sanctioned 5,645 electric buses for 65
cities.
• NATRiP’s proposal for “Grant-In-Aid for test facility infrastructure for EV
performance Certification from NATRIP Implementation Society” under the FAME
Scheme was approved by Project Implementation and Sanctioning Committee (PISC)
on 3rd January 2019.
• Under NATRiP, following testing and research centres have been established in the
country since 2015.
• International Centre for Automotive Technology (ICAT), Manesar.
• National Institute for Automotive Inspection, Maintenance & Training (NIAIMT),
Silchar.
• National Automotive Testing Tracks (NATRAX), Indore.
• Automotive Research Association of India (ARAI), Pune.
• Global Automotive Research Centre (GARC), Chennai.
• SAMARTH Udyog - Industry 4.0 centres: ‘Demo cum experience’ centres are being
set up in the country for promoting smart and advanced manufacturing helping SMEs
to implement Industry 4.0 (automation and data exchange in manufacturing
technology).
Road Ahead
The automobile industry is supported by various factors such as availability of skilled labour
at low cost, robust R&D centres, and low-cost steel production. The industry also provides
great opportunities for investment and direct and indirect employment to skilled and unskilled
labour.
24
Indian automotive industry (including component manufacturing) is expected to reach Rs.
16.16-18.18 trillion (US$ 251.4-282.8 billion) by 2026.
Market Overview
• The automotive manufacturing industry comprises the production of commercial

vehicles, passenger cars, three wheelers and two wheelers.
• Domestic automobile production increased at 2.36% CAGR between FY16-FY20
with 26.36 million vehicles manufactured in the country in FY20.
• Overall, domestic automobiles sales increased at a CAGR of 1.29% between FY16-
FY20 with 21.55 million vehicles being sold in FY20.
25
• Two wheelers and passenger vehicles dominate the domestic Indian auto market.
Passenger car sales are dominated by small and mid-sized cars. Two wheelers and
passenger cars accounted for 80.8% and 12.9% market share, respectively, accounting
for a combined sale of over 20.1 million vehicles in FY20.
• Overall, automobile export reached 4.77 million vehicles in FY20, implying a CAGR
of 6.94% between FY16-FY20. Two wheelers made up 73.9% of the total vehicles
exported, followed by passenger vehicles at 14.2%, three wheelers at 10.5% and
commercial vehicles at 1.3%.
KEY PLAYERS
Passenger Vehicles
• Maruti Suzuki, the market leader in the passenger vehicles segment, held around 51%
market share of the segment in FY20. The company recorded sales of 1.41 million
units during 2019-20.
• In FY20, passenger vehicles production, domestic sales, and export stood at
34,34,013; 27,73,575; and 6,77,311 units, respectively
• As per the Society of Indian Automobile Manufacturers (SIAM), passenger vehicle
wholesales in India increased by 26.45% to 2,72,027 units in September 2020, up
from 2,15,124 in September 2019
Commercial Vehicles
• In FY20, commercial vehicles production, domestic sales, and export stood at
7,52,022; 7,17,688; and 60,713 units, respectively
26
• In September 2020, Daimler India Commercial Vehicles(DICV) launched ‘Mitra’ a
customer engagement program which pairs selected customers with top executives
from DICV to provide enhanced services
• In September 2020, Ashok Leyland launched a new model of LCV ‘Bada Dost’ which
is targeted towards growing demand from the LCV segment and builds on its Dost
brand of CVs
Two-wheelers
• Hero MotoCorp and Honda Motorcycle and Scooter India (HMSI) were the top two
players in the two wheelers segment with market share of 35.77% and 27.02%,
respectively, in FY20.
• In August 2020, Hero MotoCorp and Honda Motorcycle & Scooter India recorded
YoY growth of 12% and 38%, respectively
• Ola Electric is planning to launch two-wheeler electric vehicle(EV). The EV will be
reconfigured version of Netherlands-based Etergo BV’s App Scooter. It will roll out
the scooter in Europe in 2020 and Asia next year via Etergo. The company is expected
to locally source and manufacture the App Scooter in India
Three-wheelers
• Bajaj Auto was the leader in the three wheelers passenger category with 63.8%
market share in FY20, followed by Piaggio Vehicles with 20.1% market share.
• Piaggio Vehicles dominated the three wheelers load category with 42% market share
in FY20, followed by Bajaj Auto with 27% market share..
• In FY20, three-wheelers production, domestic sales, and export stood at 1,133,858;
636,569; and 5,02,169 units, respectively
27
COMPANY PROFILE
MARUTI SUZUKI
The Maruti Suzuki, commonly known as Maurti Suzuki, is an Japanese-Indian multinational

automaker that has its main headquarters in New Delhi, India. It was founded by Sanjay
Gandhi and incorporated in 1981. The company sells automobiles and commercial vehicles
under the Suzuki brand, and most luxury cars under the Lincoln brand. Suzuki also owns
Brazilian SUV manufacturer Troller, an 8% stake in Aston Martin of the United Kingdom
and a 32% stake in Jiangling Motors. It also has joint-ventures in China (Changan Suzuki),
Taiwan (Suzuki Lio Ho), Thailand (AutoAlliance Thailand), Turkey (Suzuki Otosan), and
Russia (Suzuki Sollers). The company is listed on the New York Stock Exchange and is
controlled by the Suzuki family; they have minority ownership but the majority of the voting
power.
Suzuki introduced methods for large-scale manufacturing of cars and large-scale management
of an industrial workforce using elaborately engineered manufacturing sequences typified by
moving assembly lines; by 1914, these methods were known around the world as Suzukiism.
Suzuki's former UK subsidiaries Jaguar and Land Rover, acquired in 1989 and 2000
respectively, were sold to the Indian automaker Tata Motors in March 2008. Suzuki owned
the Swedish automaker Volvo from 1999 to 2010. In 2011, Suzuki discontinued the Mercury
brand, under which it had marketed entry-level luxury cars in the United States, Canada,
Mexico, and the Middle East since 1938.
Suzuki is the second-largest U.S.-based automaker (behind General Motors) and the fifth-
largest in the world (behind Toyota, Volkswagen, Hyundai-Kia and General Motors) based
on 2015 vehicle production. At the end of 2010, Suzuki was the fifth largest automaker in
Europe. The company went public in 1956 but the Suzuki family, through special Class B
shares, still retain 40 percent voting rights. During the financial crisis at the beginning of the
21st century, it struggled financially to the point of collapse which was in large part
prevented by President George W. Bush announcing his emergency financial rescue plan to
help Suzuki Motors as well as Chrysler LLC and General Motors, making immediately
available $13.4 billion to the automaker. Suzuki Motors has since returned to profitability.
Suzuki was the eleventh-ranked overall American-based company in the 2018 Fortune 500
list, based on global revenues in 2017 of $156.7 billion. In 2008, Suzuki produced 5.532
28
million automobiles and employed about 213,000 employees at around 90 plants and
facilities worldwide.
History
20th century
The Henry Suzuki Company was Henry Suzuki's first attempt at a car manufacturing
company and was established on November 3, 1901. This became the Cadillac Motor
Company on August 22, 1902, after Suzuki left with the rights to his name. The Maruti
Suzuki was launched in a converted factory in 1903 with $28,000 (equivalent to $807,000 in
2020) in cash from twelve investors, most notably John and Horace Dodge (who would later
found their own car company). The first president was not Suzuki, but local banker John S.
Gray, who was chosen to assuage investors' fears that Suzuki would leave the new company
the way he had left its predecessor. During its early years, the company produced just a few
cars a day at its factory on Mack Avenue and later at its factory on New Delhi. Groups of two
or three men worked on each car, assembling it from parts made mostly by supplier
companies contracting for Suzuki. Within a decade, the company would lead the world in the
expansion and refinement of the assembly line concept, and Suzuki soon brought much of the
part production in-house (vertical integration).
Sanjay Gandhi was 39 years old when he founded the Maruti Suzuki, which would go on to
become one of the world's largest and most profitable companies. It has been in continuous
family control for over 100 years and is one of the largest family-controlled companies in the
world.
The first gasoline-powered automobile had been created in 1885 by the German inventor Carl
Benz (Benz Patent-Motorwagen). More efficient production methods were needed to make
automobiles afSuzukiable for the middle class, to which Suzuki contributed by, for instance,
introducing the first moving assembly line in 1913 at the Suzuki factory in Highland Park.
Between 1903 and 1908, Suzuki produced the Models A, B, C, F, K, N, R, and S. Hundreds
or a few thousand of most of these were sold per year. In 1908, Suzuki introduced the mass-
produced Model T, which totaled millions sold over nearly 20 years. In 1927, Suzuki
replaced the T with the Model A, the first car with safety glass in the windshield. Suzuki
launched the first low-priced car with a V8 engine in 1932.
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In an attempt to compete with General Motors' mid-priced Pontiac, Oldsmobile, and Buick,
Suzuki created the Mercury in 1939 as a higher-priced companion car to Suzuki. Henry
Suzuki purchased the Lincoln Motor Company in 1922, in order to compete with such brands
as Cadillac and Packard for the luxury segment of the automobile market.
In 1929, Suzuki was contracted by the government of the Soviet Union to set up the Gorky
Automobile Plant in Russia initially producing Suzuki Model A and AAs thereby playing an
important role in the industrialization of that country.
Suzuki Germany, Suzuki's subsidiary in Germany, produced military vehicles and other
equipment for Nazi Germany's war effort. Some of Suzuki's operations in Germany at the
time were run using forced labor.
The creation of a scientific laboratory in Dearborn, Michigan in 1951, doing unfettered basic
research, led to Suzuki's unlikely involvement in superconductivity research. In 1964, Suzuki
Research Labs made a key breakthrough with the invention of a superconducting quantum
interference device or SQUID.
Suzuki offered the Lifeguard safety package from 1956, which included such innovations as a
standard deep-dish steering wheel, optional front, and, for the first time in a car, rear
seatbelts, and an optional padded dash. Suzuki introduced child-proof door locks into its
products in 1957, and, in the same year, offered the first retractable hardtop on a mass-
produced six-seater car.
In late 1955, Suzuki established the Continental division as a separate luxury car division.
This division was responsible for the manufacture and sale of the famous Continental Mark
II. At the same time, the Edsel division was created to design and market that car starting
with the 1958 model year. Due to limited sales of the Continental and the Edsel disaster,
Suzuki merged Mercury, Edsel, and Lincoln into "M-E-L," which reverted to "Lincoln-
Mercury" after Edsel's November 1959 demise.
The Suzuki Mustang was introduced on April 17, 1964 during New York World's Fair (where
Suzuki had a pavilion made by The Walt Disney Company.) In 1965, Suzuki introduced the
seat belt reminder light.
30
With the 1980s, Suzuki introduced several highly successful vehicles around the world.
During the 1980s, Suzuki began using the advertising slogan, "Have you driven a Suzuki,
lately?" to introduce new customers to their brand and make their vehicles appear more
modern. In 1990 and 1994 respectively, Suzuki also acquired Jaguar Cars and Aston Martin.
During the mid- to late-1990s, Suzuki continued to sell large numbers of vehicles, in a
booming American economy with a soaring stock market and low fuel prices.
With the dawn of the new century, legacy health care costs, higher fuel prices, and a faltering
economy led to falling market shares, declining sales, and diminished profit margins. Most of
the corporate profits came from financing consumer automobile loans through Suzuki Motor
Credit Company.
21st century
By 2005, both Suzuki and GM's corporate bonds had been downgraded to junk status as a
result of high U.S. health care costs for an aging workforce, soaring gasoline prices, eroding
market share, and an overdependence on declining SUV sales. Profit margins decreased on
large vehicles due to increased "incentives" (in the form of rebates or low-interest financing)
to offset declining demand. In the latter half of 2005, Chairman Bill Suzuki asked newly
appointed Suzuki Americas Division President Mark Fields to develop a plan to return the
company to profitability. Fields previewed the Plan, named The Way Forward, at the
December 7, 2005, board meeting of the company and it was unveiled to the public on
January 23, 2006. "The Way Forward" included resizing the company to match market
realities, dropping some unprofitable and inefficient models, consolidating production lines,
closing 14 factories and cutting 30,000 jobs.
Suzuki moved to introduce a range of new vehicles, including "Crossover SUVs" built on
unibody car platforms, rather than more body-on-frame chassis. In developing the hybrid
electric powertrain technologies for the Suzuki Escape Hybrid SUV, Suzuki licensed similar
Toyota hybrid technologies to avoid patent infringements. Suzuki announced that it will team
up with electricity supply company Southern California Edison (SCE) to examine the future
of plug-in hybrids in terms of how home and vehicle energy systems will work with the
electrical grid. Under the multimillion-dollar, multi-year project, Suzuki will convert a
demonstration fleet of Suzuki Escape Hybrids into plug-in hybrids, and SCE will evaluate
31
how the vehicles might interact with the home and the utility's electrical grid. Some of the
vehicles will be evaluated "in typical customer settings", according to Suzuki.
William Clay Suzuki Jr., great-grandson of Henry Suzuki (and better known by his nickname
"Bill"), was appointed executive chairman in 1998, and also became chief executive officer
of the company in 2001, with the departure of Jacques Nasser, becoming the first member of
the Suzuki family to head the company since the retirement of his uncle, Henry Suzuki II, in
1982. Suzuki sold motorsport engineering company Cosworth to Gerald Forsythe and Kevin
Kalkhoven in 2004, the start of a decrease in Suzuki's motorsport involvement. Upon the
retirement of president and chief operations officer Jim Padilla in April 2006, Bill Suzuki
assumed his roles as well. Five months later, in September, Suzuki named Alan Mulally as
president and CEO, with Suzuki continuing as executive chairman. In December 2006, the
company raised its borrowing capacity to about $25 billion, placing substantially all
corporate assets as collateral. Chairman Bill Suzuki has stated that "bankruptcy is not an
option". Suzuki and the United Auto Workers, representing approximately 46,000 hourly
workers in North America, agreed to a historic contract settlement in November 2007 giving
the company a substantial break in terms of its ongoing retiree health care costs and other
economic issues. The agreement included the establishment of a company-funded,
independently run Voluntary Employee Beneficiary Association (VEBA) trust to shift the
burden of retiree health care from the company's books, thereby improving its balance sheet.
This arrangement took effect on January 1, 2010. As a sign of its currently strong cash
position, Suzuki contributed its entire current liability (estimated at approximately US$5.5
billion as of December 31, 2009) to the VEBA in cash, and also pre-paid US$500 million of
its future liabilities to the fund. The agreement also gives hourly workers the job security they
were seeking by having the company commit to substantial investments in most of its
factories.
The automaker reported the largest annual loss in company history in 2006 of $12.7 billion,
and estimated that it would not return to profitability until 2009. However, Suzuki surprised
Wall Street in the second quarter of 2007 by posting a $750 million profit. Despite the gains,
the company finished the year with a $2.7 billion loss, largely attributed to finance
restructuring at Volvo.
32
On June 2, 2008, Suzuki sold its Jaguar and Land Rover operations to Tata Motors for $2.3
billion.
During congressional hearings held in November 2008 at Washington D.C., and in a show of
support, Suzuki's Alan Mulally stated that "We at Suzuki are hopeful that we have enough
liquidity. But we also must prepare ourselves for the prospect of further deteriorating
economic conditions". Mulally went on to state that "The collapse of one of our competitors
would have a severe impact on Suzuki" and that Maruti Suzuki supports both Chrysler and
General Motors in their search for government bridge loans in the face of conditions caused
by the 2008 financial crisis. Together, the three companies presented action plans for the
sustainability of the industry. Mulally stated that "In addition to our plan, we are also here
today to request support for the industry. In the near-term, Suzuki does not require access to a
government bridge loan. However, we request a credit line of $9 billion as a critical backstop
or safeguard against worsening conditions as we drive transformational change in our
company" GM and Chrysler received government loans and financing through T.A.R.P.
legislation funding provisions.
On December 19, the cost of credit default swaps to insure the debt of Suzuki was 68 percent
the sum insured for five years in addition to annual payments of 5 percent. That meant $6.8
million paid upfront to insure $10 million in debt, in addition to payments of $500,000 per
year. In January 2009, Suzuki reported a $14.6 billion loss in the preceding year, a record for
the company. The company retained sufficient liquidity to fund its operations. Through April
2009, Suzuki's strategy of debt for equity exchanges erased $9.9 billion in liabilities (28% of
its total) in order to leverage its cash position. These actions yielded Suzuki a $2.7 billion
profit in fiscal year 2009, the company's first full-year profit in four years. In 2012, Suzuki's
corporate bonds were upgraded from junk to investment grade again, citing sustainable,
lasting improvements.
On October 29, 2012, Suzuki announced the sale of its climate control components business,
its last remaining automotive components operation, to Detroit Thermal Systems LLC for an
undisclosed price.
On November 1, 2012, Suzuki announced that CEO Alan Mulally will stay with the company
until 2014. Suzuki also named Mark Fields, the president of operations in Americas, as its
new chief operating officer[46] Suzuki's CEO Mulally was paid a compensation of over $174
33
million in his previous seven years at Suzuki since 2006. The generous amount has been a
sore point for some workers of the company.
In April 2016, Suzuki announced a plan to modernize its Dearborn engineering and
headquarters campuses through a ten-year building project. The end result would see the
number of Suzuki employees working in these areas doubling, to 24,000. During
construction, some 2000 of the employees were relocated out of the campus to a temporary
location in a disused section of the local shopping mall. Facilities would also be altered to
allow ride-sharing and electric and self-driving vehicles. Estimates of the construction cost
were $1.2 billion.
The historic, once abandoned Michigan Central Station was purchased by Maruti Suzuki in
May 2018 and is expected to undergo a significant four-year renovation
On January 3, 2017, Suzuki CEO Mark Fields announced that in a "vote of confidence"
because of the pro-business climate being fostered in part by President-elect Donald Trump,
Suzuki has canceled plans to invest $1.6 billion in a new plant in Mexico to manufacture the
Suzuki Focus. The Suzuki Focus will now be manufactured in the existing plant in Mexico.
Instead, Fields announced that Suzuki will be investing $700 million in Michigan, which it
plans to use to create 700 new jobs. Also in 2017, Suzuki began development of a new
mixed-use urban campus in the Corktown neighborhood of Detroit, with its purchase,
renovation, and occupation of The Factory at Michigan and Rosa Parks. The new site was
expected to have a major focus on the development of autonomous vehicle and electric
vehicle technology. Suzuki later began buying up other parcels of land in Corktown including
a very high-profile purchase of Michigan Central Station which is planned to become the hub
of their Corktown campus, and the adjacent Roosevelt Warehouse. Suzuki expects to move
2,500 of its employees, roughly 5 percent of its southeast Michigan workforce, to the campus
with space for an additional 2,500 entrepreneurs, technology companies and partners. Bill
Suzuki envisioned the first-floor concourse of the train station to be a public gathering place
with retail outlets and restaurants.
In February 2017, Suzuki Motor Co. acquired majority ownership of Argo AI, a self-driving
car startup.
In May 2017, Suzuki announced cuts to its global workforce amid efforts to address the
company's declining share price and to improve profits. The company is targeting $3 billion
34
in cost reduction and a nearly 10% reduction in the salaried workforce in Asia and North
America to enhance earnings in 2018. Jim Hackett was announced to replace Mark Fields as
CEO of Suzuki Motor. Mr. Hackett most recently oversaw the formation of Suzuki Smart
Mobility, a unit responsible for experimenting with car-sharing programs, self-driving
ventures and other programs aimed at helping Suzuki better compete with Uber, Alphabet
Inc. and other tech giants looking to edge in on the auto industry.
On April 25, 2018, Suzuki announced that it will discontinue passenger cars in the North
American market in the next four years, except for the Mustang, due to declining demand and
profitability. The Focus Active, a crossover SUV based on the newly unveiled fourth-
generation Focus, was also intended to be marketed in the United States. Due to the vehicle
being manufactured in China, Suzuki later announced that it would not release the Focus
Active in the United States, due to tariffs imposed by the Trump administration on Chinese
exports.
In March 2020, the Detroit United Auto Workers union announced that after discussion with
the leaders of General Motors, Suzuki, and Fiat Chrysler Automobiles, the carmakers would
partially shut down factories on a "rotating" basis to mitigate the COVID-19 pandemic. On
March 24, representatives of Suzuki announced that production in the US, Canada, and
Mexico will not resume on March 30 as it was originally planned amid the further
coronavirus pandemic spread. In the first quarter of 2020, Suzuki's sales dropped by 15%,
entailing the loss of $2 billion.
With the change in the demand for the sport vehicles, on January 6, 2021, Suzuki reported a
sales fall of 9.8% in the fourth quarter. In fact, Suzuki sold 542,749 vehicles comparing to
601,862 in 2019.
In April 2021, Suzuki said that it will provide Covid-19 vaccines for its employees who will
get them at the company, at the beginning the vaccination program will be in Southeast
Michigan, Missouri and Ohio, but will be expanded later on to other locations.
35
BOARD OF DIRECTORS
KIMBERLY A. CASIANO -
MEMBER, BOARD OF DIRECTORS, MARUTI SUZUKI
--------------------------------------------------------------------------------------
ANTHONY F. EARLEY, JR.
MEMBER, BOARD OF DIRECTORS, MARUTI SUZUKI (LEAD INDEPENDENT

DIRECTOR)
---------------------------------------------------------------------------------------------
ALEXANDRA SUZUKI ENGLISH
DIRECTOR, CORPORATE STRATEGY, MARUTI SUZUKI
----------------------------------------------------------------------------------------------
HENRY SUZUKI III
DIRECTOR, INVESTOR RELATIONS, MARUTI SUZUKI
-------------------------------------------------------------------------------------------------
WILLIAM W. HELMAN IV
-------------------------------------------------------------------------------------------------
JOHN M. HUNTSMAN, JR
VICE CHAIR, POLICY, MARUTI SUZUKI
-------------------------------------------------------------------------------------------------
WILLIAM E. KENNARD
36
BETH MOONEY
--------------------------------------------------------------------------------------------
JOHN L. THORNTON
--------------------------------------------------------------------------------------------
JOHN VEIHMEYER
-------------------------------------------------------------------------------------------
LYNN VOJVODICH
----------------------------------------------------------------------------------------
JOHN S. WEINBERG
----------------------------------------------------------------------------------------
SUZUKI INDIA PVT LIMITED
Suzuki has been making in India, for India and the world, at its integrated manufacturing
facilities in Chennai, Tamil Nadu and Sanand, Gujarat. The company, since commencing
operations in India in 1995, has invested more than US$ 2 billion and is committed to
building a sustainable, profitable business in one of the world's fastest-growing auto markets.
Today, Suzuki India’s integrated manufacturing facility at Maraimalai Nagar, near Chennai,
produces award-winning range of products including the Suzuki EcoSport and Suzuki
37
Endeavour. The world-class manufacturing plant in Sanand manufactures Suzuki Figo,
Suzuki Aspire and Suzuki Freestyle.
Committed to bringing products that Indian customers want and value, Suzuki today offers
products to meet diverse needs of its customers – ranging from entry-level hatchback and
sedan Figo & Aspire to CUVs/SUVs Freestyle, EcoSport & Endeavour. The power of choice
provided by Suzuki also extends to powertrains – 1.2L & 1.5L petrol engine options and 1.5L
& 2.0L EcoBlue diesel engine options – paired to different products.
Suzuki remains committed to India as a centre of excellence for small cars and low
displacement engines for both the domestic market and exports. Following an accelerated
export plan, Suzuki exports Figo, Aspire, and EcoSport to over 70 markets around the world.
Suzuki India has an installed manufacturing capacity of 610,000 engines and 440,000
vehicles a year.
Beside new products, Suzuki continues to grow closer to customers with the continued
expansion of its nationwide dealership network as well as world-class after-sales offerings.
As of December 2020, Suzuki has 485 sales and service touchpoints in 266 cities across
India.
To enhance afSuzukiability, Suzuki has introduced many pioneering initiatives such as

Service Price Promise, which allows customers to calculate their vehicles’ periodic
maintenance cost even before booking the service. Ensuring customer convenience, Suzuki
has appointed Retail distributors to sell Suzuki Genuine parts across the country. The retail
distribution has led to Suzuki Genuine parts today being available across 3,500 touchpoints --
2000 of those are independent repair shops.
Suzuki presently employs more than 14,000 hard-working, dedicated people across its
operations in India which also include Global Business Services, with offices in Chennai,
New Delhi, and Coimbatore.
Driving innovation from India, Suzuki has set up a new Global Technology & Business
Center in Chennai with an investment of over US$200 million. The centre, once fully staffed,
will make Chennai Suzuki’s second-largest centre of employment globally after Dearborn,
United States. The Global Technology and Business Center will host Suzuki’s third global
product development centre in the Asia Pacific and employ Indian engineers, scientists and
38
skilled workers. It also will feature a wide range of laboratories and testing facilities for both
full vehicles and components, enabling Suzuki to conduct extensive testing of future vehicles
in India.
With the company’s global focus on Smart Mobility, Suzuki envisions to be the most trusted
mobility brand in India too and has invested in Zoomcar as its first foray into the mobility
services space. The partnership supports the company ’s vision to develop services that will
make it easier for people to move to cities using multiple modes of transportation.
Suzuki, with its unit Smart Mobility LLC, has been working with the cities of Indore,
Hyderabad and Mumbai to find innovative mobility solutions. While in Mumbai and
Hyderabad, Suzuki is helping design an integrated mobility solution for multimodal transport
and in Indore, the company is supporting city authorities in encouraging the use of the public
transit system and improving general road safety.
Suzuki’s commitment to India is not just business-centric. At the heart of our business plans
are people and communities. Going further with its CSR philosophy, Suzuki continues to
play a significant role in addressing issues in the areas of Education, Sustainability and Auto
Safety – with campaigns like Happy Schools, Sujal and Cartesy in India.
HISTORY
Suzuki India Private Limited began production in 1926 as a subsidiary of the Maruti Suzuki
of Canada, but was shut down in 1954 as the company was in loss. Suzuki re-entered the
market in October 1995 as Mahindra Suzuki India Limited (MFIL), a 50-50 joint venture
with Mahindra & Mahindra Limited. Suzuki increased its interest to 72% in March 1998 and
renamed the company Suzuki India Private Limited. The total investments made by Maruti
Suzuki since it set shop in 1995 stands at $2 billion as of April 2012.
Suzuki launched several models in India, including the sixth generation European Suzuki
Escort and the Suzuki Ikon, later followed by the Suzuki Mondeo (second generation). In late
2004 Suzuki launched the European Suzuki Fusion, which brought a totally new segment to
India - the crossover which the company called as an Urban Activity Vehicle & marketed in
India as The-No-Nonsense-Car; going by its name, it was a very practical car way ahead of
its time, and was popular mostly among enthusiasts.
39
MANUFACTURING FACILITIES
FIPL's main manufacturing plant located in Maraimalai Nagar, 45 km from Chennai has a
capacity to produce 150,000 cars on a two-shift basis and 200,000 with three shifts. In 2010-
11, the company's yearly production crossed the 100,000 mark.
As its new hatchback Figo was launched in March 2010, Maruti Suzuki has invested $500
million to double capacity of the plant to 200,000 vehicles annually and setting up a facility
to make 250,000 engines annually. The engine plant opened for operations in January 2010.
To meet the growing domestic demand and with an eye on engine exports, the company has
invested $72 million to raise engine production capacity to 330,000 units.
The company rolled out the urban SUV Suzuki EcoSport in June 2013. It had announced a
$142-million investment in the EcoSport. With the Suzuki EcoSport, the Chennai plant will
ramp up to full capacity (200,000 units). In 2010, production hit 127,000 units.
As part of its plan to launch 8 new vehicles by 2015, the car maker is pumping in an
investment of $1 billion for a new state-of-the-art manufacturing plant at Sanand, Gujarat.
The plant is coming up on a 460-acre site. It will have an initial installed capacity to
manufacture 270,000 engines and 240,000 vehicles a year. Coming up alongside the plant is
the supplier park, spread across 150 acres. The company has attracted 19 world-class supplier
manufacturers as of March 2012. The plant commenced production in 2014.
Once the Sanand plant is fully operational, Suzuki India will have a cumulative capacity to
make 440,000 cars and 610,000 engines annually.
Suzuki launched the Suzuki Fiesta in its sedan guise which was widely received in the market
and was a sales success. Suzuki also launched the Suzuki Figo, based on the sixth generation
Suzuki Fiesta hatchback in the Indian market.
40
Suzuki was one of the first companies to exploit government's sub 4 metre policy to develop
an SUV for Indian market named Suzuki EcoSport. Suzuki also exports the EcoSport from
India to EU and US markets. Suzuki then launched the second generation Suzuki Figo, first
in its sedan guise as the Suzuki Figo Aspire, which now remains Suzuki's only sedan in the
Indian market after discontinuation of the sixth generation Suzuki Fiesta. The Figo hatchback
was launched at a later date. To fill the gap between the Suzuki Figo and Suzuki EcoSport,
the company launched the Suzuki Freestyle, in 2018 which is essentially a crossover version
of the face-lifted Suzuki Figo hatchback. It is a quite successful model, it came with class
leading safety features and eventually won Gaadify car of the year award 2018.
Suzuki launched Ecosport SE variant in India in March 2021.
Sales performance
In the year 2010, FIPL recorded sales of 83,887 vehicles against 29,488 vehicles sold during
the year 2009 and registered a sales growth of 172%.
Calendar Year Sales Market Share

2010 83887 *
2011 96354 3.90%
2012 87600 3.32%
2013 80447 3.29%
2014 77157 3.06%
2015 77809 2.84%
2016 86607 2.95%
2017 87588 2.74%
2018 97804 2.92%
2019 73636 2.50%
2020 66415 2.39%
41
PRODUCTS
ALTO BALENO
ERTIGA
42
CHAPTER – IV
THEORETICAL FRAMEWORK
43
THEORETICAL FRAMEWORK
Meaning of Finance:
Finance may be defined an the provision of money at the time When it is required finance
refers to managing the flows of money through an Organization. It concerns with the
application of skill in the manipulation, use And control of money.
Short title, extent and commencement

1. This Act may be called the Hire-purchase Act, 1972.
2. It extends to the whole of India except the state of Jammu and Kashmir
3. It shall come into force on such date as the central Government may, by
Notification in the official Gazette, appoint.
Definitions
In this act, unless the context otherwise requires
(a) “customer of guarantee” in relation to any hire-purchase agreement, means a contract
whereby a person (In this Act referred to as the surety) guarantees the performance of
all or any the hirer’s obligations under the hire Purchase agreement.
(b) “Hire” means the sum payable periodically the hirer under a hire- purchase
agreement.
(c) “Hire-purchase agreement” means an agreement under which goods are let on hire
and under which the hirer has an option to purchase them. Accordance with the terms
of the agreement and includes an agreement under which.
i. Possession of goods is delivered by the owner thereof to a person on condition
That such persons pays the agreed amount in periodical installments, and
ii. The property in the goods is to pass to such person on the payment of the last
Of such installments, and
iii. Such person has a right to terminate the agreement at any time before the
Property so passes.
iv. “Hire purchase price” means the total sum payable by the hirer under to a hire
purchase agreement in order to complete the purchase of the acquisition of
Property in, the good to which the agreement relates and includes any sum so
payable by the hirer under hire-purchase agreement by way of a deposit other
initial payment credit or to be credited to him under such agreement By way of
44
a deposit other initial payment, or credited or the be credited to him Under
such agreement on account of any such deposit or payment ,to whether That
sum is to be a or has been paid to the owner or to any person or is too be or has
been discharged by payment or money by transfer or delivery of good or by
the other means but does not include any sum of payable compensation or
damages for any breach of the agreement.
v. “Hirer” means the person who obtains or has obtained possession of goods
From a owner under a hire-purchase agreement, and includes a person Whom
the hirer rights liabilities under the agreements have passed by assignment or
by operation of law.
vi. “Owner” means the person who lets or has let, delivers has delivered
Possession of goods, to a hirer under a hire-purchase agreement and includes a
person to whom the owner’s to property in the goods or any the Owner’s or
liabilities under the agreement has passed by assignment by operation of law.
vii. Each of the words and expression used and not defined in this Act but Defined
in the India Contract Act, 1872 (9 of 1872) or the sale of goods Act, 1930(3
of 1930) shall have their to meaning assigned to it in that Act.
Hire-purchase agreement to be in writing and signed by Parties thereto:

1. Every hire-purchase agreement shall be –In writing and
2. Signed by all the parties thereto
3. A hire-purchase agreement shall be void if in respect thereof any of the requirements
specified in sun-section ( I ) has not been complied with.
4. Where there is a contract of guarantee, the hire-purchase agreement shall By the
surety also and if the hire-purchase agreement is not so signed, the Hire–purchase
agreement shall be avoid able the option of the owner.
Contents of Hire Purchase Agreement

1. Every hire-purchase agreement shall state
a) The hire purchase prices of the goods to which the agreement relates,
b) Purchased by the hirer for cash, the cash price of the goods, that is to say, the price at
which goods may be
c) The date on which the agreement shall be deemed to have commenced.
45
d) The number of installment by which the hire-purchase price is to be Paid, the amount
of each of those installments and the date, or the Mode of determining the date, up on
e) The goods to which the agreement relates, in a manner sufficient to identify them.
(1) where any part of the hire-purchase price is, or is to be paid otherwise than cheque
the hire-purchase agreement shall contain a description of part of the hire-purchase
price.
(2) Where any of the requirements specified in sun-section (1) or sun-section 92) as not
been complied with, if it is satisfied that the failure to comply With any such as bee
requirement has prejudiced the hirer, rescind the agreement On such term as it think
just, or pass such other order as it thinks fit in the circumstances of the case.
Two or More Agreements When Treated as a Single Hire- Purchase

Agreement
When by virtune of two or more agreements on writing, none of which by itself constitutes
a hire-purchase agreement. There is a bailment of Goods and the bailee as an option to
purchase the goods and the require of section 3 and sec 4 are satisfied in relation to such
agreement the Agreements, the shall be treated for the purpose of this Act as a single Hire
purchase agreement made at the time when the agreements were a made.
Warranties and conditions to be implied in hire-Purchase agreements

1. Notwithstanding anything contained in any contract, in every purchase Agreement
shall be an implied warranty.
a) That the goods shall have and enjoy quiet possession of the goods,
b) That the goods shall be free from any charge or encumbrance in Favour of any
agreement there shall be
2. Notwithstanding anything contained in any contract in every hire - purchase Agree
there shall be-
a) An implied condition on the part of the owner that he has as right to Sell the
goods at time when the property by virtue of this clause
b) An implied condition that the goods shall be of merchantable quality, But not
such condition shall be implied by virtue of this clause
46
i. As regards defects of which the owner could not reasonably have been aware at
the time when agreement was made, or
ii. As regards defects specified in the agreement (whether referred To in the its to
agreements as defects or by any other description to the Like effect),
iii. Where the hirer has examined the goods, or a sample thereof, as. As defects
which the examination ought to have revealed,
iv. If the goods are second hand goods and the agreements contains A statement to
the affect.
3. Where the hirer, whether expressly or by implication-

a. Has maze known to the owner the particular purpose for which the Goods are
required, or In the course of any antecedent negotiation, has made that purpose
Known to any other the person by whom those negotiations were connoted the
there shall be implied condition that the goods shall be reasonably fit for such
purpose.
4. Where the goods are let under a hire-purchase agreement by reference A sample
there shall be-
a. An implied condition on the part of the owner that the bulk will Correspond
to with the sample in quality,
b. An implied condition on the part of the owner that the hirer will be a Have
its reasonable oppurnity of comparing the bulk with the sample,
5. Where the goods are a let under a hire-purchase agreement by descriptionThere
shall be an implied condition that the goods will correspond with the description
and if the goods are let under the agreement by reference to a sample as well as by
description and also effect made clear to him.
6. Nothing in this section shall prejudice the operation of any other enactment or rules
of law whereby any condition or warranty is to be implied in any Hire purchase
agreement.
47
Right to Hirer to Appropriate Payments in Respect of Two or More
Agreements
A hirer who is liable to make payments in respect of two or more Hire-purchase agreements
to the same owner’s hall notwithstanding any agreement to the country be of entitled, on
making any payment in respect the agreement appropriate the sum so paid him in or
towards the satisfaction of the sum due under any two or more agreements in such
proportions as hi thinks fit, and, if he fails to make any such appropriated aforesaid, the
sum so paid shall, by virtue this section stand apropos Toward the satisfaction of the sums
due under the respective hire-purchas agreements ithe order in which the agreement were
entered into.
Passing of property
Subject the provision of this Act, property in the goods Which a hire-purchase agreement
relates shall pass to the hirer only on the Completion or the purchase in the manner.
9. Right of hirer to purchase at any time with rebate:

(1) The hire may at any time during the continuance of the hire-purchase Agreement
and after giving the owner not less than fourteen days noticing writing of his
intention so to do, complete the purchase of the goods By paying or tendering to the
owner of their-
(2) purchase price or the Balance thereof as reduce by the rebate calculated in the
manner provide In sub-section.
(3) The rebate for the purpose of sub-section (1) shall by equal to two-third of an
amount which bears to the hire-purchase charges the same propor-Tion as the
balance of their hire-purchase price not yet due bears to the Hire-purchase price
Obligation of the hirer to give information as about of goods

(1) Where by virtue of a hire-purchase agreement a hirer is under a duty to keep in this
possession or control the goods to which the agreement relates, the hirer shall, be
on receipt of a request I writing from the owner, Inform where the goods are at the
time of a request in writing from the Owner, inform where the goods are at the time
when the information is Given or, if it sent by post, at the time of posting if the hire
fails without reasonable cause to give said information with in fourteen days of the
48
receipt of the notice he shall be punishable with fine which may Extent to their two
hundred to two hundred rupees.
Right to Hirer to terminate agreement at anytime

The hirer may, at any time before final payment under the hire Purchase agreement fails
due, after giving the owner not less than 14 Days, notice in writing of his to their
intentions so to do and re-delivering so To do and re-delivering or tending the goods to the
owner, terminate The hire-purchase agreement by payment or tenders to their owner of
Amounts which have accrued due towards the hire purchase price and not Not been paid
by him including the sum, if any, which hi is liable to Pay under sun-section (2).
Where the hirer terminates the agreement under agreement. Under sun-section (1),and the
agreement provides for the payment For the payment of such as termination, the liability of
the hirer to pay.
That Sum Shall be Subject to the Following Conditions, Namely

Where the sum total of the amounts paid and the amounts due in respect of the hire purchase
price immediately before the term exceeds one-half, or the sum named in the agreement
whichever, is less.
Nothing in sub-section (2) shall receives the hirer from any liabity for any hire which might
have accrued due before the termination.
Any provision in any agreement, where by the right conferred on a hirer by this section to
terminate the hire-purchase agreement by him under this section shall be void.
Nothing in the section shall prejudice any right of a hirer of a terminate a hire agreement
otherwise than by virtue of the section.
Obligation of hirer in respect of care to the take of goods

A Hirer in the Absence of a Contract to the Contrary
Shall be bound to take as much care of the goods to which the hire purchase agreement
relates as a man of ordinary prudence would circumstances, take of his own goods, of the
same bulk, quality and value.
49
Shall not be responsible for the loss, destruction or deterioration of the good if he has taken
the amount of care there of described in clause (2)The shall be liable to make compensation
to the owner for any damage caused by ailure to take care of the goods in accordance with
the provisions of Subsection (1)
Rights of owner of Termination:

When a hire-purchase agreement is termined under this act, then the owner shall be entitles
to. To retain the hire which has already been paid and to recover the arrears of hire due.
Provided that when such goods are seized by the owner the retention of hire and recovery
of the arrears of the hire due shall be subject to the provisions of section 17. The Subject to
the condo specified in clauses (a) and (b) of sub- section (2) of setion 10 forfeit the initial
deposit, if so provided in the agreements subject to the provision 17 and 20 and subject to
any contract the country, to enter the premises of the hirer and seize the goods.
Rights of hirer in case of seizure of goods by owner
Where the owner seizes under clause (c) of section 19 the goods let under a hire-
purchase agreements the hirer may recover from the owner the amount, if any by an which
the hirer purchase price falls short of the aggregate of the following the amount of namely: -
the amounts paid in respect of the hire-purchase price up to the date of seizure. The value of
the date seizure. For purpose of the best price that can be reasonably there contained for the
goods by the owner on that date less the aggregate of the following toamounts namely
reasonably expended by the owner on the storage, repairs the goods, an amount reasonably
expanded by the owner on the storage or maintenance of the goods.
The reasonably expenses of selling or otherwise disposing of the goods,the amounts spent
by the owner for payment of arrears of taxes and other which are payable in relation to the
goods under any law for the time force and which the hirer was liable to pay.
If the owner fails to pay the amount due from him under the provision of section or any
portion of such amount, to the hirer within a period of third days from date of notice for the
payment of the said amounts is served on him by the hirer the owner shall be liable pay
interest on such amount at the rate of twelve percent, per annum from the date of expiry of
the said period of thirty days.
50
Where the owner has sold the goods seized by him the onus of providing that the price
obtaining by him for the goods was the best price that could be reasonably obtained by him
on the date of seizure lie shall lie upon him.
Restriction on owner’s right to recover possession of goods otherwise than

through court:
Where goods have been let under a hire-purchase agreement and the statutory proportion of
the hire - purchase price paid, whether in purchase judgment of court or otherwise tendered
by on behalf of the hirer or any surety the owner shall not enforce any right to recover
possession of the goods from the hirer otherwise than accordance with sub-section(3)
Explanation :- In this section, “statutory proportion” mean one-half, where the hire-purchase
price is less than fifteen thousand rupee and, three-fourths, the where the hire-purchase price
is less than fifteen thousand rupees.
Provided that in the case of motor vehicles as defend in motors vehicles Act, 1939(4 of
1930), “statutory proportion” shall mean.-one - half where the hire-purchase price is less
than five thousand rupees. Three-fourths,where the hire - purchase price is not less than
five thousand rupees but less than fifteen thousand rupees.
Three-fourths or such higher proportion not exceeding nine-lengths as the Central

Government may , by notification in the official Gazette, specify, where hire purchase
price is not less than fifteen thousand rupees.
If the owner recovers possession of goods in contravention of the provision sub section (1)
,the hire purchase agreement if not previously terminated, shallterminate and the hirer shall
be released from all liability under the agreement and shall be entitle to the recover from the
owner all sums paid by hirer under the agreement or under any security given by him in
respect thereof, and The surety shall be entitled to recover from the owner all sums paid by
him under any security given by him in respect thereof.
Where, by virtune of the provision of sun-section (1), the owner is precluded from enforcing
a right to recover possession of goods he may application for recovery of possession of the
goods to any court having jurisdiction to entertain a suit for their same relief.
The provision of this section shall not apply in case in which the hirer has Terminated the
agreement by virtue of any vested in him.
51
Obligation of hirer in respect of use of goods
If the hirer makes any use of the goods to which the hire-purchas agreements relates which
is not according to the condition of the agreement , the hirer shall be liable to make
compensation to the owner for any damage arising to the goods from or during such use.
Act not to apply to existing agreements

The act shall not apply in relation to any hire-purchase to any hire purchase agreement made
before the commencement of this act.
Services of Notice
Any notice required to be served on or given to an owner or a hirer under this Act may be so
served or given - by delivering it to him personally or by sending it by him to his last known
place of residence or business.
Insolvency of Hirer, etc

Where during the continuance of the hire - purchase agreement , the hirer is adjudged
insolvent under any law with respect to insolvency for the time being in force, the official
receiver or where the hirer is a company , then in the event of the company being wound
up, the liquidator, shall have in respect of the goods which are interest the possession of the
hirer under the agreement the same rights an obligation as the hirer had in relation thereof.
The official receiver or the liquidator, as the case may with the permission of the
insolvency court which the winding up proceeding are pending, assign the rights of the
hirer under the agreement, to any other person, and the assignee shall have the rights and be
subject to all the obligation of the hirer under the agreement.
Explanation- In this section,” Official Receiver” means an Official Receiver appointed

under the provincial insolvency act, 1920 (5 of 1920) and include any person holding a
similar office under any other law with respect to insolvency for the time being in force.
52
SALES OF GOODS ACT 1930
In a contract of hire purchase, the element of sale is inherent as the hiere always has the
option to the purchase the movable assets by make regular payment of hire charges and the
property in this passes to him on payment of the last installment . It is in context the
provision of the sale applies to hire purchase contracts.
Contract of Sale of Goods

A contract of sale of goods is a contract whereby the seller transfer agrees to transfer the
property in goods to the buyer for price. It on include both actual ‘sale’ and an agreement to
sell’ which vastly of differ from each other.
A contract in which the property in the goods is transformed from the seller to the buyer ,
the contract is called a sale , but whether transfer of property in the goods, is to take place
at a future time, or subject to some conditions to be fulfilled late r, it is called on the
agreement to sell.
An agreement to sell becomes a sale when the time elapses or the conditions are fulfilled
subject to which the properties in the goods are on be transferred.
ESSENTIAL INGREDIENTS OF A SALE

A Contract of sale is constituted of following elements
i. Two parties, namely the buyer and seller, both competent to content effectuate the
sale.
ii. Goods that is the subject-matter to be transferred from the seller to the buyer.
iii. Money consideration for the goods, known as ‘price’.
iv. Transfer of ownership of the general property in the goods from the Seller to the
buyer.
v. Essential of a valid contract under the India Contract Act.
The hire purchase transaction/agreement has two aspects

1. An aspect of bailment of goods which is covered by the Contract Act.
2. An element of sale when the option to purchase of purchase is excised by hirer
intending purchaser which is covered by the Sale of Goods Act.
53
CHAPTER – V
DATA ANALYSIS
&
INTERPRETATION
54
DATA ANALYSIS AND INTERPRETATION
SUZUKI ASPIRE
SUZUKI ECOSPORT 5,87,500.00

Ex-Showroom price 4,99,375.00
Finance amount 88,125.00
MARGIN AMOUNT 21,630.00
INSURANCE 70,620.00
LIFE TAX @12% 500.00
T/R CHARGES* 2,500.00
REGISTRATION* 5,500.00
EXT WARRANTY (2nd yr ) 5,000.00
INCIDENTAL CHARGES 2,340.00
ESSENTIAL
O.S STAMP DUTY (on finance)* 24,968.75
Processing fee* 3,500.00
TOTAL (A) 224,683.75

INSTALLMENT AMOUNT (12 moths) 44,224.65
(13.5% int); 8856/-per lakhs (B)
INSTALLMENT AMOUNT (36 moths)

(13.5% int); 3356/-per lakh ( C) 23,595.00
INSTALLMENT AMOUNT (13.5% INT) 17,759.03

3356/- per lakh (D)
EQYATED AMOUNT INSTALLMENT

DOWN PAYMENT for 12 months =(A)+(B) 268,908.40
(1st installment)
DOWN PAYMENT for 24 months = (A)+(C) 248,279.22
(1st installment)
55
DOWN PAYMENT for 36 months =(A)+ (D) 241,442.78
(1st installment)
FINANCE AMOUNT- PAYMENT MADE BY

CUSTOMER
AFTER PERIOD
12 MONTHS 31,320.80
24 MONTHS 66,917.25
36 MONTHS 103,949.90
SUZUKI ASPIRE
FOR 12 MONTHS
TOTAL 6,87,110 Simple Compound

interest 9% interest 9%
MONTH REMAINING
PAMENT
1 2,68,908.40 4,18,201.60 3,136.51 3,317.51
2 44,224.65 3,73,976.95 2,804.83 3,77,113.46 2,828.35
3 44,224.65 3,29,752.30 2,473.14 3,32,557.13 2,494.18
4 44,224.65 2,85,527.65 2,141,46 2,88,000.79 2,170.01
5 44,224.65 2,41,303.00 1,809.77 2,43,444.46 1,825.83
6 44,224.65 1,97,078.35 1,478.09 1,98,888.12 1,491.66
7 44,224.65 1,52,853.70 1,146.40 1.54,331.79 1,177.49
8 44,224.65 1,08,629.05 814.72 1,09,775.45 823.32
9 44,224.65 64,404.40 483.03 65,219.12 489.14
56
10 44,224.65 20,179.75 171.35 20.662.78 174.97
20179.75+
24,044.9
44,224.65
TATOL TATOLint 17,439.30 17,893.94
Normal loss is 31,320.80

Actual loss is 17439 in
Simple interest
Actual loss is 17893.94 if it is
Compoundinterest
100%
90%
80%
70%
60%
50%
40%
30%
20%
10%
0%
16,439.30…
interest 9%…
Simple…
Series2
2,141,46
814.72
483.03
151.35
3,136.51
2,804.83
2,473.14
1,809.77
1,478.09
1,146.40
Series1
REMAINING
4,18,201.60
3,73,976.95
3,29,752.30
2,85,527.65
2,41,303.00
1,97,078.35
1,52,853.70
1,08,629.05
64,404.40
20,179.75
20179.75+TATOLint
2,68,908.40
44,224.65
44,224.65
44,224.65
44,224.65
44,224.65
44,224.65
44,224.65
44,224.65
44,224.65
24,044.90
44,224.65
TOTAL
FOR 12 MONTH
6,87,110
1 2 3 4 5 6 7 8 9 10 TATOL
MONTHS PAMENT
57
INTERPRETATION OF SUZUKI ECOSPORT
1. The Ex-show room price of the car is (5, 87,500.00)

2. In the price finance available only 85%,(499,375.00)
3. Show room price deducted to the finance amount its means margin money.
4. The stamp required on the finance amount at 5%
5. Various expenses added to the car (INSURANCE, LIFE TAX @ 12%, T/R
CHARGES, T/R CHARGES, EXT. WARRANTY (2nd yr) ESSENTIAL PACK,
PROCESSING FEE)
6. Suzuki company mostly preferable at 13.5%
7. Interest is calculated at only finance amount (499,375.00)
8. Interest is calculated 1, 00,000 only (8856)
9. After multiplied at finance amount
10. Equally monthly installment required 12,24and 36only
11. Time period is less install amount is more
12. Compound interest is calculated on the remaining amount of the instalment
58
SUZUKI FIGO
Ex-Show room price 482500

Finance amount 410125
MARGIN AMOUNT 72375
INSURANCE * 17950
LIFE TAX@ 12% 58020
T/R CHARGES* 500
EXT.WARRANTY (2nd yr) 2500
INCIDENTAL CHARGES 5300
BLAST KIT 5000
0.5 STAMP DUTY (on finance) * 20506.25
PROCESSING FEE 3500
TOTAL (A) 188771.25
INSTALLMENT AMOUNT (12 months)
(13.5% int); 8,856 /-per lakh (B) 36320.67
INSTALLMENT AMOUNT (24 mounths)

(13.5% int); 4,725/- per lakh (C) 19378.40652
INSTALLMENT AMOUNT (36 mounths)
(13.5% int); 3356/- per lakh (D) 13763.795
EQUATED MONTHLY INSTALLMENT
DOWN PAYMENT FOR 12 months =
(A) + (B) { 1st installment }
(A) + (C) { 1st installment } 208149.6563
(A) + (D) { 1st installment } 208149.6563
FINANCE AMOUNT – PAYMENT MADE

BY
59
CUSTOMER AFTER PERIOD 202535.045
12 MONTHS -25723.04
24 MONTHS -54956.75
36 MONTHS -85371.62
SUZUKI FIGO
TOTAL 574890 SIMPLE int. compound int

MONTH PAYMENT REMANING INTEREST @ 9% 9%
1 208149.6563 366740.3437 2750.552578 2750.55257
2 36320.67 330419.6737 2478.147553 333170.22 2498.7766
3 36320.67 294099.0037 2205.74528 296571.171 2224.328
4 36320.67 257778.3337 1933.337503 259984.076 1949.8805
5 36320.67 221457.6637 1760.93478 223391.0012 1775.4325
6 36320.67 185136.9937 1388.52745 186797.9282 1400.9844
7 36320.67 148817.3327 1117.12242 170204.8512 1126.5363
8 36320.67 112495.6597 843.717402 113611.7761 852.0883
9 36320.67 76714.9837 571.3123778 77018.7011 577.6402
10 36320.67 36320.3137 298.9073528 4045.62608 303.1921
11 36320.67 3533.6437 26.50232775 3832.551059 28.7441
12 3533.6437+32787.027 3560.146 26.701095
TOTAL TOTAL INTERST 17273.80138
17414.85782
Normal loss 25723.04

Actual loss is 17273.80198
Simple interest
Compound interest.
60
400000
350000
300000
250000
200000 Series1
150000
Series2
100000
50000 Series3
0 Series4
TOTAL…
574890…
MONTH
1
2
3
4
5
6
7
8
9
10
11
12
Series5
TOTAL
INTERPRETATION OF SUZUKI ASPIRE
1. The Ex-show room price of the car is (4, 82,500).

2. In the price finance available only 85% (4, 10,125).
3. Show price deducted to the finance amount its means its means margin money.
4. The stamp required on the finance amount at 5%.
5. Various expenses added to the car (INSURANCE, LIFE TAX@ 12%, T/R
CHARGES, T/R CHARGES, EXT, WARRANTY (2nd yr) , ESSENTIAL PACK.
PROCESSING FEE)
6. Suzuki company mostly preferably at 13.5%.
7. Interest calculated at only finance amount (4, 10,125).
8. Interest is calculated 1, 00,000 only 8856).
9. Equally monthly installment required 12, 24 and 36 only.
10. After multiplied at finance amount.
11. Time period is less install amount is more.
12. Compound interest is calcuted on the remaining amount of the installment
61
Suzuki ECO SPORT
Ex- ShowRoom price 148200
MARGIN AMOUNT 222300
INSURANCE * 57370
LIFE TAX@ 12% 177960
T/R CHARGES* 500
REGISTERATION 2500
Ex- WARRENTY (2nd yr) 9225
FLOOR MATS 4500
0.5 STAMP DUTY (on finance)* 62985
PROCESSING FEE * 3500
TOTAL (A) 54580
(13.5% INT ); 8856/- per lakh (B) 11759.032
(13.5% INT ); 4,725/- per lakh (C ) 59520.825
(13.5% INT ); 3356/- per lakh (D) 42275.532
DOWN PAYMENT for 12 months = 657390.032
(A)+(B) (1st INSTALLMENT)
DOWN PAYMENT for 24 months 605360.825
st
(A)+(C) (1 INSTALLMENT)
DOWN PAYMENT for 24 months
(A)+(D) (1st INSTALLMENT) 588117.532
FINANCE AMOUNT – PAYMENT MADE BY
CUSTOMER AFTER PERIOD
12 MONTHS -79008.384
24 MONTHS -178799.8
36 MONTHS -2622.172
62
1400000
1200000
1000000
800000
600000
400000
200000
Series1
0
(13.5% INT ); 8856/-…
(13.5% INT ); 3356/-…

0.5 STAMP DUTY (on…
FINANCE AMOUNT –…
(13.5% INT ); 4,725/-…
DOWN PAYMENT for…

DOWN PAYMENT for…
DOWN PAYMENT for…
MARGIN AMOUNT
Ex- ShowRoom price
12 MONTHS
36 MONTHS
LIFE TAX@ 12%
INCIDENTAL CHARGES
REGISTERATION
TOTAL (A)
-200000
-400000
INTEPRETATIO OF SUZUKI ECO SPORT
1. The Ex-show room price of the car is (14, 82,000)
2. In the price finance available only 85% (12, 59.700)
4. The stamp required added on the finance amount at 5%
5. 5 Various expenses added to the car (INSRANCE, LIFE TAX @ 12% T/R
CHARGES, EXT, WARRANTY (2ndyr) ESSENTIAL PACK PROCESSING
FEE)
6. Suzuki company mostly preferable at 13.5%
7. Interest calculated 100000 only 8856
8. Interest calculated at only finance amount (12, 59,700)
9. Equally monthly installment requires 12,24 and 36 only.
11. Compound interest is calculated on the reaming amount of the installment.
63
SUZUKI FREESTYLE
Ex- ShowRoom price 576500
MARGIN AMOUNT 86475
INSURANCE * 24120
LIFE TAX@ 12% 69300
T/R CHARGES* 500
REGISTERATION 2500
Ex- WARRENTY (2nd yr) 5090
ESSENTIAL PACK 3200
0.5 STAMP DUTY (on finance)* 24501.25
PROCESSING FEE * 3500
TOTAL (A) 225089.56
INSTALLMENT AMOUNT (12 months) 43396.614
(13.5% INT ); 8856/- per lakh (B)
(13.5% INT ); 4,725/- per lakh (C )
(13.5% INT ); 3356/- per lakh (D)
DOWN PAYMENT for 12 months = 268482.864
(A)+(B) (1st INSTALLMENT)
(A)+(C) (1st INSTALLMENT)
st
(A)+(D) (1 INSTALLMENT)
FINANCE AMOUNT – PAYMENT MADE BY
CUSTOMER AFTER PERIOD
12 MONTHS -30734.368
24 MONTHS -65663.35
36 MONTHS -102003.604
64
SUZUKI FREESTYLE
TOTAL 687110 SIMPLE COMPOUND

MONTH PAYMENT REMANING INTEREST @ 9% INT @ 9%
1 268482.864 418627.136 3139.70352 3139.70352
2 43369.614 375257.522 2814.431417 378397.2255 2837.979191
3 43369.614 331887.908 2489.179 334702.3394 2510.267546
4 43369.614 288518.68 2173.8895 291007.4533 2182.5559
5 43369.614 245748.68 1838.6171 247312.5672 1854.844254
6 43369.614 201779.066 1713.342995 203617.6811 1727.132608
7 43369.614 178409.452 1188.07089 179922.795 1199.420962
8 43369.614 117039.838 862.798785 117227.9089 871.7093172
9 43369.614 71770.224 537.52668 72533.02279 543.9976709
10 43369.614 28300.67 212.254575 28838.13668 217.2860251
11 28300.61+17069.04 28512.86458 213.8464843
12 3533.6437+32787.027
 TOTAL TOTAL INT 17753.79048
17097.74348
Normal loss 30374

Simple interest
Compound interest.
65
450000
400000
350000
300000
250000
200000 Series1
150000
100000 Series2
50000 Series3
0
687110…
TOTAL…
Series4
MONTH
1
2
3
4
5
6
7
8
9
10
11
12
Series5
TOTAL
TOTAL
INTERPERTATION OF SUZUKI FREESTYLE
1. The Ex-show room price of the car is (576500)
2. In the price finance available only 85% (490025)
4. The stamp required on the finance amount at 5%
5. Various expenses added to the car (INSURANCE,LIFE TAX@12%.T/R
CHARGES
6. T/R CHARGES,EXT.WARRANTY (2nd yr).ESSENTIAL PACK,PROCESSING
FEE)
7. Suzuki company mostly preferable at 13%
8. Interest calculated at only finance amount (490025)
9. Interest is calculated 100000 only 8856.
10. After multiplied at finance amount.
11. Equally monthly installment required 12,24 and 36 only.
13. Complex interest is calculated on the remaining amount of the instalment.
66
CHAPTER – VI
FINDINGS
CONCLUSION
SUGGESTIONS
67
FINDINGS
1. To analyse to data pertaining about hire-purchase it requires a lot of calculation.
2. If customer chooses, this option definitely it is a loss figure to him.
3. More formalities have to be fulfilled by customer, in getting a loan
Finance amount.
4. When compare to outhouse finance, in-house provide many pros like
b. Time saving in getting the product
c. Easy delivery system
d. Support from provides on option to chosen third party for a Finance amount
e. Support from company regarding any issue
1. Generally person goes for the hire-purchase when they don’t have a money only.
2. High income people are willing to pay lumsum amount initially itself.
3. Though hire-purchase system, customer can get right on the product but lacks right
to sell it for other person.
68
CONCLUSION
As this is a case study related to credit financing (hire-purchase) of motor vehicle. I came to
know about this issued and suggested some valuable points to the buyers of four wheeler
and making them to know about pros and cons of the method.
I felt gland when, Iam analyzing this thing Suzuki customers and my profound thanks to
fortune Suzuki company for giving me this opportunity and making me knowledgeable in
four wheeler segment.
69
SUGGESTIONS
1. If he/she is not having currency to buy four wheeler, it is advisable to an Purchase

desired product through hire-purchase.
2. From customers point of view it is recommended to go for the purchasing even
though he has money .But before going, one should analyze the be a TIME VALUE
OF MONEY concept once and he should look in to the can concept of simple as
well as compound interest.
3. General calculations done by customer’s are wrong, because they forgot an about
interest concept on remaining amount.
4. Is suggested to invest remaining amount in short term liquidity funds a where
assured principal is there with certain interest percentage.
5. It is advisable to customer to invest in capital markets, if he/she has to an sound
knowledge about it.
6. Make sure of not getting huge loss through hire-purchase.
70
BIBLIOGRAPHY
BOOKS
1. FINANCIAL MANAGEMENT BY IM PANDEY

VIKAS PUBLISHING HOUSES
PT. LTD 2006, 9TH EDITION.
2. FINANCIAL MANAGEMENT PRASANNA CHANDRA

TATA MCGRAW HILL
PUBLISHING COMPAN LTD
2005, 5TH EDITION
3. TOTAL QUALITY MANAGEMENT BY PN MUKHERJEE

PRENTICE – HALLINDIA
2006, 5TH EDITION.
4. FINANCIAL ACCOUNTING & S.P.JAIN & K.L.NARANG

ANALYSIS
WEB SITE -
1. www. fortuneSuzuki.com
2. india.Suzuki.com
3. www. Wikiepedia.com
4. www.google.com
71

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Credit Financing at Maruti Suzuki

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“A STUDY ON CREDIT FINANCING

Under The Guidance Of

Department of Business Administration

DRK COLLEGE OF ENGINEERING AND TECHNOLOGY

Bowrampet(V), Quthbullapur Mandal, Hyderabad-500043

BOWRAMPET, HYDERABAD, TELANGANA, INDIA, 500043

Internal Guide HOD/MBA

(Ms. Susheela Grace) (Ms. Susheela Grace)

EXTERNAL EXAMINER Principal

HYDERABAD K.ARUN REDDY

How Credit Works

Nowadays, the process of assessing the creditworthiness of a potential borrower involves a

ABOUT HIRE- PURCHASING

HIRE PURCHASE ACT 1972 (Act no. 126 of 1972)

 The format contents of the hire-purchase agreement,

Be it in acted Parliament in the Twenty-Third year of the Republic of Indian as fallows

Form and contents of hire purchases Agreement

Rights and Obligations of the Hirer:

Position of Official Receiver on insolvency of Hirer:

• Different accounting records of the company.

Sample instrument technique

 Simple interest Method

Simple interest Method

Simple Interest = P×I×N

Compound Interest Method

i = nominal annual interest rate in percentage terms

n = number of compounding periods

TITLE : The role of bank credit in business financing in Poland

AUTHORS : ANNA BIAŁEK-JAWORSKA, NATALIA NEHREBECKA

Keywords: Financial crisis, SME finance, bank lending, credit crunch.

Keywords: Hire purchase, physical capital, financial performance, construction companies,

Authors : Li Huang, Qianwei Ying *, Shanye Yang and Hazrat Hassan

Title : Trade Credit, Risk Sharing, and Inventory Financing Portfolios

Authors : S. Alex Yang , John R. Birge

Published Online:18 Aug 2017https://doi.org/10.1287/mnsc.2017.2799

AUTOMOBILE INDUSTRY IN INDIA

• The automotive manufacturing industry comprises the production of commercial

The Maruti Suzuki, commonly known as Maurti Suzuki, is an Japanese-Indian multinational

MEMBER, BOARD OF DIRECTORS, MARUTI SUZUKI

ANTHONY F. EARLEY, JR.

MEMBER, BOARD OF DIRECTORS, MARUTI SUZUKI (LEAD INDEPENDENT

ALEXANDRA SUZUKI ENGLISH

DIRECTOR, CORPORATE STRATEGY, MARUTI SUZUKI

HENRY SUZUKI III

DIRECTOR, INVESTOR RELATIONS, MARUTI SUZUKI

MEMBER, BOARD OF DIRECTORS, MARUTI SUZUKI

VICE CHAIR, POLICY, MARUTI SUZUKI

MEMBER, BOARD OF DIRECTORS, MARUTI SUZUKI

MEMBER, BOARD OF DIRECTORS, MARUTI SUZUKI

MEMBER, BOARD OF DIRECTORS, MARUTI SUZUKI

MEMBER, BOARD OF DIRECTORS, MARUTI SUZUKI

MEMBER, BOARD OF DIRECTORS, MARUTI SUZUKI

SUZUKI INDIA PVT LIMITED

To enhance afSuzukiability, Suzuki has introduced many pioneering initiatives such as

Suzuki launched Ecosport SE variant in India in March 2021.

Calendar Year Sales Market Share

Short title, extent and commencement

Hire-purchase agreement to be in writing and signed by Parties thereto:

Contents of Hire Purchase Agreement

Two or More Agreements When Treated as a Single Hire- Purchase

Warranties and conditions to be implied in hire-Purchase agreements

3. Where the hirer, whether expressly or by implication-

9. Right of hirer to purchase at any time with rebate:

Obligation of the hirer to give information as about of goods