INSTITUTE OF PROFESSIONAL EDUCATION AND RESEARCH

MANAGEMNET ACCOUNTING
COST STRUCTURE AND PRICING POLICY OF MARUTI SUZUKI LTD.

SUBMITTED BYVIKRAM JEET SINGH

SUBMITTED TOPROF. MANIPADMA DUTTA

INTRODUCTION
Maruti Suzuki India Limited (MSIL, formerly known as Maruti Udyog Limited) is a subsidiary of Suzuki Motor Corporation, Japan. MSIL has been the leader of the Indian car market for over two and a half decades. The company has two manufacturing facilities located at Gurgaon and Manesar, south of New Delhi, India. Both the facilities have a combined capability to produce over a 1.2 million (1,200,000) vehicles annually. The company plans to expand its manufacturing capacity to 1.75 million by 2013. The company offers a wide range of cars across different segments. It offers 15 brands and over 150 variants - Maruti 800, people movers, Omni and Eeco, international brands Alto, Alto-K10, A-star, WagonR, Swift, Ritz and Estilo, offroader Gypsy, SUV Grand Vitara, sedans SX4, Swift DZire and Kizashi. In an environment friendly initiative, in August 2010 Maruti Suzuki introduced factory fitted CNG option on 5 models across vehicle segments. These include Eeco, Alto, Estilo, Wagon R and Sx4. In fiscal 2009-10 Maruti Suzuki became the only Indian company to manufacture and sell One Million cars in a year. Maruti Suzuki has employee strength over 8,500 (as at end March 2011) In 2010-11, the company sold over 1.27 Mnvehicles including 1,38,266units of exports. With this, at the end of March 2011, Maruti Suzuki had a market share of 44.9 per cent of the Indian passenger car market.

COST SHEET OF MARUTI SUZUKI

PARTICULARS RAW MATERIALS MATERIALS CONSUMED POWER & FUEL COST EMPLOYEE COST OTHER MANUFACTURING EXPENSES FACTORY COST ADMIN EXPENSES MISCELLANEOUS EXPENSES COST OF PRODUCTION SELLING & DISTRIBUTION EXPENSES COST OF SALES INTERPRETATION

2007 2008 2009 10,863.00 13,958.3 15,983.2 10,863.00 13.958.3 15,983.2 97.4 147.3 193.6 288.4 356.2 471.1 392.4 523.3 716.1 11,641.20 14,985.1 17,364.0 274.5 170.6 150.2 239.44 287.62 303.44 12,155.14 15,443.32 17,817.64 194.46 331.08 578.56 12,349.74 15,774.40 18,396.20

y The operating income of the company showed an increasing trend over the years. y The cost of sales increased gradually from 12,349.74 to 18,396.20. y The operating income increased from 2007 to 2009. y The net profit also increased from the year 2007 to 2009.

PRICING POLICY OF MARUTI SUZUKI y Company made huge investments in the plant situated at Manesar that is almost ready to reach its peak production level of 300,000 units. y The company also operates at the new engine facility located at Gurgaon. y Maruti Suzuki has a good network of internal resources to finance the companys operations, expansion plans as well as capital investments. y Light weight and fuel efficient cars.

CONCLUSION
Maruti Suzuki's pricing strategy helps both its customers and Maruti. Maruti offers a different model just at a price difference of around Rs. 10,000 for cars ranging between Rs. 3.25 lakhs to Rs. 4.50 lakhs. It offers five different cars in this range and different versions/models of each car. However does this makes more options available to a buyer or makes his/her decision making tough or does it help Maruti in any way. Such a strategy makes more option available to a customer. Due to so many options, most of the time customers have an option within their budget or around their budget. They may not have to push their budgets nor they have to settle for something which may not satisfy their needs, wants or expectations(however preferences might be there). Also such a large set of options allow customers to save his money as there are more chances of availability of a model with features only required by customer and not loaded with unnecessary features which may be useless to a customer.

BIBLIOGRAPHY

y Marutisuzuki.com y Yahoo finance