Presented By

Ameya Ranadive (36)

PIET MBA
 Slide content
• Advent of MUL
• Structure of the company
• Indian car industry
• Product and process technology
• Changing the rules of the game
• The road ahead
 Advent of Maruti Udyog Ltd.
• Came into being in the year 1982
• Company was christened Maruti Udyog Ltd.
• The first car rolled off the assembly line in Dec
1983, with a 796cc 3 cylinder engine that
delivered 39.5 bhp.
• Key of the first car handed over to Mr. Harpal
Singh
• Soon, MUL became the highest volume car
manufacturer in Asia, outside Japan and Korea
 Maruti
• Exceeded volume targets, and in March 94
produced 1 million vehicles
• Had produced over 4 million vehicles by April
2003
• Was the first and the only car company in the
world to lead its home maret in terms of market
share and in the JD customer satisfaction study
• Got selected 5 times in a row from 2000 to 2004
 Structure of the company
• Equity holding was about 40% in 1989
• Classified into public sector as long as the
equity of the GOI remained over 51%
• In 1992 MUL went upto 50%
• In 2002, Maruti Suzuki’s holding was 54.2%
making it subsidiary co. and GOI having 45.8%
of shares
• maruti suzuki holding.docx
 Sale of Stake
• A total of 36 public sector financial institutions
had submitted their expressions of interest
for buying the government's stake in MUL
• The government ranked in a total of Rs.
1567.60 crore out of his equity sale
 Companies that took the stake
• LIC of India • Rs. 682 ps
• State Bank of • Rs. 660 ps
India
• Rs. 725 ps
• SIDBI
• Rs 690
• Corporation Bk
• Rs. 665
• Union Bk of India

• State Bank of • Rs 660

Patiala
The Indian car industry
 Some facts
• Cars dominate the passenger vehicle market
by 79%. 
• Maruti Suzuki has 52% share in passenger cars
and is a complete monopoly in multi purpose
vehicles.
• In utility vehicles Mahindra holds 42% share.
 segments
• A- lower than 3 lacs
• B- between 3 lacs and 5 lacs
• C- between 5 lacs and 10 lacs
• D- between 10 lacs and 25 lacs
• E- above 25 lacs
 Indian passenger car market in FY
2002-03
INDUSTRY BY SIZE SALES VOLUMES % SHARE OF
SEGMENTS SEGMENT
A Compacts 195366 28%
B Mid-sized 375292 53%
C Premium 130983 18%
D&E Luxury 6437 1%
Total 708078
 SEGMENTS CARS

SEGMENT A MARUTI 800, MARUTI OMNI

SEGMENT B ZEN, ALTO, WAGON R, HYUNDAI SANTRO,TATA

INDICA, FIAT PALIO

LOWER C SEGMENT MARUTI ESTEEM, FIAT SIENA, HYUNDAI

ACCENT, TATA INDIGO, TOYOTA COROLLA,
FORD IKON, OPEL CORSA

UPPER C SEGMENT BALENO, CHEVROLET OPTRA, OPEL ASTRA,

MITSUBISHI LANCER, HONDA CITY

SEGMENT D TOYOTA CAMRY, ACCORD, MRCEDES,

HYUNDAI SONATA
MARUTI’S MARKET SHARE ACROSS
DIFFERENT SEGMENTS
 Some points
• Santro a product of HMIL was the most
formidable competitor in the small car
segment
• Santro was rated the ‘Best Small car’ in the JD
Power Asia Pacific Initial Quality and APEAL
studies for 3 years in a row
• According to the company sources, since the
production has shifted to India, Hyundai’s
realizations per car have almost doubled.
• Indica, a product of TML, was launched as a
car built for Indians by Indians.

• It sold 80,200 cars last fiscal (FY 2003-04)

• TML had been unable to supply the petrol

version of Indica cars to buyers since most of
the petrol vehicles manufactured at the
company’s Pune plant were being shipped to
MG Rover, UK
• Fiat Palio won the prestigious CNBC Autocar ‘
Car of the year’ award along with the ‘ Best
Value for Money car’ award.

• Due to reasonable pricing, people tended to

go for a Maruti 800 as their first car and then
as their resources increased some of them
shifted to Palio.
 Product & Process Technology
• The company gradually moved from CKD to
SKD and component manufacturing
• Quality was the hallmark of its maiden
product
• A rising yen and a high custom duty on raw
materials and components was a big challenge
• The company’s product design and the
product quality were controlled by Japanese
engineers
• The company was one of the early birds in
getting ISO 9000 and ISO 14000 certificates
but they have yet to bring out their
sustainability report for which they were one
of the four chosen by the CII

• Today, there are 13 companies operating in

India, with 64 models and 236 variants. MUL,
with 11 models and 64 variants leads the
pack. Hyundai, with 7 models and 30 variants
is the number two in terms of variety offered
 Changing the rules of the game
• EURO II engines were introduced
• Matiz pushed the sale of its cars which were
EURO II compliant. They were out of
competition soon due to trouble in the
mother plant in Korea
• The sales of MUL fell rapidly cause of the
engines
 Fall in the market share
• The overall market share, which was one time
at 84% started declining
• It fell to 58.6% in FY 02 and further came
down to 54.6%
• It further went down to 51.41% and 50.9% in
FY 04 and FY 05 respectively
 Innovation and Technology
• MUL’s Engineering centre has undertaken the in
house face lifting of models, reducing product
costs by developing capabilities of local suppliers
and becoming a regional R & D hub for SMC
• The hyundai group has recently dedicated an
annual R & D spend of close to US $2 billion from
US $1.2 billion
• It used common rail direct injection (CRDI) engine
in association with detroit diesel and the award
fuel cell Santa FE
 The Road ahead
• MUL has decided to invest Rs. 3271.9 crore in
two new ventures:
the new car manufacturing plant
the new engine and transmission plant

• MUL will hold 70% and 30% will be held by

SMC Japan
• HMIL investing a second plant in India at
Chennai
• HMIL’s capacity will increase from 4 lacs units
to 2.5 lacs units
• TML plans to have additional 50% additional
capacity for cars in place by end of 2005
• India is the 11th largest passenger car market
in the world and by 2010, the market is
forecast to have a value of $41.9 billion.