MARUTI SUZUKI INDIA LIMITED

Bibhushan Gautam
Hasib Mohmand
Helen
Pasang R. Sherpa
Rajnish Pandey

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• Maruti is a Sanskrit word
referring to Hanuman,
son of Marut, the Hindu
Wind God Vayu
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 VISION
“The leader in Indian
Automobile Industry,
creating customer
delight, shareholder’s
wealth; A Pride of India”
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 PROFILE
• Maruti Udyog Limited (MUL) was
established in February 1981
• Actual production commenced in 1983 (Maruti 800),

• The then only modern car in India based

on the Suzuki Alto kei car
• Competitors- the Hindustan Ambassador
and Premier Padmini (25 years out of date)

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• Partial subsidiary of Suzuki Motor
Corporation of Japan
• India's largest passenger car company, over
45% of the domestic car market.
• It is largely credited for having brought in an
automobile revolution to India.
• On 17 September 2007, Maruti Udyog
Limited was renamed Maruti Suzuki India
Limited.
• The company's headquarters are located in
Delhi.

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 SHARES
• Until recently, 18.28% -The Indian
government, and 54.2% -Suzuki of Japan.
• The BJP-led government held an initial
public offering of 25% of the company in
June 2003.
• As of 10 May 2007, Govt. of India sold its
complete share to Indian financial
institutions.

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 PLANT
• Manufacturing facilities - Gurgaon
and Manesar Maruti Suzuki’s
Gurgaon have a combined
capability to produce over
700,000 units annually

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 NETWORK
• 178 authorized dealers with 243 sales
outlets in 161 cities (March, 2003)
• 342 dealer workshops (March, 2003)
• 1,545 Maruti Authorized Service Stations,
which covered 898 cities in India backed
by Express Service Centers on 30
highways across the country (March, 2003)
• 299 vendors all over the country (supply of
raw materials, components and spare parts)
(March, 2003)

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 YIELD
• Produced over 6 Million vehicles (2004)
• Annual Exports more than 50,000 cars (2004)
• Annual Domestic market 730,000 cars (2004)
• Maruti 800, India's largest selling compact
car (2004) (More than a million units)
• Currently, Maruti Suzuki Alto tops the sales
charts (2009)
• Maruti Suzuki Swift is the largest selling in A2
segment (2009)

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• An average two vehicles roll out of the factory
in every single minute.
• The company takes approximately 14 hours to
make a car.
• Rated first in customer satisfaction among all car
makers in India (1999-2009 by J D Power Asia Pacific) I
• Globally the first automobile company to be
honored with an ISO 9000:2000 certificate (2001)
• Revenue- US$4.8 billion (2009)

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• Created history by going into
production in a record 13 months
• One of the most successful
automobile joint ventures, and
has made profits every year since
inception till 2000-01

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 PRODUCE
• The company offers a complete range
of 11 models in 50 variants of cars from
entry level Maruti 800 and Alto, to
stylish hatchback Ritz, A star, Swift,
Wagon-R, Estillo and sedans DZire,
SX4 and Sports Utility vehicle Grand
Vitara.

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 TARGET
15-30 Lacs

VITARA

BALENO, S X 4 3-5 Lacs

5-10 Lacs

ZEN, WAGON R, VERSA, SWIFT, ESTEEM

< 3 Lacs
800, OMNI, ALTO

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 HUMAN RESOURCE
• 6,903 employees, including 614
engineers, 84 MBA graduates and 24
chartered accountants (2009)
• Nearly 75,000 people are employed
directly by Maruti Suzuki and its partners
(2009)

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 MARKET SHARE

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 KEY COMPETITORS
• Tata Motors
• Hyundai
• Ford
• FIAT
• General Motors
• Honda
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 KEY EXPORTS
• Angola
• Benin
• Djibouti
• Ethiopia
• Europe
• Kenya,
• Morocco
• Sri Lanka
• Uganda
• Chile
• Guatemala
• Costa Rica
• El Salvador

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 POLITICAL EFFECTS
• Sanjay Gandhi Maruti in 1976, company fails
and its conversion by an Act of the Indian
parliament into a Public Limited Company in the
1981
• Suzuki’s involvement in Maruti in 1982 and last
until 1992 when Maruti-Suzuki ceases to be a
Government of Indian company
• Patronized by the Indian Government and
supported by Suzuki, Maruti-Suzuki is shielded
from international competition and able to
outperform domestic competition.

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• Janata Party-led government launched investigation
report into the ‘Maruti scandal' indicates a host of
irregularities among them violations of India’s Foreign
Exchange Regulation Act.
• Yet, Sanjay Gandhi is spared from any consequences
by his mother’s return to power in 1980 and his timely
death in a plane crash in the same year.
• Trying to rehabilitate her family name, Indira Gandhi
tackles the unresolved Maruti problem.
• Eventually the ‘Maruti Scandal’ comes to a close
when in October 1980 the Government of India takes
over Maruti limited and incorporates it in February
1981 by an Act of parliament

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• (1992 -2001) Emerging international
competition following comprehensive
reforms and liberalization, conflict
between the JV partners and the
company’s first labor unrest.
• Company’s governance compromise is
for the first time seriously challenged.
• Suzuki, after a long battle for control,
finally acquires the majority in the JV.

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• Suzuki in 2002 until the present day, In the face
of loosing ground to competition and changing
ownership
• Maruti-Suzuki adopts a stronger market
orientation. Under these changes internal and
external conditions the company’s management
establishes a new governance compromise.
• The compromise is enabled by a power shift in
favor of the company’s management and is
marked by change in employee levels,
composition and compensation.

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• In MUL the control and power is mostly in the hands
of management.
• During the workers strike in 2000 the management
refused to agree to the workers demands.
• The officers ran the plant by supervising the
operations of the plant and hiring contractual labour.
• This made it difficult for workers to sustain the strike.
• They had to call off the strike and were in fact forced
them to agree to some changes laid down by the
management.

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• The power of Japanese has always been there
in an implicit manner.
• The Japanese have acted as conflict resolver
whenever there have been any conflicts within
or between departments.
• Many times the departments play politics with
other departments by trying to use the referent
power available due to closeness with Japanese
management.
• With the increase in stake of Suzuki Motor Corp.
the legitimate power of the Japanese
management has further increased.

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 MARUTI AND THE
GOVERNMENT
• The Government of India has been a
shareholder in Maruti Udyog Ltd. from the
beginning.
• Government had a majority stake in Maruti
which was reduced recently. At present its share
in Maruti is 18.28%.
• The relationship between Maruti and
government has always involved a third player,
the Suzuki Motor Corp.
• Government has never been involved in day to
day working of Maruti. But it had been involved
in the strategic decisions in the past.
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• For example introducing new models of cars
required the prior approval of Project Approval
Board which is under the Ministry of Industry.
• In 1998 the Government signed a contract
with SMC under which the appointment of
Chairman and Managing Directors would be
made only after mutual consultation.
• This was a result of a bitter quarrel between
Government and SMC regarding management
succession.

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 SUCCESS FACTORS
• Factory Lay out of MUL is similar to Suzuki
• Machinery and equipment are identical
• The organization structure and staffing are
entirely in Suzuki’s style
• Quality circles has been introduced
• The entire forces are well-informed on the
organization’s emphasis on high quality
and productivity as in Suzuki

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• Efforts are initiated to develop a sense of
commitment of the employees to work and
company goals through posters, speeches,
literature and meetings, as in Suzuki
• The feeling of oneness that “all are equal”
and equally important to the company, is
instilled through common canteen,
common uniform, common workplace,
common transport-no hierarchy anywhere.

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• People are sent to Japan to learn
the Japanese way of working
more than the technology and
the details of actual job
• Japanese experts are called to
do the actual job for long
durations (Up to 2 years) in all
the areas of work in MUL

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• The sense of job security that the workers
enjoyed at Maruti diminished. In subsequent
years a number of non-performers were
asked to opt for a “voluntary” retirement.
• The disciplinary checks in the system were
strengthened. For example, the attendance
system which was manual earlier was
changed to a more fool proof mechanism
based on swipe cards.

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• Engineers were required to acquire cross-
functional skills. A system of job rotation was
introduced were engineers were transferred
from one department to the other.
• The company started relying more on casual
(contractual) labor to decrease its costs.
• The proportion of variable performance
based pay out of the total increased
significantly

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