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Growth Path for Maruti Suzuki India -

Addressing current challenges and capitalizing on opportunities

ECO 701 Data Analysis for Managers

Group 28

1. Vinay Morje
2. Sathishkumar Ramasamy,
3. Roshni Shankar
4. Riswana Shahul
5. Arnab Kumar Nath

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Maruti Suzuki India – current challnges

Indian passenger car market has grown by 15%
MS% - Leading Players
2008-09 vs 2012-13 CAGR during 2008-09 and 2012-13.
50
45
47
39
MSIL enjoys a dominant share in Indian passenger car
40
35
30
market. However, there has been a sluggish growth of
25
20
15
16 14 15 12 12 13
17 MSIL during this period (CAGR 10%).
10 7 6
3
MSIL has lost overall share from 47% to 39% during
5
0

SI
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this period. Although Hyundai and Tata Motors have
d or ah or
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o ta an ar
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of MSIL.
yun ah aK
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oyo
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2008/09 2012/13 MSIL MS% across categories

73% 75%
MSIL has lost overall share from 47% to 39% during 67%
63%
this period. Although Hyundai and Tata Motors have 61%
56% 54%
lost share to some extent, the loss is profound in case 47% 45% 45%
48% 50%
48%

of MSIL. 38% 39%

36%
31% 33% 32%
26%
The decline in market share is profound in A-segment
(61% to 50%) 15%

4% 2% 2% 2%
2008/09 2009/10 2010/11 2011/12 2012/13
MSIL Market Share%

A-segment total Sedan SUV/MUV Van Overall MS%

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Segment wise contribution

INDIA - segment wise contribution MSIL - segment wise contribution

Segment Segment
2008/09 2012/13 2008/09 2012/13
A-segment A-segment
59% 51% 78% 65%
total total

Sedan 16% 18% Sedan 11% 17%

SUV/MUV 13% 20% SUV/MUV 1% 8%

Van 7% 9% Van 11% 11%

A-segment contributes significantly to the total passenger car market, India.

There is sign of consolidation for Sedan and SUV/MUV for India car market.
% Contribution of A-Segment has declined for the overall car market.
MSIL has high dependence on A-segment. However, the contribution% of A-
segment cars has significantly gone down for MSIL.

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 A-Segment : MSIL sales trend MSIL A-Segment MS%
4

FY 2008-09 to FY 2012-13
300%

61%

A-segment contributes significantly to the total

250%
56%
54%
200%
86%
68%
48% 50% passenger car market, India.
48%
150%
44% 46% MSIL has high dependence on A-segment. However,
38%
100%
38% 40%
34% 38%
the contribution% of A-segment cars has significantly
89%
79% 78%
68% 65%
gone down for MSIL. Although MSIL has consolidated
50%
in Sedan and SUV/MUV category, the company could
0%
not hold its position in A-segment.
2008/09 2009/10 2010/11 2011/12 2012/13
MSIL Market Share%

Entry-hatch Mid-hatch Premium hatch A-segment total

Segment INDIA CAR SALES UNITS ('000) Segment MSIL CAR SALES UNITS ('000)
2008/09 2009/10 2010/11 2011/12 2012/13 CAGR 2008/09 2009/10 2010/11 2011/12 2012/13 CAGR
Entry-
Entry-hatch 295 341 478 487 435 10% 262 268 373 332 285 2%
hatch
Mid-hatch 498 581 629 527 415 -4% Mid-hatch 189 219 252 177 156 -5%
Premium Premium
128 263 439 500 532 43% 110 179 210 218 244 22%
hatch hatch
A-
A-segment
920 1185 1546 1514 1382 segment 561 666 835 727 685
total 11% 5%
total

While total car market of India in A Segment has exhibited 11% CAGR during 2008-09 and 4
2012-13, MSIL has recorded just 5% CAGR during this period
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 Key Findings : MSI - A Segment 5

• A Segment cars contribute 51% to the total passenger car market

while MSI has 65% stake in this segment
• A –Segment cars have been driving the growth of passenger car
market (11% CAGR)
• MSI has recorded sluggish growth of 5% in A-segment.
• MSI has lost significant market share in this segment (61% to
50%). The decline of MS% is profound in entry level and premium
hatch cars
• There is sign of consolidation in premium hatch segment for MSI
(22% CAGR), however, the firm could not capitalize on tremendous
market opportunity in this segment (43% CAGR)

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 Competitive advantage of MSI: 6

MSIL’s competitive advantage in the A segment:

• Low overall cost of ownership – Achieved due to reducing product cost through localization
• Depth of MSIL’s distribution channel – Sales and Service network
• Research and Development center in India (and the other one in Japan) due to which they had access to Japanese Technical Support and
the autonomy to design and develop new products based on local needs.
• A Segment cars had excellent mileage (to cater to first time cost-conscious buyers)
Competitors:
• Hyundai –
• Established products like Verna in the premium car segment.
• This helped in building the brand image.
• The Eon, i10 and i20 were positioned to cater to the Indian consumer requirements.

• Tata –
• Had a good presence in the transport vehicle segment.
• Used the dealer and service network for the consumer segment.
Indica was an indigenously designed car, sturdy and economical.
MSIL has lost its competitive advantage temporarily to these competitors.
Strategic focus to A category segment by focusing on innovation, style and offering the cars at a better price point can help MSI to
gain a competitive advantage.

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 Broad strategic objective MSI
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MSI has been losing its share year on year. Overall MS% has declined to 39% in 2012/23
from 47% in 2008/09.
The decline is more profound in A-category where MSI has lost share from 61% to 50%
during this period.
While the overall market has grown by 15% CAGR, MSI has recorded just 10% CAGR.
The market growth has been primarily driven by SUV/Sedan category, where MSI does not
have much competitive advantage.
A-category segment, the biggest contributor for MSI has just grown by 5% CAGR.
MSI should focus on regaining MS% in A-category segment

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 Future growth strategy MSI
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• MSIL has reasonably good dependence on

premium hatch ( 35% of total A segment).
Industry growth in A segment is mainly
driven by Premium hatch ( 40% CAGR
(2008/09 – 2012/13). MSIL has also
recorded sign of consolidation in this area.
However, MSIL is yet to capitalise on
market opportunities in premium hatch.
MSIL CAGR – 22% in premium hatch
(2008/09 – 2012/13)

BCG analysis shows that MSIL has already few premium

hatch cars in this segment and they belong to Star
quadrant (high growth high MS%) (Ex: 12).MSIL can
further consolidate its presence in this area

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 Future growth strategy MSI
Perception analysis of A segment cars of MSIL shows
that MSIL premium cars score over industry average
as a choice for first vehicle. (Ex 10)
Unlike entry/ mid level hatch cars, premium hatch
enjoys better profit margin. This can create a
differentiator for MSIL that the company can capitalise
in fuelling growth. In fact, in future MSIL can use this
platform to consolidate its presence in Sedan. Ex 13
MSIL has a reasonable good sales contribution( 70%)
in top 50 cities, attractive market for Premium hatch .
Ex 9
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MSI should focus on premium hatch considering
market attractiveness, future growth potential
and profitability.
Limitation:
Premium hatch is mostly sold in top 50 cities
where MSIL does not have competitive
advantage over competitors ( Hyndai, Tata )
Product development cost is relatively higher
compared to entry/ mid hatch
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 Positioning strategy MSI – Premium Hatch Car
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While MSI should continue to sell entry and mid hatch

cars by capitalising on “ value for money”, “ service”,
fuel economy and Maruti trust, the cpmpany should Positioning statement:
change the positioning strategy for permium hatch
cars. Car that offers unique
experience with respect to
Target audience: Young buyers ( avg age 34 yrs) who technological advancement,
loves technology and innovation, who are looking for style and performance.
stylish, convenient and efficient cars

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THANK YOU

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