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Maruti

Maruti

Suzuki

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I owe a great many thanks to a great many people who helped and

supported me during the writing of this book.My deepest thanks to Lecturer, Asst. Prof.Shreeja Mam the Guide of the project for guiding and correcting various documents of mine with attention and care. I would also thank my Institution and my faculty members without whom this project would have been a distant reality. I also extend my heartfelt thanks to my family and well wishers.Chaitany JoshiM.B.E Final

Introduction.........................................................1Partner For Joint Venture...................................3Joint venture related issues...............................7Industrial Relations.........................................8Products...........................................................9Products in Detail............................................10

Competitors......................................................20

Manufacturing..................................................21Maruti Finance..................................................22

True Value.........................................................23

Exports..............................................................24

Bibliography......................................................25

Maruti Suzuki

Maruti Suzuki India Limited,a partial subsidiary ofSuzuki Motor CorporationofJapan, is India's largest passenger car company, accounting for over 45% of the domestic car market. The company offers a complete range of cars from entry levelMaruti 800andAlto, to hatchbackRitz,A star,Swift,Wagon-R,Estilloand sedansDZire,SX4and Sports Utility vehicleGrand Vitara.[3]It was the first company in India to mass-produce and sell more than a million cars. It is largely credited for having brought in an automobile revolution to India. It is the market leader in India and on 17 September 2007,Maruti Udyog Limitedwas renamedMaruti Suzuki India Limited. The company's headquarters are located inNew Delhi.

ProfileMaruti Suzuki is India and Nepal's number one leading automobile manufacturer and the market leader in the car segment, both in terms of volume of vehicles sold and revenue earned. Until recently, 18.28% of the company was owned by theIndian government, and 54.2% bySuzukiofJapan. The BJP-led government held aninitial public offeringof 25% of the company in June 2003. As of 10 May 2007, Govt. of India sold its complete share to Indian financial institutions. With this, Govt. of India no longer has stake in Maruti Udyog.

Maruti Udyog Limited (MUL)was established in February 1981, though the actual production commenced in 1983 with the Maruti 800, based on theSuzuki Altokei carwhich at the time was the only modern car available in India, its only competitors- theHindustan AmbassadorandPremier Padminiwere both around 25 years out of date at that point. Through 2004, Maruti Suzuki has produced over 5 Million vehicles. Maruti Suzukis are sold in India and various several other countries, depending upon export orders. Models similar to Maruti Suzukis (but not manufactured by Maruti Udyog) are sold bySuzuki Motor Corporationand manufactured inPakistanand otherSouth Asiancountries.

The company annually exports more than 50,000 cars and has an extremely large domestic market in India selling over 730,000 cars annually.Maruti 800, till 2004, was the India's largest selling compact car ever since it was launched in 1983. More than a million units of this car have been sold worldwide so far. Currently,Maruti Suzuki Altotops the sales charts and Maruti Suzuki Swift is the largest selling in A2 segment.

Due to the large number of Maruti 800s sold in the Indian market, the term "Maruti" is commonly used to refer to this compact car model ("Maruti" is another name of theHindugod,Hanuman).

Maruti Suzuki has been the leader of the Indian car market for over two decades.

Its manufacturing facilities are located at two facilitiesGurgaonandManesarsouth ofDelhi. Maruti Suzukis Gurgaon facility has an installed capacity of 350,000 units per annum. The Manesar facilities, launched in February 2007 comprise a vehicle assembly plant with a capacity of 100,000 units per year and a Diesel Engine plant with an annual capacity of 100,000 engines and transmissions. Manesar and Gurgaon facilities have a combined capability to produce over 700,000 units annually.

More than half the cars sold in India are Maruti Suzuki cars. The company is a subsidiary of Suzuki Motor Corporation, Japan, which owns 54.2 per cent of Maruti Suzuki. The rest is owned by public and financial institutions. It is listed on theBombay Stock ExchangeandNational Stock Exchangein India.

During 2007-08, Maruti Suzuki sold 764,842 cars, of which 53,024 were exported. In all, over six million Maruti Suzuki cars are on Indian roads since the first car was rolled out on 14 December 1983.

Maruti Suzuki offers 13 models,Maruti 800,Alto,WagonR,Estilo,A-star,Ritz,Swift,Swift DZire,SX4,Omni,Eeco,Gypsy,Grand Vitara. Swift, Swift DZire, A-star and SX4 are manufactured in Manesar, Grand Vitara is imported from Japan as a completely built unit (CBU), remaining all models are manufactured in Maruti Suzuki's Gurgaon Plant.

Suzuki Motor Corporation, the parent company, is a global leader in mini and compact cars for three decades. Suzukis technical superiority lies in its ability to pack power and performance into a compact, lightweight engine that is clean and fuel efficient.

Nearly 75,000 people are employed directly by Maruti Suzuki and its partners. It has been rated first in customer satisfaction among all car makers in India from 1999 to 2009 by J D Power Asia Pacific.

Partner for the joint ventureSanjay Gandhiowned the Maruti Technical Services Limited, which ran into trouble and was liquidated. After the death of Sanjay Gandhi, the Indira Gandhi government assigned a delegation of Indian technocrats to hunt for a collaborator for the project. Initial rounds of discussion were held with the giants of theautomobileindustry inJapanincludingToyota,NissanandHonda.Suzuki Motor Corporationwas at that time a small player in the four wheeler automobile sector and had major share in the two wheeler segment. Suzuki's bid was considered negligible.

While the major companies were personally represented in the initial rounds of discussion, Osamu Suzuki, Chairman and CEO of the company ensured that he was present in all the rounds of discussion. Osamu in an article writes that it subtly massaged their (Indian delegation's) egos and also convinced them about the sincerity of Suzuki's bid. Suzuki in return received a lot of help from the government in such matters as import clearances for manufacturing equipment (against the wishes of the Indian machine tool industry then and its own socialistic ideology), land purchase at government prices for setting up the factoryGurgaonand reduced or removal of excise tariffs. This ensured that Suzuki conscientiously nursed Maruti Suzuki through its infancy to become one of its flagship ventures.Joint venture related issuesRelationship between the Government ofIndia, under theUnited Front (India)coalition andSuzuki Motor Corporationover thejoint venturewas a point of heated debate in the Indian media till Suzuki Motor Corporation gained the controlling stake. This highly profitable joint venture that had a near monopolistic trade in the Indianautomobilemarketand the nature of the partnership built up till then was the underlying reason for most issues. The success of the joint venture led Suzuki to increase its equity from 26% to 40% in 1987, and further to 50% in 1992. In 1982 both the venture partners had entered into an agreement to nominate their candidate for the post of Managing Director and every Managing Director will have a tenure of five years[7]Initially R.C.Bhargava, was the managing director of the company since the inception of the joint venture. Till today he is regarded as instrumental for the success of Maruti Suzuki. Joining in 1982 he held several key positions in the company before heading the company as Managing Director. Currently he is on the Board of Directors.[8]After completing his five year tenure, Mr. Bhargava later assumed the office of Part-Time Chairman. The Government nominated Mr. S.S.L.N. Bhaskarudu as the Managing Director on 27 August 1997. Mr. Bhaskarudu had joined Maruti Suzuki in 1983 after spending 21 years in the Public sector undertaking Bharat Heavy Electricals Limited as General Manager. Later in 1987 he was promoted as Chief General Manager, 1988 as Director, Productions and Projects, 1989 Director, Materials and in 1993 as Joint Managing Director.

Suzuki Motor Corporationdidn't attend the Annual General Meeting of the Board with the reason of it being called on a short notice.[9]Later Suzuki Motor Corporation went on record to state that Mr. Bhaskarudu was "incompetent" and wanted someone else. However, the Ministry of Industries,Governmentof India refuted the charges. Media stated from the Maruti Suzuki sources that Bhaskarudu was interested to indigenise most of components for the models including gear boxes especially forMaruti 800. Suzuki also felt that Bhaskarudu was a proxy for the Government and would not let it increase its stake in the venture.[10]If Maruti Suzuki would have been able to indigenise gear boxes then Maruti Suzuki would have been able to manufacture all the models without the technical assistance from Suzuki. Till today the issue of localization of gear boxes is highlighted in the press.[11]The relation strained when Suzuki Motor Corporation moved to