final B2b project

8/7/2019 final B2b project

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REPORT ON MARUTI SUZUKI

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IILM INSTITUTE FOR HIGHER EDUCATION

EXECUTIVE SUMMARY

The automobile market is very wide and too the competition. As one of the fastest growing sector

globally with the increase by 26% compare to previous sales, Maruti Suzuki capture 45% of domestic

car market.

Maruti Suzuki has been one of the renowned names in the automobile sector. Maruti Suzuki has come

up with various models with their pricing factor, so it opens option for various people according to their

spending ability. The aim of our project was to find out methods they are using for their business sales

and source of income. Apart from that how they segmenting their customer base and sales pattern, what

trends are followed?

The report has been prepared after screening out the available data through secondary sources as well as

the emphasis was given on the primary sources where we have asked the manager of the showroom to

give details about how their working environment, convert sales and other things that leads to Maruti as

most preferable for customer.


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INDUSTRY ANALYSIS

Indian Automotive Industry is vibrant and upcoming with global standards of quality, commitment todelivery and internationally competitive prices. India is the right destination for outsourcing of Auto

components. Past few years have seen quantum leap in the Indian Automotive manufacturing sector.

Although figures at the close of the year 2005 are not available with me, as yet, but, based on SIAM(Society forIndian Automobile Manufacturers) indicators, the year is expected to close with.TYPE OF VEHICLE MFG. IN 2005

(MILLION)____________

PASSENGERCARS 1.70COMMERCIAL VEHICLES 0.30

LIGHT COMMERCIAL VEHICLES 0.20THREE WHEELERS 0.50

TWO WHEELERS 9.00

India is the 4th largest car market in Asia (after Japan, Korea & China. For commercial vehicles, it holds5th spot in the world. Whereas, for 2-wheelers,India is the second largest market, next only to China,

with both countries accounting of over 50% of global two wheeler production and sales. The Tractorsegment is also making steady progress in India.

GROSS TUNROVER OF THE AUTOMOBILE INDUSTRY IN INDIAYear (IN USD MILLION)2004-05 20,8962005-06 27,011

2006-07 34,2852007-08 36,612

2008-09 38,238It may be the favorite whipping boy of environmental lobbies, but the automobile industry is

increasingly taking steps to cut down energy consumption and reduce load of greenhouse gases likeCO2 while producing vehicles in order to fall in line with principles of sustainable development.

With a target of achieving the best possible manufacturing methods, leading companies like Maruti, Tata

Motors, Honda and Hero Honda have been taking steps to make manufacturing processes clean andlean. Importantly, the cut in energy usage comes even as these companies increase production capacity

manifold.

Maruti, the countrys biggest car manufacturer, has achieved sizeable reduction in energy and water

consumption as part of its green initiatives campaign. Energy consumption at its facilities during 2007-08 was lower by 26% as compared to energy consumption levels at the beginning of the decade. Maruti,that has factories at Gurgaon and Manesar in Haryana, has reduced usage of power and water just when

its production capacity is fast moving towards the one million mark.

To achieve ambitious performance target, the Indian Auto Components Industry is creating strongfoundations in operational performance to meet global bench marks on cost, delivery, quality, customer

satisfaction, instilling continuous improvement capabilities in technology &productivity, up gradation of


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research capabilities, building a large capability of brain power, a large outlay in using IT, CAD andupgraded Tool Room capabilities. All this is being done in close co-operation with the Govt.,

Technologically advanced customers, outsourced technology partners, Research Organizations, in-housecapabilities, and support from UNIDO and ACMA.

GROWTH DRIVERS OF INDIAN AUTOMOBILE MARKET

y Rising industrial and agricultural output

y Rising per capita income

y Favourable demographic distribution with rising working population & middle classUrbanization.

y Increasing disposable incomes in rural agri-sector

y Availability of a variety of vehicle models meeting diverse needs and preferences

y Greater affordability of vehicles

y Easy finance schemes

y Favourable government policies

y

Robust production

COMPETITIONAccording the History of Automobile Industry US, dominated the automobile markets around the

globe with no notable competitors. However, after the end of the Second World War in 1945, theAutomobile Industry of other technologically advanced nations such as Japan and certain European

nations gained momentum and within a very short period, beginning in the early 1980s, the U.SAutomobile Industry was flooded with foreign automobile companies, especially those of Japan and

Germany.

The current trends of the Global Automobile Industry reveal that in the developed countries the

Automobile Industries are stagnating as a result of the drooping whereas car markets the AutomobileIndustry in the developing nations, such as, India and Brazil, have been consistently registering highergrowth rates every passing year for their flourishing domestic automobile markets.

DOMESTIC SALES

y Passenger Vehicles segment in 2010 (April-August), grew at 33.88 percent over same period lastyear. Passenger cars grew by 34.32 percent, utility vehicles grew by 22.56 percent and multipurpose vehicles grew by 50.68 percent in April-August 2010 over same period last year.

y The overall domestic sale of commercial vehicles segment registered growth of 44.75 percent in2010 (April-August) as compared to the same period last year. Medium & Heavy CommercialVehicles (M&HCVs) registered growth at 65.91 percent and Light Commercial Vehicles (LCVs)

grew at 29.68 percent.

y During 2010 (April-August), three wheelers sales recorded a growth rate of 20.15 percent. Whilepassenger carriers grew by 23.84 percent and goods carriers grew at 5.46 percent in this period.

y Two wheelers registered a growth rate of 27.22 percent in 2010 (April-August). Scooters,mopeds and motorcycles grew by 44.45 percent, 24.18 percent and 24.41 percent respectively.


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MAJOR AUTOMOTIVE PLAYERS IN INDIA

Companies Segments

AshokLeyland LCVs, M&HCVs, buses

Asian Motor Works M & HCVs

Bajaj Auto Two and three wheelers

BMW India Cars and MUVs

DaimlerChryslerIndia Cars

Eicher Motors LCVs, M & HCVs

Fiat India Cars

Force Motors MUVs and LCVs

FordIndia

Cars and MUVs

General Motors India Cars & MUVs

Hero Honda Motors Two wheelers

Hindustan Motors Cars, MUVs and LCVs

Honda Two wheelers, cars and MUVs

Hyundai Motors Cars and MUVs

Kinetic Motor Two wheelers

Mahindra & Mahindra Three wheelers, cars, MUVs, LCVs

Maruti Suzuki Cars, MUVs, MPVs

Piaggio Three wheelers, LCVs

Royal Enfield Motors Two wheelers

Skoda Auto India Cars

Suzuki Motorcycles Two wheelers

Swaraj Mazda Ltd LCVs, M & HCVSs, buses

Tata Motors Cars MUVs, LCVs, M&HCVs, buses

Toyota Kirloskar Cars, MUVs

TVS MotorCo Two wheelers

Volvo India M & HCVs, buses

Volkswagen India Cars

Yamaha MotorIndia Two wheelers


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COMPANY PROFILE

Maruti Suzuki is Indias number one leading automobile manufacturer and the market leader in the car

segment both in terms of volume of vehicle and revenue earned. Until recently 18.28% of the company

was owned by the Indian government and 54.2% by the Suzuki of Japan. The Indian Govt. held an

initial public offering of 25% of the company in June 2003. As of 10 May 2007 government of India

sold its complete share to Indian financial Institution. With this govt. OfIndia has no longer stake in

Maruti Udyog.

Maruti Udyog Limited (MUL) was established in February 1981, though the actual production was

started in 1983 with the Maruti 800 based on the Suzuki Alto Kei Car which at that time was the only

modern car available in India. Its only competitor was Hindustan Motors Ambassador and the Premier

Padmini were both around 25 years out of date at that point.Through 2004 , Maruti Suzuki had

produced over 5 Million vehicles. Maruti Suzuki is sold in India and various several other countries

depending upon export orders. Models similar to Maruti Suzuki (but not manufactured by Maruti udyog)

are sold by Suzuki Motors corporation and manufactured in Pakistan and other south Asian countries.

The company annually exports more than 50,000 cars and has an extremely large domestic market in

India selling over 7, 30,000 cars annually. Maruti 800 till 2004 was the Indias largest selling compact

car ever since it was launched in 1983. More than a Million unit of this car have been sold worldwide so

far. Currently Maruti Suzuki Alto tops the sales chart and Maruti Suzuki Swift is the largest selling car

in A2 segment. Due to large number of Maruti 800s sold in the Indian market the term Maruti is

commonly used to refer to this compact car model. Till recently the term Maruti in popular Indian

culture in India, Hindus lord Hanuman is known as Maruti was associated with Maruti 800 model.

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

Its manufacturing facilities are located at two facilities Gurgaon and Manesar south of Delhi. 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


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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.

Apart from sales and service network, it is cost of ownership that makes Maruti a successful

leader.

More than half the cars sold in India are Maruti Suzuki cars. The company is a subsidiary of Suzuki

MotorCorporation, Japan, which owns 54.2 per cent of Maruti Suzuki. The rest is owned by public and

financial institutions. It is listed on the Bombay Stock Exchange and National Stock Exchange in 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.

PRODUCT OFFERED

Maruti Suzuki offers 15 models, Maruti 800, Alto, WagonR, Estilo, A-star, Ritz, Swift, Swift

DZire, SX4, Omni, Eeco, Gypsy, and 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 MotorCorporation, 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

COMPANY VISIONThe leader in the automobile industry, creating customer delight and shareholder wealth; A

pride of India.

Their core values lies in:

y Customer obsession

y Fast, flexible & first mover

y

Innovation & creativity

y Networking & partnership

y Openness & learning


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Advertisement:

Maruti Suzuki has had several memorable advertising campaigns. Maruti has always tried to bindemotional relation with people and their commercials always convey an emotional message to the

customer. They made a slogan Count on us

Maruti 800 one of the popular campaign says it is a middle class family car that fits to their small budgetand its tag line itself justify it Change your life .Another successful campaign has been the Petrol khatam he NHI hunda made for Alto. It has very

subtle way of telling the people. The advertisement was where a Punjabi family with small son playingwith Maruti toy and car was covering huge distance without adding more fuel to it. In this commercialthrough emotion they tried to show mileage factor of car. This way they have targeted the segment of

market.

Distribution Network:

Maruti Suzuki India is currently focusing its distribution network to setup stock patio in different parts

of the country to reduce delivery time to customers, while it looks to boost its sales force. Maruti Suzuki

has two state-of-the-art manufacturing facilities in India. Both manufacturing facilities have a combined

production capacity of 1,000,000 vehicles annually.

Maruti has around 15000 dealers who are catered to by the sales executives. The orders are collected bythe sales executives and passed on to the nearest depot. The depots are fed by regional warehouses.

These depots maintain a minimum order quantity which is arrived at from the monthly demand forecast.The material is dispatched from the depot in the name of the dealer. Generally some orders of the same

region are clubbed together and dispatched in trucks. Finally the truck is unloaded and the small ordersof the dealers are dispatched to them. The sales executives are also responsible for the collection of

outstanding.

Promotion:

The company has been concentrating more on sales promotion than on advertising. Sales promotion can

broadly be divided into two categories:

1. Scratch cards that are provided with every model. There are a number of gifts and schemes onthe larger packs. Coupons and free gifts are offered on packs of more than 10 kgs. The company

also offers a large number of services to the customers to assist them in their buying decisions.These services are offered on the companys website to make it accessible to a very wide range

of customers.2. As part of the companys policy, huge emphasis is given on trade promotion. The dealers and

contractors who are a part of the distribution chain are given special attention. The most popularschemes include cash discounts, foreign trips, gifts such as refrigerators etc for dealers who

succeed in meeting or exceeding pre-determined sales targets. The company also organizesregional dealer meets regularly.


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SWOT OF THE COMPANY

Maruti ranked highest in customer satisfaction with after-sales service. It is known for true value,

driving school, authorized service station, insurance (2002), genuine assessories.

STRENGTHS:

y Distributor network, brand loyalty, Japan technology and Service distribution

y After sales service

y Cost-effective

y Low maintenance, low price

y High fuel efficiency

y Their customer base, market share & reliability.

WEAKNESSES

y Low Resale value

y Low engine capacity

y Their brand building. They have built an image from 1983/84 that they provide cheapest,

affordable cars in India. So it has become a low cost model. Wonder why SX4 & Vitaras are not

selling?? Ask this question to yourself. If you have 300 Rupees budget for a pen, will you buy a

Reynolds or a Parker? Maruti is like Reynolds!

OPPORTUNITY

y High end car segment

y Overseas market

y

Improve handling

y Add extra features to small segment cars

y Attracting youth

y Export small cars

y Infrastructure, network, past performance.

THREATS

y Fuel price

y Global manufacturer's presence in India.

y

Price high of raw materialy Small car competition

y Ever changing customer's taste, purchasing power


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GOING TO MARKET: MANAGING THE SALES FORCEAs part of our project work we have visited 2 showrooms in NCR region. One is situated in Gurgaonand other in Faridabad.

Showroom Address:

Gurgaon: Maruti Suzuki ShowroomBusiness Tower, opposite to Audi showroom

Sector 54, Gurgaon (Haryana)

Faridabad: TCS Maruti, NearNeelam cinema NIT , Faridabad ( Haryana)

SALES HIREARCHY OF THE SHOWROOM

FINDINGS:

We found that the hierarchy was same in both the showroom, but in Faridabad there are few things

which in found quite interesting. Which is explained given below:

Sales Force Structure: (Gurgaon)

y General Manager 1

y Sales Manager 2

y Assistant Sales- 4

y Team Leader 4

y Team Capitan 6

y Sales Executive 8

General Manager

Sales Manger

Assistant Sales Manager

Team Leader

Team Captain

Sales Executive


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While In Faridabad there are more no of team leader. Rest of the process of sales force

structure is similar to Gurgaon one. . This depend how big the showroom is.

y General Manager 1

y Sales Manager 2

y

Assistant Sales- 6

y Team Capitan 8

y Sales Executive 10

COMPENSATION

Compensation is such a matter that been decided by the company and circulated and followed by all

showrooms. By asking we got to know some facts like:

y General Manager decided by the company

y

Sales Manager - 20-25 thousand

y Assistant Sales 15-18 thousand

y Team Leader 9-12 thousand

y Team Capitan 6-10 thousand

y Sales Executive 5-8 thousand

Being Salary wassame in both theshowroom, there wasslight different in the payment of captain and

executive i.e. they were paid low as compared to Gurgaon.

INCENTIVES:

All incentives have been decided by company only.

If a sales person achieves85% of total target then he/she gets an incentive of Rs.700.

If a sales person achieves85% of total target then he/she gets an incentive of Rs. 1000.

If a sales person sales more than 8 cars then he gets an incentive of Rs. 1000.

Spot incentive- In this case Rs. 500 has been given to thoseemployees who are able to sell an

old stock.

They arecommitted to perform these activities:

y Have to establish long term relationship with customer.

y Give information about promotional offers and other offers to existing customer.

y Try to sell old stock.

y Giverelative information to all those customers who visit theshow room.

y Need to sell car insurance and additional automobile parts like music system, seat cover, etc

also.


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Few thing which find in Faridabad showroom was :

They were having a systematic plan. When you enter in showroom there is a reception. You hate

registered yourself their, will be asking you your name, address, phone number, purpose. After that

she call for theexecutive they have a complete detail which executive is busy and which is free. This is

to avoid the unconvinced faced by costumer in searching for theexecutive.

TRAINING& DEVELOPMENT

y Annual Training Plan - All Levels

y Training customized to meet Organisational Objectives

y Topics selected based on Vision, Values & Departmental, Feedback ofCompany-wide Managers

y Competency Mapping to identify Individual Training Needs

y

Technical Training on latest Technologies abroad at SMC

, Japany STRONG FOCUS ON TRAINING INITIATIVES

- Build a Learning Organisation

- Continuous Value Additions to Professional Skills

- Customised Training

- Training to the personnel of Business Partners

OVERSEAS TRAINING

Training held in co-ordination with SMC, Japan and AOTS (Assoc. for Overseas Tech.Scholarship)(covered 1600 employees under the various schemes)

y 6 months SMC Training for Technicians - OJT in SMC, Japan (2 batches/yr of 50 each)

y 9 months Javada Training for Press, Tool & Die Specialists - Design & Maintenance

y AOTS Managerial Training (4-10weeks) for Manager & above - Managerial Best Practices

y AOTS Technical Training (3.5 to 6 months) for Supervisors & above - Technological Knowhow

y R & D Training (2 yrs.) - Research on new Technologies

APPRAISAL & REWARD

Appraisal is the essential function to motivate their employees followed by every Maruti showroom and

company. It is based on KRAs & targets.

While reward is given on the basis of performance, their productivity & Profit-linked Incentive Schemes


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SWOT OF THE AUTOMOBILE INDUSTRY

STRENGTHS:-

- It is globally cost competitive- Adheres to strict quality controls

- Has access to latest technology.

OPPORTUNITIES:-- May serve as sourcing hub for global automobile majors.

- Significant export opportunities may be realized through diversification of export basket.

WEAKNESS- Industry by and large (baring a few dynamic examples) have low research and development capability,

but, over coming it very fast.- Industry is exposed to cyclical downturns in the automotive industry.

- Most component companies are dependent on global majors for technology.

THREATS- Pressure on prices from OEMs continues:

- Imports from FTA Regime Countries, in certain component segments are a threat to local industry.- Smaller players who do not upgrade to global standards would get extinct.

FUTURE HOLD OF AUTOMOTIVE INDUSTRY

The automotive industry is one of the largest and most multinational of all industries. It is a key

indicator of economic growth and a major contributor to the gross domestic product (GDP) of severalMember States and the EU. On a global level, the assets of the top ten multinational automotive

enterprises represent 28% of the assets of the worlds top 50 companies, 29% of their employment and30% of their total sales.

To accelerate and sustain growth in the automotive sector, Automotive Mission Plan (AMP) 2006-2016

has been prepared in order to make India a global automotive hub. The Automotive Mission Plan (AMP)2006-2016, aims at doubling the contribution of automotive sector in GDP by taking the turnover to

USD 145 billion and providing additional employment to 25 million people by 2016 with specialemphasis on export of small cars, MUVs, two and three wheelers and auto components.

In recent times, this industry has been gaining more attention from car manufacturers. An averageautomobile manufacturing company spends thousands of dollars on electronic devices for every vehicle.

Increase in using electronic devices in automobiles is reflected in the form of entertainment systems,security features and safety devices.

As prices of fuel have increased, there is an increasing need to switch on alternate sources of fuel. Water

is one best source of energy. Researchers have proved that water can run cars. Scientists also claim thatenergy extracted from water can be used instead of fuel. Water mixed with normal gasoline is another

alternate solution. Automobile industry is trying hard to discover other technologies for reducing allthese costs.


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CONCLUSION


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