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1 MARUTI SUZUKI INDIA LIMITED CORPORATE PRESENTATION 10 th CLSA India Forum 15th October 2007
Transcript

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1

MARUTI SUZUKI INDIA LIMITED

CORPORATE PRESENTATION

10th CLSA India Forum

15th October 2007

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2

Safe Harbour 

This presentation might contain forward lookingstatements which involve a number of risks, uncertainties

and other factors that could cause the actual results to

differ materially from those in the forward looking

statements. Maruti undertakes no obligation to update

these to reflect the events or circumstances thereof.

This presentation also contains reference to the findings of 

various reports available in the public domain. Maruti

takes no responsibility as to their accuracy or that thecompany subscribes to those findings.

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Indian Auto Industry: An Overview

Domestic sales of over 1.2 million passenger cars in FY¶07

(5 Yrs CAGR of over 15%)

Liberalized regime

Almost all major international auto companies present

Car Market composition

Predominantly a compact car market (A1 + A2 ~ 70%)

Rest of the market is fragmented

Low Car Penetration

8 cars per 1000 Population

Industry Capacity building up to 4.25 Mn units by 2010-11

(Source: NCAER, Industry research & announcements by auto companies)

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Economy

7.6% GDP CAGR in past 5 yrs -

9.2 % GDP growth for 2006-07 -

Increasing role of Tertiary & Secondary Sector -

Duty Structure

- Reduction in Excise Duties from 40% to

24% (16% for compact car)

- Reduction in import duty on Auto

components

Product Availability

Number of basic models increased ± 

from 17 in 1999 to 40+ in 2006

Infrastructure

Rising Middle Class

Families above Rs 200K to grow from 5% to

19% by 2015-

Multi Earner Families -

42% population below 20yrs ± 

Only 7% above 60 yrs -

Finance

- Fall in rates from 26% to ~11% in last

10 yrs

- Increase in Finance availability

- Reach to smaller towns

�Rs 500 Billion for Golden QuadrilateralNorth East South West corridor 

�Rs. 900 Billion for widening of Nationalhighways

�Rs 300 Billion for city roads

Growth Drivers

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MARUTI SUZUK I INDIA : A Preview

Estd. in 1981 - JV between Suzuki Motors & Govt. of India

Currently Suzuki ± 54.2%; Free float ± over 45%

Largest passenger car Company in India since last two decades

Captures over half of Indian car market

Produced more than 6.6 million cars in India

11 Models in more than 150 variants

Turnover of $ 3.37 Bn with ~ 6700 employees

Strong Vendor base

High Localization levels

Suzuki¶s largest manufacturing facility outside Japan

3plants in Gurgaon and 1 plant in Manesar (in Haryana near Delhi)

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Domestic Car Market

Sales Units FY¶07(Vol ¶000)

FY¶06(Vol ¶000)

Change (%)

Maruti 632 522 21%

Industry 1,159 948 22%

*Source: SIAM, Passenger cars and Van Type Vehicles

Sales Units H1 (FY08)

(Vol ¶000)

H1 (FY07)

(Vol ¶000)

Change (%)

Maruti 335 285 18%

Industry 614 541 14%

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Evolution of Indian Industry

-

200,000

400,000

600,000

800,000

1,000,000

1,200,000

1,400,000

1970-71 1975-76 1980-81 1985-86 1990-91 1995-96 2000-01 2005-06

Volu

mes

MARUTI

OTHERS

Maruti instrumental in the Growth of Indian Passenger Car 

Industry

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22 %

7% 6%

49 %

56%

60 %

65% 65%

17%19% 20 %

17% 18%

3% 4% 3%

8% 7% 7%

9%13%

4%4%

7%7%

0%

10%

20%

30%

40%

50%

60%

70%

2003 04 2004 05 2005 06 2006 07 H12007 08

SegmentShare

inTotalIndustryS

ales

A1 A2 A3 A4-A6 C  

Compact cars - A1 and A2 have major contribution in total car sales in India.

Share of Segment in the Industry

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Market Share over the years

9

3

3

9

93

2003-04

2004-05

2005-06

2006-07

H1 2007-08

Maruti yundai Tata onda

(In %)

More than Half of Market share from past 20 years since 1986-87

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Financials:Trend over the years

1,050

1,460

5,420

8,540

11,891

15,620

19,

322

90,630

110,200132,910

147,043

171,442

198,480

90,810

0

5000

10000

15000

20000

25000

2001

-02

2002

-03

2003

-04

2004

-05

2005

-06

2006

-07

2007

-08*

Rs Millions

0

50000

100000

150000

200000

250000

Rs Millions

PAT Turnover  

* H1 extrapolated for FY¶08 (no guidance intended)

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Business Performance

8.2%

10.1%

15.2%

2.1%

6.0%

7.8%

9.9%10.7%

17.7%

16.6%17.1%

1.5%0.0%

4.0%

8.0%

12.0%

16.0%

2001-02 2002-03 2003-04 2004-05 2005-06 2006-07

EBITDA PAT

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Financial Performance FY¶07

Rs. Million FY¶07 FY¶06 Growth

Net Sales (Rs Mn) 145,922 120,034 21.6%

PBT (Rs Mn) 22,798 17,500 30.3%

PBT Margin 15.6% 14.6% 100 bps

Avg. Net Worth (Rs Mn) 62,291 49,157 26.7%

ROCE 35.3% 34.7% 60 bps

PAT (Rs Mn) 15,260 11,891 31.4%

EPS (Rs) 54.1 41.2 31.3%

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Key Financial Ratios

Particulars H1 FY¶08 H1 FY¶07 Increase (%)

Average Net Worth (Rs Mn) 73,369 58,209 26.0

ROCE 35.6% 36.4 % (0.8)%

Material cost to Net Sales 76.1 % 75.5% 0.6%

Employee cost to Net Sales 2.0 % 2.1% (0.1)%

Manufacturing & Admin

Expenses to Net Sales 5.5% 5.3% 0.2%

Selling and Distribution Expenses

to Net Sales 2.9%3.4% (0.5)%

EPS (Annualized) in Rs/share 66.8 51.0 31%

EBDITA / Net Sales 18.76% 18.38% 0.38%

PBT / Net Sales 16.40% 16.38% 0.02%

PAT/ Net Sales 11.44% 11.31% 0.13%

H1 (FY¶08) vs H1 (FY¶07)

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Our Strengths

1. Superior value proposition

Cost of Ownership

Higher Residual value and easier disposal of vehicles

2. Largest Distribution and Service Network in India

400 showrooms covering 229 cities

150 rural format sales outlets in 143 cities

620 dealer service stations &1900 Maruti Authorized Service Stations

Over 1190 cities covered by Service Network 

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3. Dealer confidence in MUL business model

Majority of new showrooms & workshops coming from existing

dealers

4. Strong Product Portfolio

Widest product range in India

Majority of new showrooms & workshops coming from existing dealers

Present in Gasoline, Diesel and LPG

6 models launched in last 30 months

Our Strengths

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5. Decentralized Operations for focused approach

Divided the country into 4 Zones >>16 Regional Offices & 15 Area offices

Zone to be headed by a Commercial Biz Head (CBH)

6. Initiatives for market expansion

Tapping the Huge 2-wheeler owners

Special Schemes Targeting select group/profession

Repositioned Alto as an entry level Alternative

Finance availability in remote locations through Regional RuralBanks

Our Strengths

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100100100100100110

21

5

48

82

Plant Manpower Hrs/Veh Inhouse Warranty Inhouse Rejection Direct Pass

Indexed to F

Y'02

2001-02 2006-07

Our Strengths

(2) In Materials Engineering

90.8% in FY¶01 75.7% in FY¶07

7. Productivity and Cost efficiency

(1) In Manufacturing Operations

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Pre-owned cars initiative ± over 240 outlets in 150 cities;

Maruti playing the role of an aggregator 

Maruti-SBI alliance ± Strategy to expand the market

Hassle Free Insurance- Penetration over 85%

Extended warranty- Penetration of ~50%

Maruti Driving School ± Already 18500 drivers trained

AutoCard - Loyalty card to over tap 5 million customers

8. Life Cycle Association

Our Strengths

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Turning a New Leaf 

Launched µSWI

FT¶ in May 2005

Simultaneous launches across the globe

New European Styling

Significant role by Indian R&D

Launched µSX4¶ in May 2007

The bold new car in A3 segment

Change from a Compact Car 

to

a Complete Car Manufacturer 

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Our Expansion

Investment of $ 2.25 Bn by FY 2010

Manesar ($ 625 Mn) to increase capacity to 300K cars

Diesel Engine Plant ($ 625 Mn) to increase capacity to 300K 

units

Setting up New Engine Plant & Gurgaon facilities upgradation

($ 1,000 Mn)

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RecognitionJ D Power Customer Satisfaction #1 Eight times in a row

J D Power Sales Satisfaction #1 for 3 consecutive years 2003-04, 2004-05 and

2005-06

J D Power APEAL study 2006 - #1 in compact (WagonR) and entry mid-sized

segments (Esteem), since last 3 years

TNS Total Customer Satisfaction #1 in four segments

Forbes magazine report on world¶s Most Reputed companies ranks Maruti at #5

among all automobile companies in the World.

The Nikkei Monozukuri Award 2007 to Manesar plant for best overseas plant by

any Japanese company.

Golden Peacock Award for excellence in Environment Management in

Manufacturing Sector 

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Looking Forward

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Suzuki¶s Global Plans

Compact car to complete car manufacturer 

European styling

World strategic models

5th World strategic model from India

1/3 global Suzuki sales from India (Maruti) by 2009

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Announcements by Osamu Suzuki

Greater role of Indian managers in steering the company

New R&D facilities of the same level as Suzuki Japan

Additional Investments

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Additional Investments

R&D

Design and development capability

Test Course and other facilities

Marketing & Customer Interface

Display areas for cars

Regional vehicle stock yards

Spares depots

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Open HouseOpen House

www.marutisuzuki.com


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