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