Study of Maruti Suzuki Alto

SDM INSTITUTE FOR MANAGEMENT DEVELOPMENT| STUDY OF MARUTI SUZUKI ALTO SDM IMD| REPORT SUBMITTED IN PARTIAL FULFILLMENT OF THE REQUIREMENTS FOR THE AWARD OF POST GRADUATE DIPLOMA IN MANAGEMENT| | | Submitted to, Dr. H GAYATHRI Submitted by, Anuja Rani (12128) Harish K P (12140) Namratha Subramani (12152) Roshan V Shetty (12158) Sriharsha V (12170) Contents ACKNOWLEDGEMENT3 INDIAN AUTOMOBILE INDUSTRY4 Historical Background4 Trends in Production6 Drivers of Indian Auto Industry8 Growth forecasts for Indian auto industry10

Current industry scenario10 MARUTI SUZUKI INDIA LIMITED12 VISION13 Manufacturing Excellence13 Maruti Suzuki and Motor Sport14 FINANCIAL PERFORMANCE OF MARUTI SUZUKI INDIA LIMITED14 SALES AND SERVICE NETWORK16 ALTO – Let’s GO19 Alto Variants19 SALES GROWTH OF MARUTI ALTO20 STUDY OF ALTO IN THE CONTEXT OF MARKETING21 SWOT ANALYSIS21 STRENGTHS21 WEAKNESSES21 OPPORTUNITIES22 THREATS22 MARKETING MIX23 PRODUCT23 PRICE23 PROMOTION24 PLACE24 SEGMENTATION, TARGETING AND POSITIONING24 ?Segmentation24 ?Targeting25 ?Positioning25 COMPETING PRODUCTS26 Hyundai Motor India Limited26 Models26 Hyundai EON27 Tata Motors27

Models27 Tata Nano27 General Motors India Private Limited28 Models28 Chevrolet Spark28 COMPARISON WITH COMPETITORS29 References30 Figures and Tables Figure 1: Category-wise automobile production4 Figure 2: Production Trend6 Figure 3: Percentage change in production7 Figure 4: Trends in production, sales and exports of automobiles8 Figure 5: Key drivers of Indian Auto Industry9 Figure 6: Sales growth of MSIL14 Figure 7: Profit after Tax and Sales Value15 Figure 8: Company Networth over Years15 Figure 9: Growth in Sales Network16 Figure 10: Market share of Passenger car segment. Source SIAM, 12/200917

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The Management and administration of SDMIMD, Mysore has supported and guided us throughout and no amount of words can express our gratitude towards them. Last but not the least; the team is thankful to their parents and family members for their constant support. Group VIII, Section C PGDM 2012-14 INDIAN AUTOMOBILE INDUSTRY Indian automobile industry is one of the fastest growing in the world. It is one of those manufacturing industries which have grown significantly since the liberalization of India’s economy in 1990s. The industry is also known for many innovations.

In 2010, India has emerged as the second fastest growing car market in the world next only to China. Sales of two wheelers crossed 10 million units during the year, a first, with all major two-wheeler manufactures registering high double digit growth. India in 2010 is the largest tractor manufacturer, second largest two wheeler manufacturer, fifth largest commercial vehicle manufacturer and the eleventh largest car manufacturer in the world. Figure 1: Category-wise automobile production Historical Background Since its establishment, the Indian automobile industry has undergone constant evolution.

Some of the famous car that was manufactured in those times was Ambassador, Fiat 500 and Fiat 1100. In 1953, the government of India modified the regulatory framework and ensured that only those companies which have a manufacturing program in India would be allowed to operate. Seven companies including Hindustan Motors, Premier Automobiles Ltd. and Tata Engineering and Locomotives Company received approval to operate in Indian market. During the decade of 1960s, the three wheeler industry was established in India. In decade of 1980s, Maruti Udyog Ltd. as established and this catalysed the growth of automobile industry significantly. The introduction of Maruti 800 models led to the purchase of more and more vehicles by Indian Consumers. MUL (later named as Maruti Suzuki India Ltd. ) has a technological tie-up with Suzuki Motors of Japan which ensured substantial up-gradation of technology in the Indian car industry. Several multinational players like Mercedes-Benz, Ford, GM, Hyundai, Peugeot and Volvo and Global auto-component firms have also established their bases in India with the view to catering to the demand of not only the domestic market but also to the export markets.

Later half of 1990s and early part of 21st century saw the Indian automobile industry making the extensive leap forward. Since then Indian companies have been emerging globally competitive. They have been making significant strides outside the boundaries through mergers and acquisitions. The evolution of Indian auto component industry is closely associated with the trends in the automobile industry due to strong inter-industry linkages. India started manufacturing components locally by establishing tie-ups with multi-national players for technological up-gradation.

Hence India became major outsourcing destination for the auto majors of the world. The growth of automobile industry was aided by increased economic activity and infrastructure development, growing middle class population with disposable incomes and availability of consumer finance facilities. India’s turnover and exports have surged over the years. Industry has started establishing manufacturing and marketing base abroad. Since 1991, the number of manufacturing facilities in India has grown significantly.

There are around 15 manufacturers of passenger cars and multi utility vehicles, around 10 manufacturers of commercial vehicles, around 15 of 2/3 wheelers. The Indian automobile industry accounts around 5% of the national GDP. The turnover of the automobile industry was around US $ 35 billion and that for components industry was at US $ 18 billion in 2007-08. The total investment in automobile and auto components sectors which was estimated to be at Rs 50,000 crores in 2002-03, has gone up to Rs 80,000 crores by the year 2007-08.

The saturation of traditional automobile markets of Europe, USA and Japan has led to the increasing growth of automobile market in India. About two decades ago, Indian automobile market was supply driven with few vehicular models, which has changed now to a demand driven market catering to the cross section of the society with more than 150 models and variants. Trends in Production Over the last few years there has been an increase trend in the production of vehicles both in value and quantity terms.

The only lean patch in production was during the year 2000-01 and recently in 2007-08 during which the growth in absolute number declined marginally. The momentum in the production may increase further with India being considered favourably as a outsourcing destination. Figure 2: Production Trend From the above graph, it can be seen that the production of automobiles is increasing gradually every year but it has reduced in 2007-08 due to recession. The figure 3 shows the percentage change in production of vehicles ever year. Figure 3: Percentage change in production Category| 2003-04| 2004-05| 2005-06| 2006-07| 2007-08| |

Production| Sales| Production| Sales| Production| Sales| Production| Sales| Production| Sales| Passenger Vehicles| 989560| 902096| 1209876| 1061572| 1308913| 1143076| 1545223| 1379979| 1762131| 1547985| Commercial Vehicles| 275040| 260114| 353703| 318430| 391078| 351041| 519982| 467765| 545176| 486817| Two Wheelers| 5622741| 5364249| 6529829| 6209765| 7608697| 7052391| 8466666| 7872334| 8026049| 7248589| Three Wheelers| 356223| 284078| 374445| 307862| 434424| 359920| 556126| 403910| 500592| 364703| Grand Total| 7243564| 6810537| 8467853| 7897629| 9743112| 8906428| 11087997| 10123988| 10833948| 9648094| Table 1:Category-wise sales and production of automobile in India Figure 4: Trends in production, sales and exports of automobiles The production, sales and exports of automobiles have registered continuous growth from 2002 to 2007 except the year 2007-08. Exports as a percentage of production have also increased during the analysed period. The improvement in the export as a percentage of production from 4. 89% in 2001-02 to 11. 3% in 2007-08 shows the growing capability of the Indian automobile industry to meet the international norms and standards and increasing acceptance of automobiles manufactured from India in the global market. Drivers of Indian Auto Industry The growth of the Indian Auto industry is catalysed by various factors. * The passenger car penetration in India is at 8. 5 vehicles per thousand people absolute terms. It is among the lowest in the world. As per capita GDP of a society grows, mobility needs for its population rapidly increase. * The proportion of young people, who are economically active, is rising in the overall population. This has led to increasing urbanisation and the need for mobility which translates into a higher demand for two and four wheelers in India. Relatively good availability of money and a favourable interest rate regime has also been a strong contributor to sustained demand. * The Indian auto industry is expected to get a boost from the road development programmes that the country has undertaken (Golden Quadrilateral and NSEW corridors). Changing Lifestyle Changing Lifestyle Key Drivers Driversdr Key Drivers Driversdr Exchange of Cars Exchange of Cars Low Car Penetration Low Car Penetration Poor Public Transport System Poor Public Transport System Favourable Duty Structure Favourable Duty Structure Rising Family Income Rising Family Income Improved Infrastructure Improved Infrastructure Finance Availability Finance Availability Figure 5: Key drivers of Indian Auto Industry Annual Income in ? No of households in 2010(millions)| Expected household in 2015(millions)| More than 10 lakh| 1. 2| 3. 3| 5 -10 lakh| 2. 4| 5. 5| 2-5 lakh| 10. 9| 55. 1| 90 thousand-2 lakh| 91. 3| 106| Less than 90 thousand| 101. 1| 74. 1| Total| 206. 9| 244| Table 2: Indian pockets growing deeper From the table 2, it can be observed that Annual Income of the households is expected to grow at higher rate. By 2015, it is estimated that the number of households with Annual Income Rs 2-5 lakhs will be around 55 million. Growth forecasts for Indian auto industry * The Passenger Vehicle market of India will even cross Japan by selling about 5 million Vehicles by 2017-18. The Indian auto exports will be up to $5. 62 billion in the year ending march 2011 and the same will grow to $ 17. 64 billion in 2015-16. * India’s share in global auto exports may also triple by 2016. * India’s passenger vehicle production projections: * By 2015 – 5. 1 million vehicles * By 2020 – 9. 7 million Experts state that in the year 2050, India will top the car volumes of all the nations of the world with about 611 million cars running on its roads. Predictions made by Ernst and Young have estimated that the Indian passenger car market will have a growth rate of about 12 per cent per annum over the next five years to reach the production of 3. 5 million units by the year 2014. The analysts have further stated that the industry’s turnover will touch $155 billion by 2016. This achievement will succeed in consolidating India’s position as the seventh largest automobiles manufacturer on the globe, eventually surging forth to become the third largest by the year 2030 behind China and the US. Current industry scenario At present major Indian, European, Korean, Japanese automobile companies are holding significant market shares. In commercial vehicle, Tata Motors dominates over 60% of the Indian commercial vehicle market. Tata Motors is the largest medium and heavy commercial vehicle manufacturer.

Among the two-wheeler segment, including scooters and mopeds- motorcycles have major share in the market. Hero Motocorp contributes 50% motorcycles to the market while Honda holds 46% share in scooter and TVS makes 82% of the mopeds in the country. In the three wheeler industry in India, Piaggio holds 40% of the market share. Bajaj is the leader by making 68% of the three-wheelers. Car manufacturers in India dominate the passenger vehicle market by 79%. Maruti Suzuki is the largest car producer in India and has 52% share in passenger cars and is a complete monopoly in multi-purpose vehicles. In utility vehicles Mahindra holds 42% share. Hyundai and Tata Motors are the second and third largest car manufacturers in India.

MARUTI SUZUKI INDIA LIMITED Maruti Suzuki India limited (MSIL, formerly Maruti Udyog Limited) is a subsidiary of Suzuki Motor Corporation of Japan. Maruti Suzuki is a leading manufacturer of passenger vehicles in India. It is lovingly referred to as people’s car maker, over the past three decades. Maruti Suzuki has changed the way people in India commute and travel. The Company has two manufacturing facilities located at Gurgaon ; Manesar, south of New Delhi, India. Both the facilities have a combined capacity to produce over a 1. 5 million vehicles annually. The company plans to expand its manufacturing capacity to 1. 75 million by 2013.

The Company offers 15 brands and over 150 variants ranging from people’s car Maruti 800 to the latest Life Utility Vehicle – Ertiga. The portfolio includes Maruti 800, Alto, Alto K10, A-star, Estilo, WagonR, Ritz, Swift, Swift DZire, SX4, Omni, Eeco, Kizashi, Grand Vitara, Gypsy and Ertiga. In an environment friendly initiative, in August 2010 Maruti Suzuki introduced factory fitted CNG option on 5 models across vehicle segments. These include Eeco, Alto, Estilo, Wagon R and Sx4. With this Maruti Suzuki became the first company in India to introduce factory fitted CNG vehicles. In terms of number of cars produced and sold, the Company is the largest subsidiary of Suzuki Motor Corporation.

Cumulatively, the Company has produced over 10 million vehicles since the roll out of its first vehicle on 14th December, 1983. Maruti Suzuki is the only Indian Company to have crossed the 10 million sales mark since its inception. In 2011-12, the company sold over 1. 13 million vehicles including 1,27,379 units of exports. The Company employs over 9000 people (as on 31st March, 2012). Maruti Suzuki’s sales and service network is the largest among car manufacturers in India. The Company has been rated first in customer satisfaction in the JD Power survey for 12 consecutive years. Besides serving the Indian market, Maruti Suzuki also exports cars to several countries in Europe, Asia, Latin America, Africa and Oceania VISION

The Company believes that their core values drive them in every endeavour * Customer Obsession * Fast, Flexible and Fast mover * Innovation and creativity * Networking and Partnership * Openness and Learning Manufacturing Excellence Maruti began its operations in 1983, with the first the Maruti 800 rolling out from its Gurgaon plant. Over the next two decades Maruti Suzuki car models led by Maruti 800 brought about a revolution in the Indian car market. As the automobile market grew so did the company’s production capabilities, production process and infrastructure. Its scale and manufacturing today is completely different from when it began.

Today Maruti Suzuki’s plants are comparable with the best in the world in terms of quality, productivity and operational efficiency. Exports In recent years, the company has expanded its presence in the overseas markets. It is not uncommon to find a Suzuki badge car in countries as different as Algeria, Netherlands, Chile, Sri Lanka, France and Italy. The Company has exported over one million units cumulatively. Some leading overseas markets for the Company include advanced Western Markets such as Netherlands, Germany, France and Italy and U. K beside non-European markets like Australia, South Africa, Algeria, Chile, Indonesia, Sri Lanka and Nepal.

Today, Maruti Suzuki exports models such as A-star, Alto , Estilo, Ritz, M-800 across to over 125 countries. In 2011-12 the Maruti Suzuki exported over 127,300 units. For its sustained efforts in developing new international markets Maruti Suzuki won the Business world International Business Award 2012 (In Exports Auto and Engineering Category). Maruti Suzuki and Motor Sport Maruti Suzuki has been actively promoting motorsports in the country for over a decade now. To popularize action sport, the Maruti Suzuki motorsport calendar is packed with exciting motoring events. Be it for a motorsport enthusiast, an amateur or a professional, there are events that offer the thrill and joy of motorsport to one and all.

The events include Autocross, Treasure Hunt and professional rallies including Maruti Suzuki Raid-de-Himalaya, Maruti Suzuki Desert Storm and Maruti Suzuki Dakshin Dare. These events provide rallying thrills as well as promote safe driving habits. For families, there are events like Women’s Fun Drive and Treasure Hunt throughout the year, across cities. This year we will be organizing the fourth edition of Maruti Suzuki Autocar Young Driver contest, a nationwide search for India’s best young driving talent. FINANCIAL PERFORMANCE OF MARUTI SUZUKI INDIA LIMITED The performance of Maruti Suzuki India Limited has been showing continuous growth in terms of Sales value and sales volumes. The company has been able to maintain its momentum by adopting to the changing environment.

The below graph shows the sales of Maruti Suzuki India Limited Figure 6: Sales growth of MSIL The below graph shows the Sales achieved and the Profit After tax of MSIL over the past 5 years. Figure 7: Profit after Tax and Sales Value The Company’s NETWORTH over the years has continuously increased. The growth in the company’s Networth is depicted in the chart below. Figure 8: Company Networth over Years SALES AND SERVICE NETWORK Maruti Suzuki boasts of the largest Sales and Service network in Indian Passenger Vehicles Market. The company has a Sales Network of 1100 in 801 cities across the country. The Company also has over 2,900 service points pread across 1408 cities across the country. The graph below depicts the growth in the sales network of Maruti Suzuki Figure 9: Growth in Sales Network MAJOR COMPETITORS Maruti Suzuki enjoys a market share of 45% in the Indian Passenger Car Market. However it has been facing stiff competion from other market players such as Hyundai with a market share of 16%, Tata Motors with a market share of 14%, Mahindra with a market share of 8%, Chevrolet with a market share of 4%, Toyota with a market share of 3 % among others. A breakup of the market share of various players in the passenger car segment is shown below. Figure 10: Market share of Passenger car segment. Source SIAM, 12/2009

It may be observed from the above chart and the sales growth of Maruti Suzuki, that the company has been facing stiff competition. The company being the Market Leader has been able to tide through the tough challenges effectively by employing various strategies. The company’s enormous service base and dealer network has enabled it to maintain its stronghold in the Passenger car market. Companies such as Hyundai, Tata Motors and Chevrolet have been launching products targeting the entry level car segment. However Maruti has been able to hold on to its customer base. Various challenging products launched by its competitors are given in the following table. Sl.

No| Segment Description| MSIL Products| Competitors Products| 1| Passenger Cars: Mini| M800, A Star, Wagon-R, Alto| Chevrolet Spark and Beat, Tata Nano and Indica, Hyundai Eon| 2| Passenger Cars: Compact| Swift, Estillo, Ritz| Hyundai i20, Volkswagen Polo, Skoda Fabia, Ford Figo, Fiat Punto, Nissan Micra, Renault Pulse, Honda Brio, Toyota Etios Liva| 3| Passenger Cars: Super Compact| DZire| Tata Indigo, Manza, Mahindra Verito, Hyundai Accent, Chevrolet Optra| 4| Passenger Cars: Mid-Size| SX4| Honda City and Civic, Hyundai Verna, Chevrolet Cruze, Ford Fiesta, Fiat Linea, Nissan Sunny, Toyota Corolla, Renault Fluence| 5| Passenger Cars: Executive| Kizashi| Hyundai Sonata, Honda Accord, Volkswagen Jetta, Skoda Laura, Toyota Camry| 6| Utility Vehicles| Gypsy, Ertiga, Grand Vitara| Toyota Innova, Tata Safari, Sumo, Mahindra Xylo, Scorpio, Renault Duster| 7| Vans| Omni, Eeco| | Table 3: Maruti’s Competitors across various segments Even with the kind of competition, Maruti has been able to hold on to its position with its revolutionary products such as the Alto and Swift. Alto has been continuously the highest selling Passenger Car. Swift enjoys a high market share in the Compact Hatchback segment.

With its presence in 801 cities across the country with over 1300 authorised service centers, Maruti has been able to hold on to its customers. Maruti also faced competition from the used car sales market, for which the company found a novel solution by launching True Value outlets for used cars. ALTO – Let’s GO Maruti Suzuki launched ALTO in the Indian market in 2000. Alto was launched in the entry level Hatchback segment alongside Maruti’s own M800 which was launched in 1983 and since then had revolutionised the Automobile market in India. Alto stood generations ahead of the M800 in terms of technology and interior space. Alto showed the industry what a mass car could offer. It was also the first car that showed that car sales in India could log high sales volumes.

Alto achieved cumulative sales of 20 lakhs during March 2011, the highest for any Indian Car. It also recorded the highest ever number of sales for any Indian Car in March 2011 by selling 38,065 units. As of July, 2012, Maruti Suzuki Alto stands at the no 1 position with 17,422 units sold during the period with a share of 9% of overall passenger car sales. It is worth mentioning that the top three spots are all held by Maruti’s Products. Second position is held by Swift at sales of 11,421 units and DZire at sales of 11,413 units. Maruti Alto was also the world’s highest selling small car of the year in 2010. Major Achievements of Maruti Suzuki Alto: 1. World’s Largest Selling small car for two consecutive years. 2.

Second Maruti Suzuki brand to sell over 2 million, with the first being Maruti 800. 3. Crossed the 20 lakh sales mark in just 11 years 9 months in June 2012 4. Only car brand in India to cross the 3,00,000 unit sales mark in a single financial year. 5. First Indian Car to successfully pass a 24hrs endurance test. 6. Has been the highest selling car brand in the domestic market consecutively for the past 7 years. Alto Variants Maruti Suzuki launched the Alto brand in various variants such as Standard, LX, LXi. VX and VXi. The table below gives a brief outline of the various variants and the features that it offered Sl. No| Variant| Features offered| 1| Standard| Introduced as the basic model.

Had an advantage over M800 in that it had more space and introduced the 5th gear for cruising at high speeds| 2| LX| Model Introduced along with Air Conditioning| 3| LXi| Model Introduced along with Air Conditioning and Power Steering features| 4| VX| This model sported a 4 cylinder V engine along with Air-Conditioning| 5| VXi| This model sported a 4 cylinder V engine along with Air-Conditioning and Power Steering feature| 6| Alto K10| This model was recently launched in 2010 with a powerful 1000cc engine| Table 4: Variants of Maruti Alto Alto has been highly performing in the market and forms the major sales generating cars for Maruti Suzuki.

The company’s effective positioning of the brand enabled it to gain the market leader position in a short period of time. With huge growth of the Brand, MSIL slowly and in a phased manner closed down several of its production lines of M800. Thus Alto allowed MSIL to cannibalise its own product. Alto’s Brand name made Suzuki market A-Star under the Alto brand in Europe. Recent Developments: Recently Alto has been facing stiff competition by players such as Chevrolet (GM), Tata Motors and Hyundai. Launch of Tata Nano was expected to eat into the sales of Alto. Chevrolet launched Spark and Eon’s launch by Hyundai have been expected to eat into Maruti Alto’s sales.

However the company has adopted aggressive marketing strategies to combat the same. The company launched the Maruti Alto Xplore feature with a number of additional features. Alto K10 introduced in 2010 also helped the company combat some combination, which helped it to maintain combined sales of 20,000 units per month. The company is also expected to launch a new 800cc car to be named as Alto 800, with a price in the sub 2 lakh range making it around 40,000 cheaper than the regular Alto. This may be the company’s answer to Nano from Tata Motors. Maruti’s Alto 800 will replace the Iconic M800 and is likely to cash in on the 28-year legacy that the car has created.

Also Maruti is expected to launch the model during the 2012 Indian Festival season to push up sales volumes. SALES GROWTH OF MARUTI ALTO Alto since its inception in 2000 has been posting increasing sales. The sale of Alto in FY 2009 was 212,000 units and grew to 235,000 units in FY 2010. FY 2011 saw sales of 347,000 units and during FY 2012 the brand recorded a sales of 308,000 units. STUDY OF ALTO IN THE CONTEXT OF MARKETING In the course of this work an attempt has been made to study Maruti Alto in the context of Marketing by applying various marketing techniques and models. An effort has been made to apply relevant models to study the success of the brand.

We start with studying the brand in the context of 4 P’s, make a SWOT analysis on Maruti Alto and discuss the Segmentation, Targeting and Positioning. SWOT ANALYSIS The Strengths, Weaknesses, Opportunities and Threats for Maruti Alto as a brand is analysed below STRENGTHS Company Reputation: Maruti enjoys a very good reputation in the Indian Passenger Car Market. The company has built on the reputation from its M800 which revolutionised the market. As a brand Maruti Alto enjoys a similar reputation as the most selling small car. Market Share: Maruti being the market leader in the Passenger car segment enjoys a large market share of over 40%. Alto also enjoys a huge market share in terms of volume sales at around 9% of the overall passenger car sales.

Customer Satisfaction: Maruti Suzuki is Ranked No. 1 in J D Power Customer Satisfaction Index consecutively for 12 years. Distribution Effectiveness: Maruti has a vast distribution and service channel. This has helped the company penetrate into the whole geographical reach of India. The company has a total sales network of 1100 dealers and has covered 801 Indian cities. It has over 1305 Dealer workshops and around 1653 authorised service centres spanning 1408 cities. Geographical Coverage: The Company has covered the width and breadth of the Indian Subcontinent. With its huge sales and service network the company has been able to maintain a strong foothold in the market. WEAKNESSES

Technical Manufacturing Skills (Diesel Car Segment): Maruti Suzuki has by far been the best performing company in the passenger car segment in the petrol variants. Its major sales have been in the Petrol variants. However the company lacks experience in the diesel cars manufacturing and is relatively new to the segment. However with the introduction of the diesel versions of Swift and Swift DZire the company has alleviated the absence in this segment. However Alto completely misses out in this segment. The company has recently reported that it is planning to launch a car with an 800 cc diesel engine. Workforce: Maruti Suzuki has a large workforce; however most of this workforce has been contract personnel.

The company has been witnessing regular strikes by the workforce. A recent turmoil at the companies Manesar Plant is evident of the volatile workforce of the company. Export Market: Maruti Suzuki has been the leader in domestic sales; however the company lags behind in exports. Hyundai its closest competitor in the domestic front holds the leader position in exports. Though Alto has made a name in European roads, the company has not been able to capitalise on the same due to lack of experience. OPPORTUNITIES Purchasing Power: The growing purchasing power and Income of the Indian Middle Class family is an opportunity that the company can capitalise upon.

Diesel Car Segment: Though Maruti Suzuki and Alto as a brand suffer from their relative absence in the diesel car market, the diesel car segment is a luscious opportunity for the company to cash upon. With subsidised diesel prices and better diesel engine technologies in the market, many customers are willing to try diesel cars. Therefore a growing diesel car market segment is an opportunity for Maruti. THREATS Competition from Foreign Players: Maruti Suzuki faces a major challenge from the new players entering the Indian Market from foreign countries. This was already witnessed after the launch of Chevrolet (General Motors) in India. Competition from Second hand / Used Cars Market: Many first timers tend to buy used cars. This eats into the sales of Maruti Suzuki’s products.

However the company has been able to alleviate it with the launch of its very own True Value outlets selling used cars. MARKETING MIX An attempt is made to analyse the Brand with reference to the 4 P’s of marketing: Product, Price, Promotion and Place. PRODUCT Large Portfolio of products: Maruti Suzuki has a large variety of products as shown in table 3. Apart from this the company also has a variety of products under its various brands. Maruti launched Alto in a number of variants such as Standard, LX, LXi, Vx and VXi (referred in table 4) Design: Maruti Alto was so designed to increase the interior space of the car in comparison with the M800. Also the car featured a fifth gear which was absent in the erstwhile leader M800.

Features: Feature additions have been taking place as per the requirements of the customers. Features such as power windows are now a part of the new models K10 and Xplore. Warranty: MSIL offered a warranty of 2 years or 40,000 kms of running whichever is earlier from the date of delivery to its first owner for all of its cars. Also MSIL provides extended warranty services on payment of a premium. The warranty can be extended to 3 or 4 years (60,000 kms or 80,000 kms). PRICE Various variants of Maruti Alto is priced as per the table below: Sl. No| Model| Price (non Metallic) in Rs| Price (Metallic) in Rs| 1| Alto Standard| 2,49,477. 98| 2,52,745. 62| | Alto LXI| 3,01,249. 97| 3,04,517. 61| 3| Alto LX| 2,82,489. 77| 2,85,757. 42| 4| Alto K10 LXI| 3,24,319. 31| 3,27,587. 10| 5| Alto K10 VXI| 3,37,736. 80| 3,41,004. 92| Table 5: Pricing of Maruti Alto Variants MSIL has been recently adopting Aggressive pricing to capture higher market share and to counter the attack by other manufacturers such as Hyundai with the launch of EON. Maruti During the initial days of launch of Alto had put Alto under the A2 segment. The A1 segment had only 1 Brand, the M800. The A2 segment contained 3 brands viz. , Alto, Zen and Esteem. Thereby Maruti scaled down the Alto LX model to Alto Standard priced at over 2. 4 Lakhs.

This enabled Maruti to play 2 brands in the A1 segment which earlier had only one car. Also it may be noted that Alto initially priced the Alto in the A2 segment as most of the components were imported. Efforts of Import Substitution led to increase in the local content and Maruti was thus able to reduce the prices of the models. Maruti is seen adopting aggressive pricing recently. It is reported to be planning the Alto 800 in the sub 2 lakh Rupees segment, cheaper by almost Rs 40,000 than the regular Alto. PROMOTION Maruti Suzuki adopted various sales promotion and Advertising efforts. They target the market with taglines such as “Ghar Ghar me Maruti”, “Mera Sapna Mera Maruti”, “India comes home in a Maruti”.

Ads telling Maruti Alto – Lets Go stressed on the fuel efficiency of the cars. Maruti’s Advertisements were targeted at the mileage savvy Indian consumer. Ads in which people would ask a guide “Kitna Deti Hai” were clearly targeted at the Indian Consumer. The ads noted in the end that “For a Country Obsessed with Mileage, Maruti makes the most fuel efficient cars”. Maruti also offered discounts during festival seasons to increase its sales volumes. Maruti choose many channels for its promotion. It advertised on the print media, broadcasted its advertisements and also advertised over the Internet. Alto was promoted everywhere as a fuel efficient Brand. PLACE

Sales Channels: Maruti expanded from a sales network of 375 in 227 cities in 2005-06 to 801 cities in 2011-12 with a total sales network of 1100. The company has a service network spread across 1408 cities. Coverage: Maruti has been able to launch its products across all states of the country. Its sales network presence in 801 cities indicates to the fact that Maruti has been able to launch its products across the Indian Subcontinent. SEGMENTATION, TARGETING AND POSITIONING * Segmentation: Maruti Suzuki segmented the market on the basis of income and age. In this way they employed demographic segmentation. * Income: For high income groups models like SX4, Kizashi, Swift Dzire and Ertiga were launched.

For middle income groups models like Alto, A Star, Ritz, Wagon-R and Swift under premium hatchback segment were launched. * Age: Maruti Alto was targeted at the Indian Youth. The company launched AD campaigns which showcased it as a car for the youth. However the car appealed for all the age segments. * Targeting: Maruti Suzuki targeted the Indian youth and the middle income group. The company looked at the vast population who were looking to switchover from two wheelers to four wheelers. * Positioning: Maruti Suzuki positioned Alto as the car for the youth along with their existing position as a fuel efficient brand. Their advertisements depicted Alto as a fuel efficient small car for the youth.

This can be also known from the Maruti Suzuki’s note on Alto as “Epitomising freedom and independence, the Alto offers high fuel efficiency and is easy on maintenance. The Alto is the perfect option for the ever-mobile youth of today”. COMPETING PRODUCTS Ever since its Launch Maruti’s Alto has been clocking large sales. The company capitalised on the growing Income of the Indian Household and targeted the Indian Youth. It may be noted that as mentioned earlier, 27% of Alto’s sales came from youth under the age of 29. This was noticed by other major players in the Indian Sector. Thus most of them launched products challenging the position of Maruti Alto. Hyundai, General Motors and Tata Motors came up with products supposed to challenge Maruti Alto.

Below a brief discussion is made about these companies and their competing products. Hyundai Motor India Limited Hyundai Motor India Limited (HMIL) is a wholly owned subsidiary of Hyundai Motor Company (HMC), South Korea and is the largest car exporter and second largest car manufacture in India. HMIL presently markets models of passenger cars across different categories. HMIL’s manufacturing plant is located near Chennai with the total capacity of 600000 units per annum. It claims to have the most advanced production, quality and testing capabilities in the country. To support its growth and expansion plans, HMIL currently has a 336 strong dealer and 721 strong service points across India.

Models The following are the models available currently from the HMIL. 1. Hyundai Accent Executive(Launched 2003) 2. Hyundai Santro Xing(Launched 2003) 3. Hyundai Uber Cool i20(Launched 2008) 4. Hyundai Next Gen i10(Launched 2010) 5. Hyundai Fluidic Verna(Launched 2011) 6. Hyundai EON(Launched 2011) 7. Hyundai Santa Fe(Launched 2010) 8. Hyundai Sonata(Launched 2012) Among these models, Hyundai EON is the nearest competitor for Maruti Alto. It is priced between Rs 2. 7 lakhs to Rs 3. 7 lakhs and gives the Maruti Alto a strong competition. Hyundai EON Maruti is facing stiff challenge from its direct competitor Hyundai Motors after the launch of EON.

There was slight slowdown in Alto’s booking and sales ever since HMIL announced the launch of its new product EON. Hyundai EON was also targeted at the same segment of Indian Youth which was the major segment generating revenues for Maruti Alto. EON achieved bookings of 6315 units during October 2011 during which period the sales of Alto clocked 15,197 units. Tata Motors Tata Motors is the India’s largest Automobile manufacturing company, world’s 4th largest truck manufacturer and 2nd largest bus manufacturer. It is ranked 3rd in the passenger car segment. It has auto manufacturing and assembly and assembly plants in Jamshedpur, Pantnagar, Lucknow, Sanand, Dharwad and Pune.

It has also operations in the UK, South Korea, Thailand and Spain through subsidiaries. It has sold over 6. 5 million vehicles in India since 1954. Models Under passenger cars division of Tata Motors, the following are the models available currently. 1. Tata Sumo / Grande / Gold 2. Tata Safari 3. Tata Indica / Vista 4. Tata Indigo / Marina / Manza 5. Tata Nano 6. Tata Xenon XT 7. Tata Aria Among these models, Tata Nano is the significant competitor for Maruti Alto. It is priced very aggressively around Rs 1. 5 lakhs. Tata Nano The Nano was a household name even before its launch. The launch of Tata Nano expanded the Indian car market by 65% (according to CRISIL). At present, the Nano comes with a 4 years / 60000 km warranty.

The launch of Nano lessened the price gap between the two wheelers and the four wheelers. The Nano was expected to be a major challenge for the Alto and was expected to eat into the sales of Alto. During October 2011 Nano recorded a sales of 3868 units against Alto’s sales of 15,197 units. General Motors India Private Limited General Motors India Private Limited is the fifth largest automobile manufacturing company in India after Maruti Suzuki, Hyundai, Tata Motors and M&M. In 1996, GM launched its first model Opel Astra. General Motors India manufacturing plant is located at Halol, Gujarat and they entered the Indian Auto market with total investment of US $ 252 million.

In 2003, the company entered the MUV segment by launching the Chevrolet brand in India through Forester. In 2004, the company launched another MUV model, the Tavera. The Tavera was quite successful in capturing the attention of tours and travels operators after the exit of Toyota Qualis. Following this the company launched various models in different categories under Chevrolet brand. Models GM India motors discontinued all the models under the Opel brand in 2006 and replaced by Chevrolet. The following are the current models available under the Chevrolet brand. 1. Chevrolet Optra (Launched 2003) 2. Chevrolet Tavera(Launched 2004) 3. Chevrolet Aveo / U-VA (Launched 2006) 4. Chevrolet Spark (Launched 2007) 5.

Chevrolet Captiva (Launched 2008) 6. Chevrolet Beat (Launched 2010) 7. Chevrolet Cruze (Launched in 2007 and upgraded in 2012) Chevrolet Spark GM launched Chevrolet Spark in 2007 targeting the entry level segment with a price tag between Rs 3. 14 – Rs 3. 68 lakhs. . Chevrolet Spark was also launched on the same platform as that of Alto targeting the youth. Chevrolet introduced additional features such as airbags to its variants in Spark. Chevrolet also offered a 3 year / 100000 km warranty for Spark while Maruti offered only a 2 years / 40000 km warranty for Alto. During October 2011 Chevrolet Spark Clocked a sales of 1782 units as against Alto’s sales of 15,197 units.

COMPARISON WITH COMPETITORS In the previous section the close competitors of Maruti Suzuki Alto were discussed. Here an attempt is made to compare the brands on various aspects. The table below shows the comparison. Factor of Comparison| ALTO| HYUNDAI EON| TATA NANO| CHEVROLET SPARK| Company Reputation| High| High| High| Good| Brand name| High| High| Good| Good| Product Quality| Good| Good| Good| High| Product Features| Less| Good| Less| Good| Market Share| High| Low| Low| Low| Product Variants| Good| Less| Less| Less| Table 6: Comparison of Alto with Competitors Products It may be noted that Maruti Suzuki Alto stands ahead of its competition.

However, during recent times it is seen that the market share of the company and the brand has reduced due to other promotional strategies employed by its competitors as well as the features and services offered. Various strategies that may be adopted by Maruti Suzuki to help retain its market share are given below: 1. Product Reformulation: Maruti may adopt various product reformulation strategies to increase its image. The interiors of Alto have been noted to be boring and less spacious. Maruti should work towards improving the interiors of Alto and also to increase the leg space. 2. Feature Additions: Maruti Alto suffered a setback to Hyundai Eon as Eon sported Airbags among other safety features. Maruti can also introduce features such as Airbags, Anti-Lock Braking system and Power Windows. 3.

Product Quality Improvement: Maruti Alto was reported to have hard gears in comparison to Hyundai cars. Maruti may work on the same to improve the quality of the cars. References [1] | M. Goyal, “How Maruti keeps meeting India’s demand ; what makes Swift and Dzire so popular,” The Economic Times, 19 August 2012. | [2] | “www. ibef. org/industry/automobiles. aspx,” [Online]. | [3] | “http://amitbiswal. blogspot. in/2011/08/market-share-analysis-of-indian-car. html,” [Online]. | [4] | S. R. Anjan Ghosh, “Indian Passenger Vehicle Industry: Growth Momentum To Continue”. | [5] | M. M. Mr. S. Prahalathan, “Indian Automotive Industry:At The Crossroads,” Quest Publications, 2008. [6] | Maruti Suzuki India Ltd, “Annual Report 2011-2012”. | [7] | “http://en. wikipedia. org/wiki/Maruti_Suzuki,” [Online]. | [8] | M. Singh, “Maruti Adapts Aggressive Marketing Strategy For Alto To Combat EON Effect,” Caredekho. com, 20 October 2011. | [9] | “http://bestsellingcarsblog. com/category/india/,” [Online]. | [10] | “http://management-punditz. blogspot. in/2012/04/indian-automobile-statistics-fy-2012. html,” [Online]. | [11] | “http://www. marutisuzuki. com/,” [Online]. | [12] | N. S. Gupta, “Maruti may position Alto in the A segment,” The Economic Times, 23 April 2004. | [13] | “http://en. wikipedia. org/wiki/Automotive_industry_in_India,” [Online]. |

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