Preview

Indian Automobile Industry : Maruti Case Study

Good Essays
Open Document
Open Document
8394 Words
Grammar
Grammar
Plagiarism
Plagiarism
Writing
Writing
Score
Score
Indian Automobile Industry : Maruti Case Study
MARUTI UDYOG LIMITED – Managing competition successfully

Maruti Udyog Limited (MUL) was established in Feb 1981 through an Act of Parliament, to meet the growing demand of a personal mode of transport caused by the lack of an efficient public transport system. It was established with the objectives of - modernizing the Indian automobile industry, producing fuel efficient vehicles to conserve scarce resources and producing indigenous utility cars for the growing needs of the Indian population. A license and a Joint Venture agreement were signed with the Suzuki Motor Company of Japan in Oct 1983, by which Suzuki acquired 26% of the equity and agreed to provide the latest technology as well as Japanese management practices. Suzuki was preferred for the joint venture because of its track record in manufacturing and selling small cars all over the world. There was an option in the agreement to raise Suzuki’s equity to 40%, which it exercised in 1987. Five years later, in 1992, Suzuki further increased its equity to 50% turning Maruti into a non-government ganization managed on the lines of Japanese management practices.
Maruti created history by going into production in a record 13 months. Maruti is the highest volume car manufacturer in Asia, outside Japan and Korea, having produced over 5 million vehicles by May 2005. Maruti is one of the most successful automobile joint ventures, and has made profits every year since inception till 2000-01. In 2000-01, although Maruti generated operating profits on an income of Rs 92.5 billion, high depreciation on new model launches resulted in a book loss.

COMPANY HISTORY AND BACKGROUND

The Evolution
Maruti’s history of evolution can be examined in four phases: two phases during pre-liberalization period (1983-86, 1986-1992) and two phases during post-liberalization period (1992-97, 1997-2002), followed by the full privatization of Maruti in June 2003 with the launch of an initial public offering (IPO).The first phase started

You May Also Find These Documents Helpful

  • Satisfactory Essays

    From the above diagram, it can be inferred that Maruti, as of now is focussing more on Generic growth, however as product life cycles are getting shorter, it has a long term strategy to shift focus to product…

    • 332 Words
    • 2 Pages
    Satisfactory Essays
  • Good Essays

    The Maruthi Suzuki India has a strong dealership network comprising more than 450 cities across India and a huge service network of more 2750 franchises of service outlets spreading about 1300 cities throughout India. Such a widely distributed sales and service network can help the company to relate with its customers across India and also facilitates bargaining power with suppliers and increase profitability. Also it has ‘Maruthi True…

    • 536 Words
    • 3 Pages
    Good Essays
  • Good Essays

    Maruti is India's largest automobile company. The company, a joint venture with Suzuki of Japan, has been a success story like no other in the annals of the Indian automobile industry. Today, Maruti is India's largest automobile company. This feat was achieved by the missionary zeal of our employees across the line and the far-sighted vision of our management.…

    • 8118 Words
    • 33 Pages
    Good Essays
  • Satisfactory Essays

    Wipro

    • 483 Words
    • 2 Pages

    Maruthi Suzuki India Limited (MSIL formerly known as Maruthi Udyog Limited) is a subsidiary of Suzuki Motor Corporation, Japan. MSIL has been the leader of Indian car market for over two and half Decades. The company has two plants located one at Gurgaon and Manesar, south part of New Delhi, India. Both the facilities have a combined capability to produce over 1.5 million (1500, 000) vehicles annually. And planning to expand more.…

    • 483 Words
    • 2 Pages
    Satisfactory Essays
  • Powerful Essays

    Starting its journey from the day when the first car rolled on the streets of Mumbai in 1898, the Indian automobile industry has demonstrated a phenomenal growth to this day. Today, the Indian automobile industry presents a galaxy of varieties and models meeting all possible expectations and globally established industry standards. Some of the leading names echoing in the Indian automobile industry include Maruti Suzuki, Tata Motors, Mahindra and Mahindra, Hyundai Motors, Hero Honda and Hindustan Motors in addition to a number of others.…

    • 33371 Words
    • 134 Pages
    Powerful Essays
  • Better Essays

    The Indian passenger car industry had a sheltered existence till the early 80’s. Until 1981, there were two dominant players in the Indian scene – Hindustan Motors and Premier Automobiles. In 1982, Maruti Udyog, a 50:50 joint venture between Suzuki Motors and the Indian Government introduced a hatch back car at an affordable price. Gradually, Maruti introduced different new models creating different segments and overtook HM and PAL with attractive prices and fresh designs. Within a short span of time, MUL occupied number one position in the car market. In the mean time, the opening up of the economy in 1991 attracted several multi-national companies. Besides this, some domestic majors also entered into the passenger car market. As a result, India has become one of the fastest growing car markets in the world. In fact, it holds a promising ninth position in the entire world and growing with a cumulative annual growth rate (CAGR) of about 14 percent, ready to surpass many developed markets. Today, almost every major car maker of the world is present in India where Maruti Suzuki is the market leader with over 50 percent market share. It is to be noted that in the car market, there are three major segments, out of which small car segment constitutes almost 81 percent of the Indian passenger car industry. It shows that there is immense growth potential to small cars and the future growth looks very promising due to various factors and forces. Some of them are low penetration, good economic growth, buoyant rural markets, growing middle class, poor public transport system and fuel efficiency of small cars.…

    • 953 Words
    • 4 Pages
    Better Essays
  • Satisfactory Essays

    Automobile Industry

    • 1786 Words
    • 8 Pages

    Strong demand growth due to rising incomes, growing middle class, and a young population is likely to propel India among the world’s top five auto-producers by 2015 Growth in export demand is also set to accelerate…

    • 1786 Words
    • 8 Pages
    Satisfactory Essays
  • Good Essays

    Maruti Udyog Limited (MUL) was established in February 1981, though the actual production commenced in 1983 with the Maruti 800, based on the Suzuki Alto kei car which at the time was the only modern car available in India, its only competitors- the Hindustan Ambassador and Premier Padmini were 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 those made by Maruti in India, albeit not assembled or fully manufactured in India or Japan are sold by Pak Suzuki Motors in Pakistan.…

    • 1229 Words
    • 5 Pages
    Good Essays
  • Good Essays

    Since its inception, MSIL (erstwhile Maruti Udyog Ltd.) has been peppered with labor issues. MSIL has been hiring majority workers from nearby villages of Gurgaon and Delhi who initially were comfortable with the modern manufacturing process and Japanese work culture. In the year 2000, a major industrial issue began on the pretext of disinvestment and demand for increase in wages. The central government prevailed and privatized Maruti in 2002. Since then, the day to day affairs of MSIL went into the hands of Suzuki, Japan.…

    • 1350 Words
    • 6 Pages
    Good Essays
  • Good Essays

    Crm - Maruti Suzuki

    • 870 Words
    • 4 Pages

    Maruti Udyog Limited (MUL) was established in February 1981, though the actual production commenced in 1983 with the Maruti 800, based on the Suzuki Alto kei car which at the time was the only modern car available in India, its' only competitors- the Hindustan Ambassador and Premier Padmini were both around 25 years out of date at that point. Through 2004, Maruti has produced over 5 Million vehicles. On 17 September 2007, Maruti Udyog was renamed Maruti Suzuki India Limited.…

    • 870 Words
    • 4 Pages
    Good Essays
  • Powerful Essays

    Suzuki Motor Corp was one of the first foreign joint venture companies in Association with the Indian Government to set factory in India under the name of Maruti Udyog Limited. Their first car was produced in the Manesar plant in Gargaon in 1983. The company was renamed as Maruti Suzuki India Limited (MSIL) in September 2007which reflected the total disengagement of Indian Government by the selling of its share to Indian investment companies. Suzuki Motor Corp has a holding of 54.2% of the capital. In 2010 Maruti’s production was 7,800,00 vehicles while the total production of vehicles in India were 2,600,000. They had a market share of 44.90% in the Indian car market.…

    • 1668 Words
    • 7 Pages
    Powerful Essays
  • Satisfactory Essays

    Rular India - Market

    • 3453 Words
    • 14 Pages

    Japanese companies such as Toyota, Honda, and Suzuki first came to India in 1984 to sign joint-venture collaboration agreements with Indian companies. These collaborations for the most part were very successful. As an example, the Honda collaboration with Hero Motors in India produced more motorcycles last year than Honda did in Japan. A similar story is that of the Maruti Suzuki India Limited collaboration. Once again, Maruti-Suzuki produced many more vehicles in India last year than Suzuki did in Japan. This shows the great potential of the Indo-Japanese collaboration.…

    • 3453 Words
    • 14 Pages
    Satisfactory Essays
  • Powerful Essays

    Maruti Suzuki

    • 4324 Words
    • 18 Pages

    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 Limited was renamed Maruti Suzuki India Limited.…

    • 4324 Words
    • 18 Pages
    Powerful Essays
  • Powerful Essays

    Swot of Maruti Suzuki

    • 2040 Words
    • 9 Pages

    Joint Venture: Suzuki Corporation Japan for technology holding 54% stake in Maruti Suzuki India limited.…

    • 2040 Words
    • 9 Pages
    Powerful Essays
  • Powerful Essays

    One team one goal

    • 2898 Words
    • 12 Pages

    most successful year for Maruti ever” says R. C. Bhargava, the then Managing Director and…

    • 2898 Words
    • 12 Pages
    Powerful Essays

Related Topics