Published on September 26, 2009
Slide 1: Maruti Suzuki Meenakshi Gupta D-66 Udit Gupta D-31 Navita Agrawal D-12 Swati D-07 Sakshi Dhawan D-05 INTRODUCTION : INTRODUCTION Maruti Suzuki India Limited is a leading four-wheeler automobile manufacturer in South Asia. It is largely credited for having brought in an automobile revolution to India. It was a joint venture between the Indian government, and Suzuki of Japan. As of May 10 2007, Govt. of India sold its complete share to Indian financial institutions. With this, Govt. of India no longer has stake in Maruti Udyog. The company annually exports more than 50,000 cars and has an extremely large domestic market in India selling over 730,000 cars annually. Maruti Suzuki offers 13 models, Maruti 800, Omni, Alto, Versa, Ritz, Gypsy, A Star, Wagon R, Zen Estilo, Swift, Swift Dzire, SX4, and Grand Vitara. Maruti Suzuki has manufacturing plants in Gurgaon & Manesar Slide 3: Internal Environment Men : Men The company has a multi-tier management structure, comprising: Board of Directors Managing Executive Officers Executive Officers Divisional Heads Through this it is ensured that: Strategic supervision is provided by the board. Control and Implementation of Company’s strategies is achieved effectively. Operational management remains focused on implementation. Information regarding the company’s operations and financial performance are made available adequately. Slide 5: Delegation of decision making with accountability is achieved. Financial and operational control and integrity are maintained at operational level. Risk is suitably evaluated and dealt with. The employees of Maruti, from technicians to engineers to sales persons, have fully imbibed the Japanese work culture of making constant improvement, and placing the prosperity of the company as the means of their own advancement Money : Money For its Indian operations, the company plans to invest Rs 9,000 Crore by 2010. The company has also made huge investment in the plant situated at Manesar, that is almost ready to reach its peak production level of 300,000 units. Slide 7: The company also operates at the new engine facility located at Gurgaon. Maruti Suzuki has a good network of internal resources to finance the company’s operations, expansion plans as well as capital investments. Machinery : Machinery The Manesar plant of the company established in 2006achieved an expanded installed capacity of 1,70,000 units at the end of first year. The models of Swift, SX4 and Dzire are manufactured in Manesar. Slide 9: Recently, the company has introduced a peppy k series engine for its new car, Maruti Suzuki A-star. In future, it aims to produce more environment-friendly car engines. The company plans to design cars that are fuel efficient and lower on CO2 emissions. It also has plans to develop hybrid, electrical, and multi-fuel engines Materials : Materials Maruti uses the following materials to reduce its energy consumption while manufacturing cars: Energy efficient fans in cooling towers Special transformers to minimize the energy losses. Energy efficient motors and blowers in the air washer system for shop cooling Energy efficient chillers for air conditioning. Slide 11: Building Management System and Variable Air Volume System for optimized cooling in the work places and reduce the energy consumption. Increased re-use of waste heat of combustion for running equipment. Energy efficient lighting. Energy efficient air driers. Methodology : Methodology Small is Beautiful Maruti Suzuki has a firm belief that the future of Indian car industry belongs to small cars. The rising fuel prices, high input costs and congested city roads is paving way for small, light-weight and fuel efficient cars. Even the government is supporting the introduction of small cars with favorable policies. Exuding company’s confidence on growth of small cars, Maruti Suzuki aims to roll out more numbers of small cars for the Indian sub-continent. Slide 13: Re-enter Europe Maruti Suzuki re-entered European market with a global car that is fuel-efficient and lower on CO2 emissions. This new car christened as Maruti Suzuki A-Star was launched in Europe with the brand ‘Suzuki Alto’. Maruti has announced to launch another world strategic car model, Maruti Suzuki Splash. Slide 14: External Environment Micro Slide 15: Threat from the new players: Increasing Most of the major global players are present in the Indian market; few more are expected to enter. Financial strength assumes importance as high are required for building capacity and maintaining adequacy of working capital. Rivalry within the industry: High There is keen competition in select segments. (compact and mid size segments). New multinational players may enter the market. Slide 16: Market strength of suppliers: Low A large number of automotive components suppliers Automotive players are rationalizing their vendor base to achieve consistency in quality Market strength of consumers: Increasing Increased awareness among consumers has increased expectations. Thus the ability to innovate is critical Product differentiation via new features, improved performance and after-sales support is critical Increased competitive intensity has limited the pricing power of manufacturers Slide 17: Threat from substitutes: Low to medium Consumer preference is changing (Mini cars are being replaced by compact or mid sized cars) Setting up integrated manufacturing facilities may require higher capital investments than establishing assembly facilities India is also likely to increasingly serve as the sourcing base for global automotive companies, and automotive exports are likely to gain increasing importance over the medium term Indian passenger car market is moving towards cars of higher capacity competition is likely to intensify in the SUV segment in India following the launch of new models at competitive prices Slide 18: External Environment Macro- PESTEL Slide 19: Political Environment Slide 20: The policies & objectives laid down by the Indian Government regarding the automobile sector are: Exalt the sector as a lever of industrial growth and employment and to achieve a high degree of value addition in the country Promote a globally competitive automotive industry and emerge as a global source for auto components Establish an international hub for manufacturing small, affordable passenger cars and a key center for manufacturing Tractors and Two-wheelers in the world Ensure a balanced transition to open trade at a minimal risk to the Indian economy and local industry Slide 21: Conduce incessant modernization of the industry and facilitate indigenous design, research and development Steer India's software industry into automotive technology. Example: the company developed CMA software for carrying out target costing. Assist development of vehicles propelled by alternate energy sources Development of domestic safety and environmental standards at par with international standards Slide 22: Keeping the Government policies in mind Maruti Suzuki has adopted the following policies to run the organisation: Maruti Suzuki is one of the organisation which was able to survive the global recession. Not only they made a reasonable profit but also didn’t give away any pink slips Maruti Suzuki is the leading automobile manufacturer in the country. Now they are in the process of re-entering the European market by introducing A-Star The company has now started using CNG Kits. They have introduced this technology in Alto which fulfills the CSR of going Green The company has introduced KB-Series engine which offers latest technology to the customers Slide 23: Economic Environment Slide 24: ECONOMIC ENVIRONMENT OF MARUTI SUZUKI The global meltdown has certainly hit the Indian car industry hard.The industry posted a growth rate of 11 per cent in the year 2007 which has fallen to 3 per cent this year. Maruti now plans to tap the rural market, 60 per cent of which runs on cash . Maruti has appointed 2,000 sales executives to target customers in the rural areas. Slide 25: The company is offering discounts ranging from Rs 3,000 to 8,000 on various models in the rural market. On May 8 2009 Maruti Suzuki India planned to ramp up its production capacity by addition of 2 Lakh cars in the next two fiscal years. Currently, Maruti Suzuki manufactures 9 Lakh cars annually to cater to the biggest segment - small cars in India. It will be spending nearly Rs 1,800 Crore to develop the capacity. Slide 26: Maruti Suzuki sold 7.92 Lakh cars in the last 2008-09 fiscal year which combines the domestic sales and those made abroad. It recorded the highest sales in April with a 15 percent jump and sale of 71,748 units in one month. Company has allocated Rs 9,000 Crore for a new engine plant and new research and development centre, in japan. In January 2009, Maruti exported 4774 units and accounts for a total car sales of 71,779 units. Slide 27: The recession affect on Automobile Prices The pricing of the following cars have gone up by: A-Star hatchback - Rs 10,000 All variants of SX4 sedan - Rs 9,000. The price of Swift Petrol LXi Rs 5,000. For the higher variants of Swift-VXi and Zxi- Rs 6,000. The new prices for Swift DZire Rs. 7,000 Slide 28: Social Environment Social environment : Social environment Welfare Camps Medical support & welfare Education to underprivileged Road Safety Maruti Driving Schools Greening of Supply Chain Adopting energy saving technologies Reducing water wastage Green Growth Slide 30: Technological Environment Slide 31: Launched CNG kit for Alto, its highest selling small car. The company as a proactive move is all set to make its entire fleet of cars adhere to ‘end of life vehicles’ (ELV) specifications by 2010 by doing away with the usage of hazardous substances during production of cars and their components. Slide 32: The company is involved with the development of small and fuel-efficient car engines. In future, the company has high plans to increase the engine development work in India along with other R&D operations. Slide 33: The company uses next generation KB series Engine in its new Hatchback car A-star. The company added Virtual Design Review to its R&D activity to enable virtual validation to reduce cycle time and development cost. In the field of alternate fuel technology, the company developed LPG system for MPI engine. Slide 34: Ecological Environment Practicing 3 R : Practicing 3 R 3R- reduce, reuse, and recycle. Continuous process of promoting 100% recyclable and reusable car parts. Targets reducing fresh water consumption and implement rain water harvesting. Slide 36: The newly launched Maruti Suzuki A-Star is designed to meet the European ELV (End-of-Life Vehicle) norms. Promoting Green Procurement : Promoting Green Procurement Encourages its customers to act upon environment friendly approach. The company conducts regular training and education programmes at the supplier end. Sessions are also held at all possible places comprising people from all arenas of the car industry. Slide 38: Researches are done to learn innovative ways of improving ecological balance and reduce automotive emissions. Promoting Energy Conservation : Promoting Energy Conservation Education, and improvement initiatives are taken on the shop floor. The company has introduced three-coat-one-bake painting system at its facility. The company is moving towards making its entire fleet of cars green with advanced and efficient technologies. Certification and Awards : Certification and Awards 1999- Certified for establishing and maintaining EMS as per ISO 14001:1996 standards. The company was again recertified for the same in 2002. Certified for changing its EMS from ISO 14001:1996 version to ISO 14001:2004 version. Slide 41: Golden Peacock award for Environment Management in 2007 was honored by World Environment Foundation. First prize for excellence in implementation of Energy Conservation measures in industrial sector was awarded by renewable energy department of Haryana Government. Slide 42: Legal Environment Legal Environment : Legal Environment Follows highest standards of Corporate Governance Customer can contact the Secretarial & Legal Department for any questions/clarifications. Legal compliance reporting The board periodically reviews reports of compliance with all laws applicable to the Company, as well as steps taken by the Company to rectify instances of non-compliances. The Company has developed comprehensive legal compliance scheduling and management software by which specific compliance tasks are assigned to each individual. The software enables in planning and monitoring all compliance activities across the Company.