Study of Maruti Suzuki Alto

SDM INSTITUTE FOR MANAGEMENT DEVELOPMENT case OF MARUTI SUZUKI ALTO SDM IMD REPORT SUBMITTED IN PARTIAL FULFILLMENT OF THE REQUIREMENTS FOR THE AWARD OF erect 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 historic orbit4 Trends in Production6 Drivers of Indian gondola Industry8 Growth forecasts for Indian auto effort10Current labor scenario10 MARUTI SUZUKI INDIA circumscribed12 VISION13 Manufacturing Excellence13 Maruti Suzuki and Motor Sport14 FINANCIAL PERFORMANCE OF MARUTI SUZUKI INDIA LIMITED14 SALES AND SERVICE intercommunicate16 ALTO permits GO19 contralto Variants19 SALES GROWTH OF MARUTI ALTO20 paladinject OF ALTO IN THE CONTEXT OF market21 SWOT ANALYSIS21 STRENGTHS21 WEAKNESSES21 OPPORTUNITIES22 THREATS22 MARKETING MIX23 PRODUCT23 PRICE23 PROMOTION24 PLACE24 SEGMENTATION , TARGETING AND POSITIONING24 ?Segmentation24 ?Tar modeling25 ?Positioning25 COMPETING PRODUCTS26 Hyundai Motor India Limited26 Models26 Hyundai EON27 Tata Motors27Models27 Tata Nano27 widely distributed Motors India cliquish Limited28 Models28 Chevrolet fizz28 simile WITH COMPETITORS29 References30 run a plunders and eludes examine 1 Category-wise railway rail rail railroad railway automobile return4 presage 2 Production Trend6 approximate 3 Percentage change in fruit7 general anatomy 4 Trends in merc cash in ones chipsise, gross revenue and exports of motor machines8 Figure 5 Key drivers of Indian Auto Industry9 Figure 6 gross revenue step-up of MSIL14 Figure 7 Profit afterwards Tax and gross revenue cling to15 Figure 8 participation Ne 2rth everyplace Years15 Figure 9 Growth in gross gross gross gross sales Ne 2rk16 Figure 10 foodstuff manage of Passenger car subdivision. Source SIAM, 12/200917T satisfactory 1Category-wise gross revenue and product ion of railcar in India7 Table 2 Indian pockets evolution deeper9 Table 3 Marutis Competitors across unlike portions18 Table 4 Variants of Maruti alto20 Table 5 Pricing of Maruti low-pitched Variants23 Table 6 Comparison of low-pitched with Competitors Products29 ACKNOWLEDGEMENT The successful completion of this project would not grant been realistic without the help and constant support of m whatsoever(prenominal) involved directly or indirectly. The team is grateful to Dr. H Gayathri, Dean Administration and Professor, SDMIMD, Mysore for giving us an opport building blocky to conduct this study.The Management and administration of SDMIMD, Mysore has supported and travel byd us end-to-end and no amount of words can express our gratitude towards them. stand but not the least the team is thankful to their p bents and family members for their constant support. convention VIII, Section C PGDM 2012-14 INDIAN AUTOMOBILE INDUSTRY Indian automobile constancy is one of the fastest egression in the emolumentman. It is one of those manufacturing industries which call for big squarely since the liberalization of Indias economy in 1990s. The application is in addition known for many innovations.In 2010, India has emerged as the due south fastest growing car mart in the world succeeding(a) only to China. Sales of 2 wheel horses get over 10 one thousand thousand units during the year, a first, with all major(ip) deuce-cyclist manufactures registering high double digit outgrowth. India in 2010 is the Brobdingnagianst tractor manufacturing business, second largest two wheeler manufacturing business, twenty percent 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 persistence has undergone constant evolution.Some of the famous car that was manufacture in those multiplication was Ambassador, Fiat 500 and Fiat 1100. In 1953, the administration of India modified the regulatory frame consummation and ensured that only those companies which film a manufacturing broadcast in India would be allowed to operate. Seven companies including Hindustan Motors, Premier Automobiles Ltd. and Tata Engineering and Locomotives ac go with reliable approval to operate in Indian market. During the decade of 1960s, the three wheeler pains was constituted 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 guide to the purchase of to a greater extent and more vehicles by Indian Consumers. MUL (later named as Maruti Suzuki India Ltd. ) has a technologarithmical outdoor stage with Suzuki Motors of Japan which ensured substantial up-gradation of technology in the Indian car industry. several(prenominal)(prenominal) multinational defenders like Mercedes-Benz, Ford, GM, Hyundai, Peugeot and Volvo and Global auto-component firms yield in addition established their bases in India with the view to catering to the demand of not only the domestic market but similarly to the export markets.Later half of 1990s and early man of 21st century saw the Indian automobile industry qualification the extensive leap forward. Since indeed Indian companies build been emerging internationally competitive. They hurl been qualification significant strides outside the boundaries through with(predicate) mergers and acquisitions. The evolution of Indian auto component industry is closely associated with the trends in the automobile industry ascribable to squargon 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 refinement for the auto majors of the world. The growth of automobile industry was aided by sum up d economic activity and infrastructure development, growing eye frame population with disposable incomes and availability of consumer finance facilities. Indias swage and exports have surged over the geezerhood. Industry has started establishing manufacturing and marketing base abroad. Since 1991, the number of manufacturing facilities in India has grown significantly.There are almost 15 manufacturers of passenger cars and multi benefit 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 conduc t 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 one hundred fifty models and variants. Trends in Production everyplace the last few years in that location has been an increase trend in the production of vehicles both in value and quantity terms.The only name 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 whitethorn increase further with India being considered favourably as a outsourcing destination. Figure 2 Production Trend From the above represent, 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 fomites 989560 902096 1209876 1061572 1308913 1143076 1545223 1379979 1762131 1547985 Commercial Vehicles 275040 260114 353703 318430 391078 351041 519982 467765 545176 486817 dickens 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 1Category-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 never-ending growth from 2002 to 2007 except the year 2007-08. Exports as a percentage of production have in addition increased during the analysed flow. T he 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 honest deal 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 balance of young wad, who are economically active, is rising in the boilersuit population. This has led to increasing urbanisation and the need for mobility which translates into a higher(prenominal) demand for two and four wheelers in India. Relatively good availability of money and a favourable interest rate regime has withal been a strong contributo r to sustained demand. * The Indian auto industry is expected to get a boost from the road development programmes that the province has undertaken (Golden Quadrilateral and NSEW corridors). ever-changing Lifestyle Changing Lifestyle Key Drivers Driversdr Key Drivers Driversdr shift of gondolas Exchange of Cars Low Car Penetration Low Car Penetration ridiculous Public Transport dodging Poor Public Transport System Favourable Duty Structure Favourable Duty Structure acclivity Family Income Rising Family Income Improved Infrastructure Improved Infrastructure Finance accessibility Finance Availability Figure 5 Key drivers of Indian Auto Industry Annual Income in ? No of sign of the zodiacs in 2010(millions) Expected house kick in in 2015(millions) More than 10 hundred thousand 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 get across 2, it can be observed that Annual Income of the theatres is expected to grow at higher rate. By 2015, it is estimated that the number of households with Annual Income Rs 2-5 lakhs depart be around 55 million. Growth forecasts for Indian auto industry * The Passenger Vehicle market of India go away even cross Japan by merchandising around 5 million Vehicles by 2017-18. The Indian auto exports will be up to $5. 62 billion in the year refinement march 2011 and the same will grow to $ 17. 64 billion in 2015-16. * Indias piece of ground in global auto exports whitethorn also triple by 2016. * Indias 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 make by Ernst and recent 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 industrys turnover will touch $155 billion by 2016. This achievement will succeed in consolidating Indias 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 represent major Indian, European, Korean, Japanese automobile companies are holding significant market allocates. 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 piece of land in the market. Hero Motocorp contributes 50% motorcycles to the market while Honda holds 46% piece of ground in scooter and TVS makes 82% of the mopeds in the ground. In the three whee ler industry in India, Piaggio holds 40% of the market piece of ground. 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 originater 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 peoples car maker, over the historic three decades. Maruti Suzuki has changed the way people in India commute and travel. The Company has two manufacturing facilities hardened at Gurgaon Manesar, sec of New Delhi, India. Both the facilities have a combined expertne ss to produce over a 1. 5 million vehicles annually. The corporation plans to expand its manufacturing capacity to 1. 75 million by 2013.The Company offers 15 brands and over 150 variants ranging from peoples car Maruti 800 to the latest Life Utility Vehicle Ertiga. The portfolio entangles Maruti 800, low, low K10, A-star, Estilo, WagonR, Ritz, sprightly, brisk DZire, SX4, Omni, Eeco, Kizashi, Grand Vitara, Gypsy and Ertiga. In an environment friendly initiative, in deluxe 2010 Maruti Suzuki enwrapd manufacturing plant fitted CNG option on 5 models across vehicle segments. These include Eeco, low, Estilo, Wagon R and Sx4. With this Maruti Suzuki became the first association in India to introduce factory fitted CNG vehicles. In terms of number of cars produced and change, 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 14thDecember, 1983. Maruti Su zuki is the only Indian Company to have crossed the 10 million sales mark since its inception. In 2011-12, the friendship 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 Suzukis sales and wait on engagement is the largest among car manufacturers in India. The Company has been rated first in customer satisfaction in the JD force play resume 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 VISIONThe Company believes that their core values drive them in every endeavour * Customer Obsession * Fast, Flexible and Fast agent * Innovation and creativity * Net doinging and Partnership * Openness and Learning Manufacturing Excellence Maruti began its trading operations in 1983, with the first the Maruti 800 rolling out from its Gurgaon plant. Over the next two decades Maruti Suzuk i car models led by Maruti 800 brought about a revolution in the Indian car market. As the automobile market grew so did the caller-ups production capabilities, production process and infrastructure. Its scale and manufacturing today is totally various from when it began.Today Maruti Suzukis plants are comparable with the best in the world in terms of quality, productivity and operational efficiency. Exports In recent years, the gild has expanded its presence in the overseas markets. It is not uncommon to scrape a Suzuki badge car in countries as variant 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 much(prenominal) 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(prenominal ) as A-star, low , 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 reinvigorated international markets Maruti Suzuki won the Business world International Business appoint 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 rally thrills as well as promote safe movement habits. For families, there are events like Womens 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 Indias 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 go with has been able to follow its momentum by adopting to the changing environment.The under 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 agone 5 years. Figure 7 Profit after Tax and Sales Value The Companys NETWORTH over the years has forever increased. The growth in the phoners Net worth 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 interlocking in Indian Passenger Vehic les commercialise. The ships 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 sozzled competion from separate 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, 12/2009It whitethorn be observed from the above chart and the sales growth of Maruti Suzuki, that the company has been facing stiff competition. The company being t he Market Leader has been able to tide through the tough disputes effectively by employing various strategies. The companys 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 hurling products targeting the entry level car segment. However Maruti has been able to hold on to its customer base. discordant challenging products plungeed by its competitors are disposed(p) in the following table. Sl.No Segment Description MSIL Products Competitors Products 1 Passenger Cars miniskirt M800, A Star, Wagon-R, contralto Chevrolet glint and Beat, Tata Nano and Indica, Hyundai era 2 Passenger Cars ram active, 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 Ca rs 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 director 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 Marutis 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 considering 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 use car sales market, for which the company make up a novel solution by launching True Value outlets for used cars. ALTO Lets GO Maruti Suzuki launched ALTO in the Indian market in 2000. Alto was launched in the entry level Hatchback segment alongside Marutis 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 interchange 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 Marutis 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 worlds highest selling underage car of the year in 2010. Major Achievements of Maruti Suzuki Alto 1. Worlds Largest Selling petty(a) 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. showtime 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 emolument over M800 in that it had more space an d introduced the 5th gear for cruising at high speeds 2 LX Model Introduced along with Air teach 3 LXi Model Introduced along with Air Conditioning and Power Steering features 4 VX This model sported a 4 piston chamber V locomotive 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 companys effective stance 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. Altos Brand name make Suzuki market A-Star under the Alto brand in Europe. Recent Developments deep 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 Eons launch by Hyundai have been expected to eat into Maruti Altos sales.However the company has adopted militant 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 companys answer to Nano from Tata Motors. Marutis Alto 800 will tack 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 release 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 try on has been made to study Maruti Alto in the scene 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 Ps, 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 Re come outation 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 cover 801 Indian cities. It has over 1305 bargainer 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 maintai n a strong foothold in the market. WEAKNESSESTechnical 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 intend 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 dress is evident of the volatile workforce of the company. Export Market Maruti Suzuki has been the leader in domestic sales howeve r the company lags behind in exports. Hyundai its nighest 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 consume from their relative absence in the diesel car market, the diesel car segment is a luscious opportunity for the company to cash upon. With subsidized 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 impertinent countries. This was alre ady 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 Suzukis 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 Ps of marketing Product, expenditure, 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) aim 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 stock-purchase warrant of 2 years or 40,000 kms of running whichever is earlier from the date of auction pitch to its first owner for all of its cars. Also MSIL provides across-the-board countenance go 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 offensive pricing to capture higher market share and to counter the attack by other manufacturers such as Hyundai with the launch of EON. Marut i 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 bloodlined 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 t elling Maruti Alto Lets Go stressed on the displace efficiency of the cars. Marutis 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 tell in the end that For a Country Obsessed with Mileage, Maruti makes the most fuel good cars. Maruti also offered discounts during fiesta 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. PLACESales 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 spring chicken. However the car appealed for all the age segments. * Targeting Maruti Suzuki targeted the Indian youthfulness and the middle income group. The company looked at the vast population who were looking for 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 effic ient brand. Their advertisements depicted Alto as a fuel efficient small car for the youth.This can be also known from the Maruti Suzukis 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 Marutis 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 Altos 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 all in all 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. HMILs 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 accessible currently from the HMIL. 1. Hyundai Accent Executive(Launched 2003) 2. Hyundai Santro Xing(Launched 2003) 3. Hyundai Uber placid 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 among 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 Altos 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 Indias largest Automobile manufacturing company, worlds 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 Altos sales of 15,197 units. General Motors India Private Limited General Motors India Private Limited is th e 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 maintenance 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. Ch evrolet 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 plan 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 Altos 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. ingredient of Comparison ALTO HYUNDAI EON TATA NANO CHEVROLET SPARK Company Reputation soaring higher(prenominal) High devout Brand name High High ripe 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 operate offered. Various strategies that may be adopted by Maruti Suzuki to help obtain 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 Hyu ndai 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 Indias demand what makes Swift and Dzire so popular, The sparing 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 IndustryAt 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 Effec t, Caredekho. com, 20 October 2011. 9 http//bestsellingcarsblog. com/ mob/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.