TITLE – Changes in Sales and Distribution Strategy of

Maruti Suzuki Swift and Hyundai Getz

Submitted to – Prof. Maninder Singh

Prepared by :–
Group Index No. – E2210
Nikhil Bhatnagar FE2
Abhay Kapur FE2
Prashant Agrawal FE2
Akhil Gupta FE2
Shantanu Shukla FJ1

Contents
Executive summary 3
Acknowledgement 4
Methodology 5
Automobile sector 7
Company background (Maruti) 11
Company background (Hyundai) 16
Final Analysis 19
Recommendations 24
Conclusion 25
Annexure

EXECUTIVE SUMMARY
s
Initially in the early 1980’s when Maruti Suzuki joined hands to be a player in the Indian
automobile market, there was not much competition from the other players. There main
challenge was to make people buy there cars. There first car- Maruti 800 was a great success
and we can still find those Maruti 800’s on the roads today also. But now, the situation is a
whole lot different. There are many major international players of the automobile sector in
the Indian market today. They have eaten up a sizable share of Maruti and are becoming a big
threat for Maruti. One of them is Hyundai. Hyundai became one of the fastest companies to
reach its break even point in India.
Our research involves an in-depth study and analysis of two established brands in terms of
sales and distribution network: HYUNDAI GETZ and MARUTI SUZUKI SWIFT.
The objective of our research was to compare and analyze the sales and distribution network
of Maruti Suzuki and Hyundai and their effectiveness.
The data collected for the project was collected from primary and secondary sources. Primary
data is based on the findings from the company personnel, dealers and consumers (every day
people) with the use of tools like Questionnaires, Interview Schedules and Discussions. This
data is further substantiated by the use of appropriate secondary sources like Internet,
magazines and reviews etc.
In this project we went through interviewing the Dealers, and Management officials of
MARUTI UDYOG and also HYUNDAI LIMITED covering most of the regions of Delhi
and NCR. In this project we have also covered the financial terms of the company with the
dealers and that of the dealers with the customers.
Also, with the help of statistical tools like graphs and charts, the research and analysis work is
shown. By this study we have been able to compare the two giants of the automobile industry
in India and about the effectiveness of their sales and distribution channel.

ACKNOWLEDGEMENT

We are grateful to our esteemed Prof, Maninder Singh, for

giving us an opportunity to do an in-depth study on the project
and gain a practical exposure. We are also grateful to him for
his help, guidance and support. We are also grateful to Indian
Institute of Planning and Management for designing such
a course structure so that we can gain a practical exposure
before actually going to the field.

We are also thankful to all the company representatives of

Maruti and Hyundai who provided us with the information
required and help us in completing our project report.

Company Representatives:
• Mr. Anmol Joneja – Territory Sales Manager , MSIL
• Mr. Rahul Sharma – Senior Officer, HMIL

We are also thankful to the various channel

membersassociated with MARUTI and HYUNDAI who provided
us with substantial information which was helpful for our study.

We are also grateful all the 250 consumers of MARUTI SWIFT

and HYUNDAI GETZ who cooperated with us to conduct our
survey on these companies.

METHODOLOGY

The business sector chosen for this purpose is the automobile sector, and the players chosen
for the study are:
Maruti Suzuki
Hyundai
 INFORMATION SOURCES

PRIMARY DATA SOURCES

 MARUTI – Territory Sales Manager
 MARUTI – Dealers
 HYUNDAI – Senior Officer
 HYUNDAI – Dealers

SECONDARY DATA SOURCES

INTERNET
www.google.com

www.autocar.com

www.marutisuzuki.com

www.wikipedia.com

DATA COLLECTION TOOLS

Interviews and Discussions with the company representatives (officials) and dealers. Surveys
of the consumers using Maruti or Hyundai automobiles basically models Maruti Suzuki Swift
and Hyundai Getz. Interview Schedules and Questionnaires were used to record data.

SAMPLE SIZE USED

The sample size for the company representatives (officials) was 1 each in number while the
sample size of the dealers was 5 each.

COMPANY MARUTI HYUNDAI

Company Representatives 1 1
Channel Partners 5 5
Customers surveyed were 250 in number.

PROBLEMS FACED:
The basic problem that we faced was at two levels. One at the level of the dealers and the
other at the level of the consumers.
The dealers were hesitant about disclosing the financial facts about the company, and the
terms they have with the company, not many statistics were given as all was termed as
confidential
It was also difficult for us to identify and get information from the consumers of MARUTI
and HYUNDAI CARS for the purpose of our survey.

AUTOMOBILE SECTOR
India’s automobile sector is a highly booming sector. There has been a consistent growth in
the production and sales of cars in the past few years. Instead there has been a growth of
about 49.4% of the automobile sector as a whole between 1998-99 to 2004-05.

Category 1998-99 2004-05 (Apr-Dec)

Passenger Car 25468 121478
Multi Utility Vehicles 2654 3892
Commercial Vehicles 10108 19931
Two Wheelers 100002 256765
Three Wheelers 21138 51535
Percentage Growth -16.6 32.8
This the break up of the different types of automobiles and there growth between 1998-99
and 2004-05.
The auto component sector has also posted significant growth of 20 per cent in 2003-04, to
achieve a sales turnover of Rs.30,640 crore (US$ 6.7 billion). Further, there is a potential for
higher growth due to outsourcing activities by global automobiles giants. Today, this sector
has emerged as another sunrise sector.

Major Manufacturers in Automobile Industry

• Maruti Udyog Ltd.
• General Motors India
• Ford India Ltd.
• Eicher Motors
• Bajaj Auto
• Hindustan Motors
• Hyundai Motor India Ltd.
• TVS Motors

SWOT (Strengths, Weaknesses, Opportunities, and Threats) Analysis

Strengths
1. People are more and more willing to buy cars
2. Presence of well known companies now in India
3. Dealership is now available in most of the cities
Weaknesses
 1. Low purchasing power of the consumers
2. High registration taxes imposed by the govt. in some places
3. Poor condition of roads in many places discourages consumers to buy an automobile
Opportunities
1. Rapid urbanization
2. Increasing purchasing power of consumers
3. Availability of more and more finance schemes
Threats
1. Increasing fuel prices
2. Increasing congestion on roads
3. Increasing price of the raw materials

CURRENT SCENARIO
Opposing the belief that the growth in automobile industry has catered only to the top
income-stratum of society, Growth of exports of 32.8 % in the first three quarters of 2004-05,
the fastest growth in volumes has come from commercial vehicles as against passenger cars.

Between 1998-99 and 2003-04, output of commercial vehicles has grown 2.8 times compared
to the 2.2 times increase in passenger cars. Furthermore, two-wheeler output continues to
dominate the volume statistics of the sector. In 2003-04, for every passenger car turned out by
the sector, there were 7 two-wheelers produced. In the two wheeler segment, there is a greater
preference for motorcycles followed by scooters, with both production and domestic sales of
motorcycles increasing at faster rates than for scooters in the current and previous years.
However, mopeds have registered low or negative growth. Export growth rates have been
high both for motorcycles and scooters.
From the total sales of all vehicles of 52 lakh in 2001-02 to over one crore in 2006-07, the
Indian automobile market is one of the fastest growing one in the world, says latest figures of
the Society of Indian Automobile Manufacturers (SIAM). Around 2,000 exhibitors from 25
countries, including France, Brazil, Japan and Korea, are participating in the ‘car bazaar’
summit.
The expo is witnessing one of the biggest global participation with automobile manufacturers and
ancillaries from the U.S., Japan, China, Germany, France and Italy among others exhibiting their
products.

The current ‘car fair’ assumes great significance as it will be for the first time that the world’s
leading automobile companies would unleash ‘global launches’ of their exciting new
products. Interestingly, many companies plan to launch their products first in India and then
scout for the global markets.
The biggest driver of this growth has been the passenger vehicle segment and two-wheelers
— while sales figure of cars went up from 6.75 lakh units in 2001-02 to 13.79 lakh units in
2006-07, in the case of two-wheelers, it skyrocketed from 42 lakh units to 78 lakh units,
making India one of the hot markets not only in Asia but also across the globe, says SIAM.
Similarly, commercial vehicles and two-wheeler market is also following the growth path.
While Indian automobile manufacturers are exploring foreign markets, global players are
entering the Indian market, either on their own or in collaboration with domestic players. The
commercial vehicle segment, which off late has also come in the priority list of global
players, has been growing steadily, from 1.46 lakh units sold in 2001-02 to 4.61 lakh vehicles
in 2006-07.

FUTURE SCENARIO
With the easy availability of finance, increasing requirement of more cars per family,
increasing double income families, increasing style and fashion sense in consumers and
increasing options of buying a car, the future of this sector looks very bright.
On the other hand, increasing fuel prices, high registration fees, poor road conditions,
increasing traffic congestion and traffic jams are the factors hindering the immense growth
potential of this industry.
India, which is the third largest car market in Asia, is no longer a market for smaller cars.
Sales in all segments — be it an entry level car, a luxury hatchback, a sedan, a sports utility
vehicle, a multi-utility vehicle or the branded products — are posting impressive growth.
Interestingly, India will soon be the only market in the world to have both — world’s
cheapest car, the Rs. 1 lakh ‘Nano’, and the costliest ones like the Maybach, Bentley,
Phantom and Lamborghini having made their debut in India.
When the entire country waited with bated breath in anticipation of ‘Nano’ being unveiled at
the opening day of Asia’s largest automotive show — Auto Expo — in Delhi recently, it was
hardly surprising to see a large number of people seeking trade inquiries with the executives
of European luxury carmakers — BMW, Volkswagen, Renault and Audi — asking about
availability of their cars in India that are priced between Rs. 30 lakh and Rs. 1.25 crore.
It is this mass potential of the Indian automobile sector that is attracting all top car makers to
India, forcing them to set up their production facilities in the country, not just to tap the
domestic market but to source in overseas market, thanks to cheap Indian labour and low
production cost.
MARUTI SUZUKI INDIA LTD.

COMPANY DETAILS
Maruti Suzuki India Ltd. was incorporated in February 1981. The Joint venture agreement
between Indian Maruti and Japan’s Suzuki came into being in October 1982. Suzuki, Japan
holds 54.2% of the shares of the company and the balance is with other financial institutions
and public. It is a leading four-wheeler automobile manufacturer in South Asia. 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. On
17 September 2007, Maruti Udyog was renamed to Maruti Suzuki India Limited. The
company's headquarters remain in Gurgaon, Haryana.
Since its beginning, Maruti has been the benchmark in the automobile industry of India. Due
to the trust the consumers have in this company, easy availability of service stations all over
India, good product quality, high level of customer satisfaction and a wide range of cars, it
holds the highest market share in the car industry of India.
Most of the technology for the cars is imported from Japan. These parts have to be ordered at
least 2 months in advance. But there are some cars whose technology is entirely made in
India now. Maruti 800 and Omni are entirely made in India. Maruti has 2 manufacturing
facilities in India, one in Gurgaon and the other in Manesar. The Manesar plant is majorly
used just for the production of Swift. Technologies like gearbox and some other parts for
Swift, DZire and SX4 are imported from Japan. All the cars except for the Grand Vitara are
assembled in these two plants. The Grand Vitara is imported in its assembled and ready to be
sold form from Japan through ships. It is delivered on the port in Mundla.
The cars are delivered to their respective dealers through trucks/trailors for long distances and
by road for short distances. Maruti is also starting rail services for delivering their cars in
some places. They also plan to fit in GPS systems in their cars. This will help them in
locating exactly where the cars are and tell the customer the exact time period in which they
will be able to get their car.

DISTRIBUTIONAL CHANNEL HIERARCHY OF MARUTI

Maruti also by far has the biggest channel structure in the automobile sector in India. They
have one Head Office which is situated in Gurgaon, Haryana. Then they have 4 Zonal Offices
in four major cities namely- Delhi, Banglore, Mumbai and Kolkata. These cities are selected
on the basis of the four zones of India –North, South, West and East. Zone North is again
divided into 4 parts – N1, N2, N3, N4. These zones take care of the different regions of
Northern India. N1 handles Delhi/ NCR, Western U.P. N2 handles Punjab, J&K, Chandigarh.
N3 handles the rest of U.P. N4 takes care of Himachal and Haryana. Zone west takes care of
Mumbai, Pune, Ahmedabad, Jaipur. Zone South handles Banglore, Chennai, Cochin,
Hydrabad. Zone east includes Kolkata, Indore, Guwahati and Ranchi. These Zonal Offices
are subdivided into 16 Regional offices who have their offices in the above mentioned cities.
These regional offices are again subdivided into Area offices. This long chain of offices helps
Maruti reach customers all over India.

The company takes the payment from these dealers only in the form of advance payment. No
credit period is given for the dealers.
On an average 2600 cars are produced per day by Maruti. They also despatch about the same
amount of the cars to the dealers, which means they do not keep much stock with them. At an
average the order cycle time of the cars is about a fortnight.
The company provides a margin of about 5% per car to the dealers.

SETTING UP OF TARGETS
Targets are given to the wholesalers on the base of the amount of stock they lift from the
company. They have to lift a particular amount of cars.
For the retailers the targets are set through incentives. They can be given incentives on
particular cars or on the stock as a whole depending on the requirement of the company.

CRITERIA FOR SELECTING CHANNEL MEMBERS

• They should be able to understand the business model

• They should have a huge working capital
• Viability projections

TERMS & CONDITIONS FOR SELECTING CHANNEL MEMBERS

• Deposit a refundable deposit of Rs. 5 crore

Maruti Suzuki, due to its wide reach to the customers and awesome customer satisfaction are
able to still hold on to a position which is far ahead from others.
We can clearly see that Maruti is far ahead of its competition and contributes to almost half of
the market share of the automobiles in India.
Looking at the current situations, Maruti is expecting sales of another 15 million cars by
2012.

HYUNDAI MOTORS INDIA LTD.

The Hyundai Motor Company was established in 1967. It is a division of Hyundai Kia
Automotive Group, which is Korea’s largest and worlds fifth largest automobile maker in
terms of units sold per year. Its headquarters are in Seoul. Hyundai operates the world’s
largest integrated automobile manufacturing facility in Ulsan, which is capable of producing
1.6 million units annually. The company employees over 68000 people worldwide and its
revenues are approximately 30 billion. Hyundai has invested in manufacturing plants in the
North America, China, India, and Turkey as well as research and development centres in
Europe, North America, and Japan. In 2004, Hyundai Motor Company had $57.2 billion in
sales in South Korea making it the country’s second largest corporation, or chaebol.
Worldwide sales in 2005 reached 2,533,695 units, an 11 percent increase over the previous
year. Hyundai has set as its 2006 target worldwide sales of 2.7 million units.
In India, Hyundai Motors India was incorporated in May 1996. The groundbreaking
ceremony for the Chennai plant was held in December in the same year, and the first pilot
Santro was ready in a record-breaking 17 months. In the domestic market it clocked a growth
of 19.1 percent a compared to 2005, with 186,174 units, while overseas sales grew by 17.4
percent, with exports of 113,339 units. It recorded a sale of INR 178603 Million in the
financial year 2007-08.
In India, HMIL presently markets over 30 variants of passenger cars across six models, the
Santro and Getz in the B segment, the Accent in the C segment, the Elantra in the D segment,
the Sonata in the E segment and the Tucson in the SUV segment.

DISTRIBUTIONAL CHANNEL HIERARCHY OF HYUNDAI

Unlike Maruti, Hyundai has a relatively smaller chain of distribution channels. Even the
hierarchy is much smaller as compared to Maruti.
Hyundai has one head office in Delhi, four regional offices in North, East, West and South
and then come the dealers.

The company takes the payment from these dealers only in the form of advance payment. No
credit period is given for the dealers.
The company runs on a Pod lifting system, where they would despatch the cars as and when
they are produced. These despatches are directly sent to the dealers. They ferry their cars
through trucks/trailors and trains. Hyundai incurs a cost of about Rs. 9000-10000 per car for
their transportation. The cost also depends on the distance where they have to be delivered.
The company provides for different margins on different cars to the dealers. They provide for
Rs 10000-12000 on a Santro, Rs. 15000-18000 for a Getz, about Rs. 15000 on an Accent, Rs.
10000- 12000 on a i10, Rs. 18000 on Elantra and more than Rs. 20000 on Sonata.

SETTING UP OF TARGETS
Hyundai sets up monthly targets for dealers for specific cars. This can be done to push a
dealer to increase the sales of a specific car if the company wants.

CRITERIA FOR SELECTING CHANNEL MEMBERS

• Financial strength on the dealer

• Their goodwill in the particular area
• Their knowledge of business they would be doing
• The place should be contusive for their cars to be sold
Hyundai is one of the fastest companies in India to reach its break even point. It reached there
in just three years of its beginning. By this we can imagine the immense potential this
company has.

Even after about 12 years of its establishment in India, Hyundai still enjoyed a growth rate of
19% in the last financial year. The company is still growing but at a decreasing rate.
During Feb 07 the company recorded 49% increase in their sales, and in the very next month
in Mar 07 their sales went up by 74% - 25% hike in one month. This might be because of the
launch of their new car –i10.

FINAL ANALYSIS

QUESTION 1
As per our survey, out of the 250 customers we surveyed, 64% of them owned Maruti Swift
and 36% owned Hyundai Getz. This means 160 customers had swift and 90 customers had
Getz.

It clearly shows that Swift is the market leader in this segment.

QUESTION 2
As per out survey, about 13% of the customers learnt about their cars through newspapers,
36% through word of mouth, 43% through televisions and rest 8% through other sources like
showrooms, etc.
QUESTION 3
Out of the 250 customers, 192 people were satisfied with their car and were happy with the
money spent on their car. But there were 58 people who did not consider their car worth the
money they had spent on it. This means 77% of the people were happy with their cars and
33% of the people were not.

QUESTION 4
Out of the 250 customers, 185 people were satisfied with their dealers and 65 were not. This
means 74% of the customers were happy with their dealers and 24% of them were not.

QUESTION 5
How would you rate the services of your dealer?

MARUTI SWIFT

Very Good Satisfactor Bad

good y
30 % 60 9% 1
% %

HYUNDAI GETZ

Very Good Satisfactor Bad

good y
 10 % 65 21 % 4
% %

QUESTION 6
How do you rate the discount of special offers given by the dealers?

HYUNDAI GETZ

Very Good Satisfactor Bad

good y
8% 37 33 % 22
% %

MARUTI SWIFT

Very Good Satisfactor Bad

good y
7% 47 34 % 12
% %
RECOMMENDATIONS
MARUTI SUZUKI INDIA LTD.
As per our research, we did not find much wrong with the system of the company. But we
still have a few recommendations for the company.

• Customers complain about the waiting on some cars of Maruti. They claim that they
do not even receive the cars in the promised time by the dealers.
• Competitors like Hyundai are catching up fast and Maruti has to make plans for that.

HYUNDAI MOTORS INDIA LTD.

• Hyundai is falling short on the number of dealers as compared to Maruti.

• They also fall short in terms of reach to the customers in far away places.
• Many customers complain of faulty services of Hyundai service stations.
• Customers complain that they do not usually get what they are promised from their
dealers.
CONCLUSION

Indian market provides favourable demand conditions for the automobile sector to grow.
India has been experiencing a strong growth in the demand of automobiles and it is already
hub of the compact car segment. This has facilitated growth in the automobilesector both
directly and indirectly. Growth in demand has been because of many important factors
suchas the growth of the per capita income of a person which leads to better living standards
At the same time, consumer demand has boosted growth in India’s overall manufacturing
sector as well, which in turn has a positive impact on the automobile sector .
It has been noted in our research that Maruti’s sales and distribution channel system is far
more superior and complex than that of Hyundai. This could be as a result of the longer
existence of Maruti. But certainly, Maruti has been able to use its wide reach of outlets and
service stations very effectively, making it the largest automobile seller in India and by a huge
margin. Swift recently reached a figure of 2 lakh cars in just 3 years of its launch, the fastest
in the industry to do so. This is another mark in the success of Maruti.
Hyundai is a relatively new company in India, but it is one of the fastest growing companies
of India in the automobile sector. It reached its break even point in just three years and is still
maintaining a good growth rate. Hyundai has been successful in taking away some of the
market share of Maruti. Hyundai has already made a strong foothold in the Indian automobile
market.
Hyundai is already competeing with Maruti on many fronts. With the rate at which the
automobile sector is growing it is certainly a very booming sector. With companies like
Maruti, Hyundai, Ford, GM, Honda, Toyota etc. competing with each other, it is bound to
heat up even more. But it is for sure that the company which takes care of “Place” the most,
is most likely to win the car wars, and at the moment Maruti is leading the battle. It will not
come as any surprise for us, to see Hyundai coming very close to Maruti in terms of its
“place” factor.

ANNEXURE
Questionnaire
(Sales and Marketing department)

1. What type of sales organisation structure do you possess?

2. What are the various channel structures in which you operate?
3. What are the various criterion/terms and conditions of selecting your channel members?
4. What is the average Inventory Size you keep?
5. What is the average Order Cycle time?
6. What are the various modes of transportation adopted and cost incurred?
7. What are the methods of measurement and frequency of providing appraisals to channel
members?
8. What are the modes of by which you receive your payments:
i) Advance payment ii) Payment on Delivery iii) Credit payments

9. In case you provide the credit period, what is the time limit?

10. How frequently do you collect the feedback from your Channel members?
i) Weekly ii) Quarterly iii) Monthly

11. How will you rate and rank the following aspects of your Channel Members:
Excellent Very good Good Fair Poor
Dealer’s
Efficiency
 Timely payment
Transporters
behavior

12. What are the margins you provide to your Channel Members?
13. How do you assign targets to your sales personnel’s and what type of targets?

14. Do you support your Channel Members by promotional activities?

a) YES b) NO

If Yes, i) Number of Promotions.

ii) Timing of Promotions.

iii) Quantity of Promotions.

15. Have you ever gone for market research?

a) YES b) NO

If Yes, w.r.t. whom?

• Customers
• Channel Members
• General market survey
16. i) What type of market research was it?
ii) What was your budget?
17. How frequently you go for market research?

Name of Respondent: ……………………………………………………

Name of Organisation:……………………………………………………

Designation: ……………………………………………………

Address: …………………………………………………….

Tel. No.: …………………………………………………….

 Questionnaire
(For Dealer’s/Retailer’s/Franchisee)

1) Which car is most asked by the customer?

2) What is your average sales/month?
3) Which brand do you recommend to the customer and why?
4) Do you get any credit period from the company?
a) YES b) NO

If Yes, What is the credit period you get:

5) What is your average order size?

7) What are the margins that you get from the company?

8) What is the average order cycle time taken by the company?

9) Where would you rank the services/assistance provided to you by the company/s

Very Good Satisfactory Poor Very

Good poor
Delivery Time
Quality Maintenance
Incentives
Promotional activities
Condition of Product
Ease and Flexibility of placing
Order
Transporter’s Behavior
Customers Orientation
Commercial Terms
Services of Sales Persons

10) How will you rate the efficiency of your sales persons
a) Very Good b) Good c) Satisfactory d) Poor e) Very poor

11) Does company provides you with any assistance by means of promotional activities?

a) YES b) NO

If Yes, Numbers, Timing, Quantity of promotions.

12) Do you provide appraisals to your sales persons?

a) YES b) NO
 If Yes, on what Parameters?

_______________________________________________________________________

Person contacted: …………………………………………………………..

Name of dealer: ……………………………………………………………..

Address: ………………………………………………………………..

Tel. No.: …………………………

Questionnaire
(For Customer)
1. How would you rank the following outlets on the parameters given below:
V.Good Good Satisfactory Bad V.Bad

1 Reach of Maruti

Outlet Hyundai

2 Availability Maruti

of cars Hyundai

(test drive, sales)

3 Price Maruti

of cars Hyundai

4 Convenience Maruti

(facilities, etc) Hyundai

5 Special offers Maruti

like discount

cards Hyundai
6 Behaviour / Maruti

Helpfulness of

Staff Hyundai

1. Where did you learn about Swift\Getz?

a) Newspaper b) Word of Mouth

c) Television d) Any other Source

2. Is it worth the money that you spent on your car?

a) Yes b) No

3. What have you liked/disliked about your dealer?

4. Do you get what you are promised from your dealer?

Name:__________________________

Martial status:____________________

Age:____________________________

Occupation:______________________

Phone No:_______________________
Address:________________________