TEAM MEMBERS

Names Roll No.

SUNNY M. B. 03
POONAM D. 11
DIPESH K. 15
SHILPA S. 34
DHARMESH 20
SACHIN N. 26
 Indian Auto Industry
Facts
• Second Largest two wheeler manufacturer
in the world
• Largest tractor and three wheeler
manufacturers in the world
• Fourth largest Commercial vehicle market in
the world
• Eleventh largest passenger car market in
the world

Trends Growth Potential

• Growth of exports of 32.8 % FY 2008-09.
• Output of commercial vehicles has grown
2.8 times compared to the 2.2 times
increase in passenger cars
• For every passenger car turned out, there
are almost 7 two-wheelers produced
•Can become World’s third largest
automobile market in 2030.
•By 2016, Automotive sector can DOUBLE its
percentage contribution to GDP from current
levels of 5% (US$50 billion) to 10% ($180
billion).
 The Growth Journey
Pre 1983 1983-1993 1993-2007
Closed market Japanisation - GOI- Delicensing of sector in
Suzuki joint venture to 1993
form Maruti Udyog • Global major OEMs
• Growth of market start assembly in India
limited by supply • Joint ventures with (Toyota, GM, Ford,
• Outdated models companies in Honda, Hyundai)
commercial vehicles and • Imports allowed from
Players components Era of globalisation
April 2001; alignment of
• Hindustan Motors Players duty on components
and
• Premier and parts to ASEAN evolution of India
• Maruti Udyog levels as a global
• Telco • Hindustan Motors manufacturing hub
• Implementation of
• Ashok Leyland • Premier VAT
• Mahindra & • Telco
Mahindra
• Ashok Leyland
• Mahindra & Mahindra
Automotive Companies in India
Major Indian Companies Major Multi-national companies
 BRIEF HISTORY
• The time when scooters had a waiting period.
• 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.
• •MUL launched its first car Maruti800 on December 14, 1983 at
initial price of Rs. 47,500.Mr. Harpal Singh, the first Maruti owner,
still drives the car after 26 years.
• BRIEF HISTORY
 MARKETING STRATEGY OF MUL IN
LATE 1980’s
• Maruti was the first company in India which studied the consumer
demand and responded to it well.
• Market segmentation policy was adopted that targeted different type
of consumers with different type of models.
• Maruti800targeted medium income group, while the deluxe model
targeted rich income group.
• Maruti van targeted businessmen and doctors (ambulance)
• The Gypsy targeted the paramilitary forces and the police.
• This resulted in complete control of maruti over the market .
• The company advertised its different products according to
costumers.
• A special cell was made to make direct dealing of Gypsy with the
government & the army.
Maruti was introducing in Targeting middle
class Industry.
 Segmentation in Car Industry
• A segment (hatch back or small cars ) - 800, Alto, santro, Spark, WagonR n indica n i10 n etc

• A2 segment - Swift , Getz Uva

• B Segment - Fabia , Fusion , Esteem , Dzire , indigo / marina , Logan , ikon n accent etc!

• C Segment - Optra, Aveo , Fiesta , City , Verna, Sx4 , Cedia n etc

• C2 segment - Civic, Corolla , octavia n etc

• premium - Laura , Accord, Sonata , camry etc

• Luxury - BMW , Audis , merc's , n many more

• MUV - Safari , scorpio , SUmo grande, Tavera Innova etc

• Premium MUV/ SUV - Captiva , CRV, Tuscon , Grand Vitara etc

Maruti Product Life Cycle
 Introduction Stage
– Market share and growth is slight.
– Substantial research and development costs have been
incurred.
– Marketing costs may be high in order to test the market, undergo
launch promotion and set up distribution channels.
– Highly unlikely that companies will make profits on products.
– Example- A-Star, Swift Dezire
 Growth Stage
– Characterized by rapid growth in sales and profits.
– Profits arise due to an increase in output (economies of scale).
– Significant promotional resources are traditionally invested in
products that are firmly in the Growth Stage.
– Cheaper for businesses to invest in increasing their market
share.
– Example -Swift, Zen Estilo
 Maturity Stage
– Competition is most intense as companies fight to maintain their
market share.
– Any significant moves are likely to be copied by competitors.
– The Maturity Stage is the time when most profit is earned by the
market as a whole.
– Any expenditure on research and development is likely to
improve production efficiency and quality.
– Example -Alto, Wagon-R
 Decline Stage
– Market is shrinking, reducing the overall amount of profit.
– Possible to take out some production cost, to transfer production
to a cheaper facility, sell the product into other, cheaper markets.
– Depending on whether the product remains profitable, a
company may decide to end the product.
– Care should be taken to control the amount of stocks of the
product.
– Example -Baleno, Esteem
 The changing Auto Industry
• After year 2000,(and 2003 to be more precise) there was a change
in automobile market which where due to -1. The government has
reduced regulation on the industry and more foreign players were
invited.2. Banks and other financing companies started providing car
loans at reasonable interest rate. The changing Auto Industry THE
MAJOR FAULTS Impacts
• •The Indian consumer now started buying the mid-size cars rather
than small cars ,the luxury cars also gained popularity, SUV’s also
started coming in the market.
• •The increasing level of income of urban people ,the small cars were
not considered to be luxury item any more.
THE MAJOR FAULTS
• The MUL depended more on its M800 model, so when in late 1990’s
the new players like when Matiz, Santro and Indica came into the
market with more space and better comfort ,at same price, then
Maruti lost a major share of market.
• Maruti Suzuki was far behind in luxury and SUV car ,the other player
like GM, TATA, Mahindra , Mitsubhisi and Toyota were already
established in the market ,so replacing them was not easy.
 THE RESPONSE S OF MARUTI

• •To gain back its lost share Maruti launched Zen ,Alto and Wagon R. These small
segment car gained huge response for consumers.
• •Maruti also launched aggressive promotional policy to promote them like announcing
Zen as the “world’s car”.
• •Maruti also made a slogan “count on us”. To emphasize its reliability.
• •In 2003 Maruti came up with “change your life campaign", it provided vehicle
insurance at just Rs 1 to attract the customers. advertisement such as of Alto in
which a small boy says to his father ”papa kikaranpetrol khatamhi nahihonda” was
make customer feel that Alto was best fuel efficient.
• •During 2003 and 2004, MUL visualized and implemented a strategy for its dealers to
increase their profitability levels in view of increased competition. According to the
strategy, the 300 plus -odd dealers of the company were asked to strengthen their
manpower, increase the salaries of their sales agents, and offer them better
incentives.
• •'2599' offer-In 2004, MUL introduced the '2599' offer under which a consumer could
buy an M-800 by paying an EMI of Rs 2,599 only, for a period of seven years. The
down payment was fixed at Rs 40,000. MUL entered into an agreement with the
State Bank of India (SBI), the largest bank in India, to promote this scheme.
• THE RESPONSE S OF MARUTI
 THE RESPONSES (continued)
• •Promotion

• •Advertisements targeting different segments Promotional offers through out

the years Psychographics is used :• Wagon-R : Smarter people
(executives)• Omni : People who need to transport goods• Alto : Small car :
small family• Zen Estillo: Young trendy people

• •Supply Chain

• •The joint initiatives taken by Maruti and its team of suppliers have
generated over 29% cost reduction over three years for Maruti Less than 20
per cent of a car is manufactured in-house. The rest is accounted for by 215
suppliers and hundreds of second and third tier of vendors who, in turn,
supply to them.
 India : A Developing Hub for Compact Cars
 Compact cars account for 70% of the total car market.
 Compact car sales increasing at about 20% each year
 Excise duty on small cars slashed from 24% to 12% in last three years
 Maruti Suzuki :
• New car plant to make 250,000 cars per
annum (total 800,000 cars/annum)
• 10 new Component JVs to support new
Diesel Engine Plant.
 Hyundai :
 Already a big player in the small car segment
• Increase capacity to 600,000 cars per
annum over next 1 year.
 Nissan :
• Micra, UK  India
– Four more models in India, involving a total
investment of over Rs 2,000 crore.
 Ford :
• Plans to unveil its small car with 1.2 ltr
engine by 2010
 Honda :
 Investing US $ 250 million in a new plant in
Rajasthan with capacity of 60,000 car per
year (First car to roll out in 2009).
 Tata Motors :
Tata Nano became a big success gaining worldwide
popularity with Tata planning to increase capacity
 Toyota :
• Toyota Kirloskar motors planning to launch
its own small car in India by 2011
 General Motors :
• New Capacity to manufacture small cars at
its Talegaon, Maharashtra plant with 80%
local inputs.
Brought in Spark small car in 2007
 Nissan-Renault :
 50:50 JV, to make 400,000 cars a year with
an investment of over US $ 1 billion.
 Coming up with the $2500 car to compete with
Tata Nano in 2011
 VW :
• Investing 400 million euro in a new plant in
Pune. Operations are to start in second
half of 2009.