Introduction: Indian automobile Industry
The Automobile Industry in India is now working in terms of the dynamics of an open market. Many joint ventures have been set up in India with foreign collaboration, both technical and financial with leading global manufacturers. Also a very large number of joint ventures have been set up in the auto-components sector and the pace is expected to pick up even further. The Government of India is keen to provide a suitable economic and business environment conducive to the success of the established and prospective foreign partnership ventures.
History of automobile industry
With the invention of the wheel in 4000 BC, mans journey on the road of mechanized transport had begun. Since then he continually sought to devise an automated, labour saving machine to replace the horse. Innumerable attempts reached conclusion in the early 1760s with the building of the first steam driven tractor by a French Captain, Nicolas Jacob Cugnot. It was however left to Karl Benz and Gottlieb Damlier to produce the first vehicles powered by the internal combustion engine in 1885. It was then that the petrol engine was introduced, which made the car a practical and safe proposition. The cars in this period were more like the cars on our roads today. The cars came the era of speed. The first ever landspeed record was established about a 100 years back, in 1898. The Automobile Industry finally came of age with Henry Ford in 1914 for the bulk production of cars. This lead to the development of the industry and it first begun in the assembly lines of his car factory. The several methods adopted by Ford, made the new invention (that is the car) popular amongst the rich as well as the masses. Count Gaston de Chasseloup-Laubat of France drove an electric car (in Acheres near Paris) at a speed of 39.24 miles per hour. This flagged off the era of wheels racing , which lasted till 1964, after which jet and rocket -propelled vehicles were allowed. Then onwards, it has been one big journey...on the roads. Automobile industry, the business of producing and selling self-powered vehicles, including passenger cars, trucks, farm equipment, and other commercial vehicles. By allowing consumers to commute long distances for work, shopping, and entertainment, the auto industry has encouraged the development of an extensive road system, made possible the growth of suburbs and shopping centers around major cities, and played a key role in the growth of ancillary industries, such as the oil and travel businesses. The auto industry has become one of the largest purchasers of many key Industrial products, such as steel. The large number of people the industry employs has made it a key determinant of economic growth.
In 1953, the government of India and the Indian private sector initiated manufacturing processes to help develop the automobile industry, which had emerged by the 1940s in a nascent form. Between 1970 to the economic liberalization of 1991, the automobile industry continued to grow at a slow pace due to the many government restrictions. A number of Indian manufactures appeared between 1970-1980. Japanese manufacturers entered the Indian market ultimately leading to the establishment of Maruti Udyog. A number of foreign firms initiated joint ventures with Indian companies. Timeline of Indian automobile industry: 1897 First Person to own a car in India - Mr. Foster of M/s Crompton Greaves Company, Mumbai 1901 First Indian to own a car in India - Jamshedji Tata 1905 First Woman to drive a car in India - Mrs. Suzanne RD Tata 1905 Fiat Motors 1911 First Taxi in India 1924 Formation of traffic police 1928 Chevrolet Motors 1942 Hindustan Motors 1944 Premier Auto Limited 1945 Tata Motors 1947 Mahindra Motors 1948 Ashok Motors 1948 Standard Motors 1974 Sipani Motors 1981 Maruti Udyog
1994 Rover Motors 1994 Mercedes Benz 1994 Opel 1995 Ford Motors 1995 Honda SIEL 1995 Reva Electric Car Company 1995 Daewoo Motors 1996 Hyundai Motors 1997 Toyota Kirloskar Motors 1997 Fiat Motors (Re-Entry) 1998 San Motors 1998 Mitsubishi Motors 2001 Skoda Auto 2003 Chevrolet Motors (Re-Entry)
Analysis of automobile industry
SWOT Analysis A scan of the internal and external environment is an important part of the strategic planning process. Environmental factors internal to the firm usually can be classified as strengths (S) or weaknesses (W), and those external to the firm can be classified as opportunities (O) or threats (T). Such an analysis of the strategic environment is referred to as a SWOT analysis. SWOT analysis of the Indian automobile sector gives the following points: Strengths large domestic market Sustainable labour cost advantage Competitive auto component vendor base Government incentives for manufacturing plants Strong engineering skills in design etc Weaknesses Low labour productivity
High interest costs and high overheads make the production uncompetitive Various forms of taxes push up the cost of production Low investment in Research and Development Infrastructure bottleneck Opportunities Commercial vehicles: SC ban on overloading Heavy thrust on mining and construction activity Increase in the income level cut in excise duties rising rural demand Treats rising input costs rising interest rates Cut throat competition.
Major players in industry
All those people who are crazy about speed, automobile are indeed a prized possession for them. With the increased number of car and two wheeler loans and finance schemes available in today's market, it is not that difficult to purchase the same. However, if you have already decided to purchase a vehicle, then before the act of purchase, do get to know something about the key players who dominate this market. In terms of Car dealer networks and authorized service stations, Maruti leads the pack with Dealer networks and workshops across the country. The other leading automobile manufactures are also trying to cope up and are opening their service stations and dealer workshops in all the metros and major cities of the country. Dealers offer varying kind of discount of finances who in tern pass it on to the Customers in the form of reduced interest rates.
Eicher General Motors India Ford India Ltd BMW Tata Motors Ltd Yamaha Motors Bajaj Auto Hero Honda Ltd Mercedes Hindustan Motors Hyundai Motor India Ltd
TVS Motor Swaraj Mazda Ltd Ashok Leyland Audi AG Mahindra & Mahindra Ltd Nissan Motors Mercedes Benz Skoda Auto India Toyota Daewoo Motors
Company Profile
Maruti Suzuki is one of the leading automobile manufacturing companies in India. It is the market leader in the automobile industry both in terms of production and revenue generation. Initially the company was co owned by Suzuki of Japan and the Government of India until recently when the government decided to offer its shares to certain Indian financial institutions. The company which was initially known as Maruti Udyog Limited now came to be known as Maruti Suzuki India Limited. The company has many features to its hat, it is the largest manufacturer of passenger cars in South Asia, it was the first company in India to mass-produce and sell more than a million cars and it is also said to be the only automobile company which happened to bring in an automobile revolution in India. In October 2, 1982,
the company signed the license and joint venture agreement with Suzuki Motor Corporation, Japan. Maruti Udyog Limited was established in the year 1981 but it commenced productions from 1983 with the launch of the Maruti 800. With the launch of its first car only Maruti created a range in India. The car became synonymous with small families because of its price and features. Even after 25 years the car is still going strong in the automobile market with just a few up gradations. The company offers full range of cars from entry level Maruti 800 & Alto to stylish hatchback Ritz, A-star, Swift, Wagon R, Estillo and sedans DZire, SX4 and Sports Utility vehicle Grand Vitara. The company is engaged in the business of manufacturing, purchase and sale of motor vehicles and spare parts (automobiles). The other activities of the company include facilitation of pre-owned car sales, fleet management and car financing. They have four plants, three located at Palam Gurgaon Road, Gurgaon, Haryana and one located at Manesar Industrial Town. The company has seven subsidiary companies, namely Maruti Insurance Business Agency Ltd, Maruti Insurance Distribution Services Ltd, Maruti Insurance Agency Solutions Ltd, Maruti Insurance Agency Network Ltd, Maruti Insurance Agency Services Ltd, Maruti Insurance Agency Logistics Ltd and True Value Solutions Ltd. Maruti Suzuki has been the market leader of the Indian car market for over two decades now. The company manages to sell 730,000 cars annually in the domestic market and exports about 50,000 units across the world. In the past twenty five years it has diversified into various types of passenger cars catering to the need of different section of the population. With a net profit of Rs 687.53 crores in December 2009 as against Rs 213.57 crores in the year 2008 Maruti Suzuki still manages to dominate the automobile industry India.
Snapshot of Maruti Company
Incorporated
February 1981
Joint Venture October 1982 Agreement Equity Structure Sales (No of Cars)Financial year 2006-07 Sales (Net of Excise) INR 152.5 Financial year $ 3.499 Billion * 2006-07
Billion, Yen 423.675 Billion, 54.2% Suzuki, Japan, balance with Other Financial Institution and Public
674, 924 including 39,295 exports.
Profit After Tax INR 15.62 Billion, Yen 42.22 Billion, $ 358.34 Million * Financial year 2006-07 Employee Strength 4993 of Financial year 2006-07 Facilities
Gurgaon: 3 Manesar: 1 Head Office Regional offices: 16 vehicle assembly vehicle assembly in New Delhi, plants plant India
Diesel Plant
Powertrain Suzuki Powertrain India Limited (SPIL), Joint Venture
between Suzuki Motor Coroporation 70% Equity the rest is with Maruti Suzuki India Limited. Global hub for Diesel engines and transmissions for Suzuki worldwide. 15 Joint Venture companies, including Suzuki Limited for component supply. Powertrain India
Joint Venture Subsidiary Companies Product Portfolio
True Value: for sale and purchase of preowned cars Maruti Insurance: for insurance of Maruti vehicles (four companies) Maruti Finance: for financing Maruti vehicles 11 models with around 100 variants including: Maruti 800 Alto Swift Gypsy Versa Eeco Omni WagonR Zen Esteem SX4 Grand Vitara
Proposed Investments 2010 Network Financial 2006-07
tillRs), $ 2.25 Billion (1 $ = Rs 40) * Reach year
INR 9000 Crores i.e. INR 90 Billion, Yen 257 Billion ( 1Yen = 0.35
Sales 398 Outlets covering Service 2421 workshops covering Pre-owned Car Sales 242 dealers covering 148 cities
228 1193
cities cities
Time line of Maruti Company
1970 A private limited company named 'Maruti technical services private limited' (MTSPL) launched on November 16, 1970. The stated purpose of this company was to provide technical know-how for the design, manufacture and assembly of "a wholly indigenous motor car". 1971 In June, A company called 'Maruti limited' was incorporated under the Companies Act and Sanjay Gandhi became its first managing director. 1977
1978
'Maruti limited' goes into liquidation.
A commission of inquiry headed by Justice A. C. Gupta, which probed the 'Maruti scandal', submits its report.
1980 1981 The Indian Central government at the behest of Indira Gandhi salvages Maruti limited and starts looking for an active collaborator for this company. Maruti Udyog Ltd was incorporated under the provisions of the Indian Companies Act, 1956. 1982 License and Joint Venture Agreement (JVA) signed between Maruti Udyog Ltd. and SMC of Japan. 1983 Maruti 800, a 796 cc hatchback, Indias first affordable car, is released in the market. 1984 1985 Launch of Maruti Gypsy (970cc, 4WD off-road vehicle) Omni, a 796cc MUV, released. Installed capacity of the plant in Gurgaon, reaches 40,000 units Production was started under the JVA commences. On June, 23'rd, Sanjay Gandhi dies when a private test plane he was flying crashed.
1986 Maruti 800 (New Model-796cc, hatchback Car) 100,000 vehicles produced by the company. 1987 1988 1990 Maruti 1000 (970cc, 3 box), Indias first contemporary sedan is released into the market. Installed capacity is increased to 100,000 units in Gurgaon The company's first export, when a lot of 500 cars were sent to Hungary.
1991 65 percent of the components, for all vehicles produced, are indigenised (produced locally) Liberalisation of the Indian economy opens new opportunities but also brings more competition to segment. 1992 Suzuki increases its stake in Maruti to 50 percent, making the company a 50-50 JV with the Government of India the other stake holder. 1993
Zen (993cc, hatchback Car), which was later exported in Europe and elsewhere as the Alto
1994 Esteem1.3L (1298cc, 3 box car) LX released in market, Maruti's second sedan model. Produced the 1 millionth vehicle since the production commenced. The first company in India to do so. 1995 Esteem1.3L (1298 cc, 3 box car) VX released in market. Production of Maruti 1000 stopped. Second plant opened , installed capacity reached 200,000 units
1996 Five new models lunched: o Gypsy (E) (970cc, 4WD 8 seater) o Omni (E) (796cc, MUV, 8 seater) o Gypsy King (1298cc, 4WD, off road vehicle) o Zen Automatic (993cc, hatchback car) o Esteem 1.3L (1298 cc, 3 box Car) AX
Launch of 24-hour emergency on-road vehicle service, the first of its kind in the country.
1997
United Front government formed, Murasoli Maran new Industries Minister.
Government nominated Mr. S.S.L.N. Bhaskarudu as the Manging Director on August 27, as the then current Managing director, R.C.Bhargava, was completing his tenure. Creating a conflict with Suzuki
1998 Esteem (1299cc, 3 box car) LX, VX and AX models released. New Maruti 800 (796cc, hatchback Car) Standard and Deluxe released the first change in design since 1986.
1998
Two million vehicles produced.
Zen D (1527 cc diesel, hatchback car) model released. Zen VX & Zen VX Automatic model released. New (Omni & Omni E) (796cc, MUV) model released.
1999 Six new releases: o Maruti 800 EX ( 796cc, hatchback car)
o Zen LX (993cc, hatchback car) o Zen VXi (993cc, hatchback car with power steering) o Omni XL ( 796cc, MUV, high roof) o Baleno (1600cc, 3 Box Car) released. Advertised as 'Maruti Suzuki Baleno' o Wagon R launched in market. 2000 First car company in India to launch a Call Center for internal and customer services. New Alto model released. Altura, a luxury estate car released into the market. IDTR (Institute of Driving Training and Research) launched jointly with the Delhi government to promote safe driving habits 2001 Zen LXi Maruti True Value launched in Bangalore and Delhi Maruti Versa, Indias first luxury multi-purpose vehicle launched. Alto Spin LXi, with electronic power steering Alto Vxi Customer information centres launched in Hyderabad, Bangalore and Chennai
2002 WagonR Pride Esteem Diesel. All other variants upgraded Maruti Insurance. Two new subsidiaries started: Maruti Insurance Distributor Services and Maruti Insurance Brokers Limited 2003 New Suzuki Grand Vitara XL-7 Redesigned and all-new Zen New upgraded WagonR Enters into partnership with State Bank of India 4 million vehicles Produced since start of production. Maruti Udyog Ltd is listed on BSE and NSE after a public issue, which is oversubscribed 10 times. 2004 New (non A/C) variant of Alto released. Alto becomes India's new best selling car overtaking Maruti 800. Alto Spin LXi, with electronic power steering Special edition of Maruti 800, Indias first colour-coordinated car Maruti True value in Mumbai Maruti Finance in Mumbai with 10 finance companies Suzuki Motor Corporation (SMC) increases its stake in Maruti to 54.2 percent
LPG variant of 'Omni Cargo' Versa 5-seater, a new variant created Baleno LXi, a new variant created Esteem undergoes cosmetic changes and is re-launched with a price cut. Maruti Udyog closed the financial year 2003-04 with an annual sale of 472122 units, the highest ever since the company began operations 20 years ago
2005 2006 Indian car market leader Maruti Udyog on Feb 28, announced a price cut ranging between Rs 13,000-22,000 across five models, including M800 and Alto, following the cut in excise duty on small cars 2007 Maruti Udyog Limited has informed that Mr. Tsuneo Kobayashi, a non-executive director, has been appointed as Whole-time Director designated as Senior Joint Managing Director. The Board of Directors in their meeting held on 22nd January, 2007 has approved the above. UTI Bank and Maruti have joined hands for giving car finance. MUL unveils new WagonR in Punjab. Maruti Udyog Ltd has announced that the Company will unveil its stylish new Zen Estilo at a gala fashion show on New Delhi. The fiftieth lakh (5 millionth) car rolls out in April, 2005 Growth in overall sales by 15.8% Suzuki Swift (1298cc 87 BHP 4Dr Hatch) Introduced into the Indian Market.
Maruti Udyog Ltd on May 07, 2007 the Company has launched SX4 sedan, a bold, muscular and feature-packed car, powered by the global M-series engine and built on a brand new platform.
Maruti Udyog Ltd has informed that Mr. Shinichi Takeuchi, Joint Managing Director was serving the Company's Board in the capacity of nominee director of Suzuki Motor Corporation (SMC), Japan.
2008: 2009 2011 Kizachi car launchd. Eeco car launched in the market with petrol. Ritz car launched with dizel. Swift dzire launch with petrol & dizel.
