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INTRODUCTION


Introduction to Finance:

"Finance" is a broad term that describes two related activities: the study of how money is
managed and the actual process of acquiring needed funds. Because individuals,
businesses and government entities all need funding to operate, the field is often separated
into three sub-categories: personal finance, corporate finance and public finance.
All three categories are concerned with activities such as pursuing sound investments,
obtaining low-cost credit, allocating funds for liabilities, and banking. Yet each has its
own specific considerations. For example, individuals need to provision for retirement
expenses, which means investing enough money during their working years and ensuring
that their asset allocation fits their long-term plans. A large company, on the other hand,
may have to decide whether to raise additional funds through a bond issue or stock
offering. Investment banks may advise the firm on such considerations and help them
market the securities.
As for public finance, in addition to managing money for its day-to-day operations, a
government body also has larger social responsibilities. Its goals include attaining an
equitable distribution of income for its citizens and enacting policies that lead to a stable
economy.
Definition:
The science that describes the management, creation and study of money, banking, credit,
investments, assets and liabilities. Finance consists of financial systems, which include
the public, private and government spaces, and the study of finance and financial
instruments, which can relate to countless assets and liabilities. Some prefer to divide
finance into three distinct categories: public finance, corporate finance and personal
finance. All three of which would contain many sub-categories.


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The Inventory Concept
The dictionary meaning of the word inventory is Stock of goods. The term
Inventory refers to the commodities supplied to an undertaking for the purpose of
consumption in the process of manufacture or of rendering service or for transformation
into products.

To the finance executive, Inventory can be taken as the value of raw materials,
consumables, spares, work in progress and finished goods in which the companys
working capital funds have been invested.

Classification of Inventories
The Inventories in an Industrial concern is generally classified as following:

Raw material Inventory - This is used in manufacturing. When the demand
arises, they are drawn from stores and processed or use value is added during the
process and finally finished product comes out.

Semi finished goods - When the material being processed, it may have to wait
between two processes, such material are known as semi finished goods or semi
finished material or Work in process inventory.

Components - The parts used in assembly of product, are known as components.
When these components are purchased from outside, it is known as bought out
components or bought out material.

Spare parts Inventory - When manufacturing or servicing facility breakdown, it
is to be repaired. In such case, the defective or worn-out parts of the machine are to
be replaced by new one. These new parts of the machine are known as spares or
spare parts.

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Obsolete Inventory - When any facility becomes unserviceable, and it is to be
replaced by a new one, after replacing, the old machine/facility is to disposed.
Such machines, which have become useless, are termed as obsolete inventory.

Waste, Scrap and rejects - This type of inventory occurs in manufacturing firms
or in service organizations. While processing material, chips are produced and it is
of no use for the organization and it is to be disposed. Similarly, defective
components, which cannot be reprocessed (rejects) and materials which cannot be
used in any way in the organization (waste), all these are to be disposed. They may
not be having any use value for the organization, but they may be reprocessed by
some other organizations to produce a useful product.

Motives for holding Inventories
Economists have established three motives for holding inventories.
1. Transaction motive.
2. Precautionary motive.
3. Speculative motive.

Transaction motive Firms may require holding certain amount of finished products
perpetually in stock for display or demonstration purpose. They may also hold inventories
to meet a sudden demand, thus reducing the delivery tags.

Precautionary motive Firms may hold inventories for fear of stock outs and losing its
goodwill. Some of the precautionary motives give rise to safety stock to deal with
uncertainty in supply and demand.
Speculative motive A firm may also hold both raw materials and finished products
when it expects a price in future, thereby realizing a stock profit. Inventories held for
speculative motive are termed as profit-making inventory.

Of the three motives, precautionary motive requires much attention. Besides
accumulation of inventory due to the three motives mentioned above, inventories also get
accumulated because of inefficient management of working capital. This type of
inventory is called, flabby inventory.
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In addition, there may be a contractual reason for holding some inventories.

Contractual Requirements Occasionally it may be necessary to carry a certain level of
inventory to meet a contractual agreement. Some manufacturers require dealers to
maintain a specified level of inventory in order to be the sole representative in a particular
territory.

Inventory Management
Inventories represent a substantial amount of firms current assets. Proper
management of Inventory is necessary so that this investment does not become too large,
as it would result in blocking capital which could be used in productive aspect in
somewhere else.
Inventory Management covers efficient management of inventories in all its
aspects including Inventory planning and programming, Purchasing, Inventory Control,
receiving, ware Housing and Store keeping, Inventories handling and Disposal of scrap.
In this context of Inventory Management the firm is faced with the problem of
meeting two conflicting needs.

1. To maintain a large size of inventory for efficient and smooth production and
sales operations.
2. To maintain a minimum investment in inventories to maximize profitability.

The aim of Inventory management, thus, is to avoid excessive and inadequate
levels of inventories and to maintain sufficient inventory for the smooth production and
sales operations.









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An effective inventory management should

1. Ensure continuous supply of materials to facilitate uninterrupted production.
2. Maintain sufficient stocks of raw materials in periods of short supply and
anticipate price changes.
3. Maintain sufficient finished goods inventory for smooth sales operations, and
efficient customer services.
4. Minimize the earnings cost and time.
5. Control investment in inventories and keep it at an optimum level.

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OBJECTIVES OF INVENTORY MANAGEMENT

The objectives of the inventory management are discussed under two heads:
Operating objectives.
Financial objectives.

OPERATING OBJECTIVES
The Operating objectives of Inventory management is further divided as follows

Availability of materials
The first and the foremost of inventory management is make all types of
materials available at all times they needed by the production departments. So that the
production may not be held up for want of materials. It is therefore advisable to
maintain the minimum quantity of all types of materials to move on production
schedule.

Minimizing the wastage
Inventory management has to minimize the wastage at all levels that is during its
storage in the god owns or at work in the factory. Normal wastage, in other words
uncontrollable wastage, should only be permitted. Any abnormal but controllable wastage
should strictly be controlled. Wastage of materials by leakage, theft and spoilage due to
rust, dust or dirt should be avoided.

Promotion of manufacturing efficiency
The manufacturing efficiency of the enterprise increases if right types of raw
material are made available to production department at the right time. It reduces wastage
& cost of production & improves the moral of workers.

Better service to customers
In order to meet to the demand of the customers, it is the responsibility of
inventory management to produce sufficient stock of finished goods to execute the orders
received from customers.

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Optimum level of inventories
Proper control of inventories helps management to procure materials in right time
in order to run the plant efficiently. Maintaining the optimum level of inventories keeping
in view the operational requirements avoids the out of stock danger.

FINANCIAL OBJECTIVES
The Operating objectives of Inventory management is further divided as follows
Economy in purchasing
Proper inventory management system brings certain advantages and economies in
purchasing the raw materials. Management makes every attempt to purchase raw
materials in bulk quantity and to take advantage of favorable market conditions.
Optimum investment and efficient use of capital
The primary objective of inventory management, from financial point of view, is
to have an optimum level of investment in inventories. Inventory management has to
setup minimum and maximum levels of inventories to avoid deficiency or surplus stocks.

Reasonable prices
Inventory management has to ensure the supply of raw materials at a reasonable
low price, but without sacrificing the quality. It helps to reduction of cost of production
and improvement in the quality of finished goods in order to maximize the profits of the
organization.

Minimizing the costs
Minimizing inventory costs such as handling, ordering and carrying costs etc is
one of the main objective of inventory management. It helps in reduction of inventory
costs in a way that it reduces the costs per unit of inventory and there by reduction of total
cost of production.






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Inventory Systems

For an effective inventory management, an efficient inventory system should be
maintained. Thus the importance of inventory systems cannot be neglected in the
Inventory Management. The three important types of inventory systems available are
Periodic Inventory System.
Perpetual Inventory System.
Just-In-Time Inventory System.

Periodic Inventory System

In this system the quantity and value of inventory is found out only at the end of
the accounting period after having a physical verification of the units in hand.
The cost of materials used or goods sold is obtained by adding the total of
inventory purchased during the period to the value of the inventory in hand in the
beginning of the period and subtracting the value of inventory at the end of the period.

In this system the inventory level is not monitored at all during the time interval
between the orders, so it has the advantage of little or no required record keeping. The
disadvantage is less control.

Perpetual Inventory system

It is a system of tracking and knowing the value of inventory and quantity of
merchandise on hand at any time by tracking sales, returns and receipts with information
systems.
A positive feature of a perpetual system is that inventory level is continuously
monitored, so management always knows the inventory status. This is advantageous for
critical parts or raw materials and supplies. However, it can be costly.
The perpetual inventory system consists of:
1. Bin Cards.
2. Stores ledger.
3. Continuous Stock taking.
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Bin cards Bin cards are printed cards used for accounting the stock of material, in
stores. For every item of materials, separate bin cards are kept.

The details regarding the material such as the name of the material, the part
number, the date of receipt and issue, the reference number, the name of the supplier, the
quantity received and issued, the value of the material, the rate, the balance quantity, etc.
are recorded in the bin cards.

Stores ledger Like bin cards, a stores ledger is maintained to record all the receipts and
issues in respect of materials with the difference that along with the quantities, the values
are entered in the receipt, issue and balance columns.

Continuous stock taking The perpetual inventory system is not complete without a
systematic procedure for physical verification of the stores. The bin cards and the stores
ledger record the balances, but their correctness can be verified by means of physical
verification only.

Just-In-Time Inventory System
Now-a-days organizations are becoming more and more interested in getting
potential gains from making smaller and more frequent purchase orders. In other words,
they are becoming interested in just-in-time purchasing system.
In Just-In-Time system the materials arrive exactly when they are needed in the
production process. Inventory remaining in warehouse collects dust and cost instead of
revenue. Just-In-Time system avoids this cost.






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Costs for Holding Inventory

The three important costs considered in holding inventories are

Inventory Carrying Cost (or) Stock Holding Cost.
Procurement Cost or Setup Cost.
Shortage Cost or Stock-out Cost.


Inventory Carrying Costs or Stock Holding Costs

They arise on account of maintaining the stocks and the interest paid on the capital
tied up with the stocks. They vary directly with the size of the inventory as well as the
time the item is held in stock. Various components of the stockholding cost are:

Cost of Storage Space This consists of rent for the space occupied by the
inventory. Besides space expenses, this will also include heating, lighting and other
atmospheric control expenses.
Depreciation and deterioration They are especially important for fashion items
or items undergoing chemical changes during storage. Fragile items such as
crockery which are liable to damage, breakage, etc.
Pilferage Cost It depends upon the nature of the item. Valuable items may be
more tempting, while there is hardly any possibility of heavy casting or forging
being stolen.
Obsolescence Cost It depends upon the nature of the item in stock. Electronic
and computer components are likely to be fast outdated. Changes in design also led
to obsolescence.
Handling cost These include all costs associated with movement of stock, such
as cost of labour, overhead cranes, gantries and other machinery used for this
purpose.
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Procurement Cost or Setup Cost
They include the fixed and variable costs associated with placing of an order. In
case of purchase models it is known as ordering cost. In case of manufacturing model, it
is known setup cost.

To place an order certain paper work is to be done. The cost of this paper work is
taken as cost of ordering. In case of manufacturing, before starting production, the
machine is to be set up. Only on setting of machine, the material is loaded and the
production is started. The ordering cost is distributed over the items purchased in that
order. Similarly, the setup cost is distributed equally over the products manufactured in
that setup. This cost is also known as replenishment cost.

Shortage Cost or Stock-out Cost

These costs are associated with either a delay in meeting demands or the inability
to meet it at all. Therefore, shortage costs are usually interpreted in two ways. In case the
unfilled demand can be filled at a later stage (backlog case), these costs are proportional
to quantify that is short as well as the delay time. They represent loss of goodwill and cost
of idle equipment. In case the unfilled demand is lost (no backlog case), these costs
become proportional to only the quantity that is short. These results in cancelled orders,
lost sales, profit and even the business itself.










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TECHNIQUES OF INVENTORY MANAGEMENT

The following are the techniques of the inventory management

Economic order quantity.
ABC analysis.
VED classification.
HML Classification.
SDE Classification.
FSN Analysis.
SOS classification.
XYZ Analysis.
Golf classification.
MNG Analysis.


Economic order quantity
A firm should not place either too large or too small orders. On the basis of a
trade-off between benefits derived from the availability of inventory and the cost of
carrying that level of inventory, the appropriate or optimum level of the order to be placed
should be determined. The optimum level of inventory is popularly referred to as the
economic order quantity (EOQ). It is also known as economic lot size.
The economic order quantity may be defined as that level of inventory order that
minimizes the total cost associated with inventory management. i.e it refers to the level of
inventory at which the total cost of inventory comprising acquisition/ordering/set-up costs
and carrying cost is minimal.
EOQ = 2AO/C
A = Total annual requirement
O = Ordering cost per order
C = Convey in cost per unit
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ABC analysis
Usually a firm has to maintain several types of inventories. It is not desirable to
keep same degree of control on all the items. The firm should pay maximum attention to
those items whose value is highest. The firm should therefore classify inventories to
identify which items should receive the most effort in controlling. This classification is
done by the ABC analysis.

The ABC analysis technique is based is based on the assumption that a firm
should not exercise the same degree of control on all items of inventory. It should rather
keep a more rigorous control on items that are (i) the most costly, and/or (ii) the slowest-
turning, while items that are less expensive should be given less control effort.

On the basis of the cost involved, the various inventory items are categorized into
three classes:
i. A category.
ii. B category.
iii. C category.

Category A items -- More costly and valuable consumption items
are classified as A items. But the A category
items are very less in volume (generally 20%)
when compared to the total volume of
inventory.
Category B items -- The items having average consumption Value
items are classified as B items. But the A
category items are very avg in Volume
(generally 30%) when compared to the total
volume of inventory.
Category C items -- The items having less consumption Value items
are classified as C items. But the C category
items are very high in volume (generally 50%)
when compared to the total volume of
inventory.
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VED Classification
VED Vital, Essential and Desirable classification is applicable largely to spare
parts. Stocking of spare parts is based on strategies different from those of raw materials
because of there consumption pattern is different. Here the spare parts are classified in to
three categories.
Vital - The spares, the stock out of which even for a
Short time will stop the production.
Essential - The spares, the absence of which cannot be
Tolerated for more than a few hours or a day.
Desirable - The desirable spares are those spares which are
Needed but this absence for even a week or so will not stop
the production.
HML Classifications
The High, medium and Low (HML) classification follows the same procedure as
is adopted in ABC classification. Only difference is that in HML, the classification unit
value is the criterion and not the annual consumption value. The items of inventory
should be listed in the descending order of unit value and it is up to the management to fix
limits for three categories. For examples, the management may decide that all units with
unit value of Rs. 2000 and above will be H items, Rs. 1000 to 2000 M items and less
than Rs. 1000 L items.
The HML analysis is useful for keeping control over consumption at departmental
levels, for deciding the frequency of physical verification, and for controlling purchases.
SDE Classification
The SDE analysis is based upon the availability of items and is very useful in the
context of scarcity of supply. In this analysis, S refers to scarce items, generally
imported, and those which are in short supply. D refers to difficult items which are
available indigenously but are difficult items to procure. Items which have to come from
distant places or for which reliable suppliers are difficult to come by fall into D
category. E refers to items which are easy to acquire and which are available in the local
markets.
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The SDE classification, based on problems faced in procurement, is vital to the
lead time analysis and in deciding on purchasing strategies.
FSN Analysis
FSN stands for fast moving slow moving and non-moving. Here, classification is
based on the pattern of issues from stores and is useful in controlling obsolescence.
To carry out an FSN analysis, the date of receipt or the last date of issue,
whichever is later, is taken to determine the number of months, which have lapsed since
the last transaction. The items are usually grouped in periods of 12 months.
FSN analysis is helpful in identifying active items which need to be reviewed
regularly and surplus items which have to be examined further. Non-moving items may
be examined further and their disposal can be considered.
SOS Classification

Raw materials, especially agricultural inputs are generally classified by the
seasonal, off-seasonal systems since the prices during the season would generally be
lower.

The seasonal items which are available only for a limited period should be
procured and stocked for meeting the needs of the full year. The prices of the seasonal
items which are available throughout the year are generally less during the harvest season.
The quantity required of such items should, therefore, be determined after comparing the
cost savings on account of lower prices, if purchased during season, with the higher cost
of carrying inventories if purchased throughout the year.

A Buying and stocking strategy for seasonal items depend on a large number of
factors and more and more sophistication is taken place in this sphere and operational
techniques are used to obtain optimum results.


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XYZ Analysis
While the ABC analysis is based on the assumption on value, XYZ analysis is
based on the value of inventory undertaken during the closing of annual accounts. X
items are those having high value, Y items are those whose inventory values are medium
and Z items are those whose inventory values are low.
The percentages are similar to ABC analysis. This analysis helps find items with
heavy stock.

Golf Classification
The letter stands for Government, Ordinary, Local and Foreign. There are mainly
imported items which are channelized through the State Trading Corporation (STC)
Minerals and Metals Trading Corporation, etc. Indian Drugs and Pharmaceutical Ltd
(IDPL), Mica trading corporation etc. These are special procedures of inventory control
which may not applicable to ordinary items as they require special procedures.

MNG Analysis
The grouping of inventory items in this analysis takes place as:

M- Moving items The items which are consumed from time to time are normally
referred to as moving items.
N- Non moving items These items which are not and consumed in last one year
are covered under this group.

G- Ghost items This group refers to such items which neither have been
received nor issued during the year. The balance of such items shown in stock
registers of the organization will be nil, both at the beginning and at the end of the
previous financial year.





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Advantages of Inventory Management

The advantages gained by the firm by managing the inventory effectively are:
Introduction of a proper inventory management system helps in keeping the
investment in the inventories as low as feasible.
Ensures availability of material by providing adequate protection against
uncertainties of supplies and consumption of materials.
Allows full advantage of economics of bulk purchases and transportation.
Leads to reduction in inventory levels.
Releases more of capital for other operations.
Adequate customer service.
Advantage of price discounts by bulk pricing.
Providing flexibility to allows change in production lines due to changes in
demands on any other reason.
Even out the workloads on the soaps in the face fluctuations demands.


Causes of poor Inventory Management
There are certain instances, which leads to poor inventory management. They are:
1. Over buying without regard to the forecast or proper estimate of demand to take
advantage of favorable market.
2. Over production or production of goods much before the customer requires them.
3. Over stocking may also result from the desire to provide better service to the
customers. Bulk production or purchase to cut down production costs also will
result in large inventories.
4. Cancellation of orders and minimum quantity stipulations by the suppliers may
also give rise to large inventories.



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Various stock levels in Inventory Management

The levels of inventory in any organization depend upon several factors including
social, political, economic, ethic, fiscal, governmental policies at the global and national
levels, which determine the demand and supply parameters of an item. At the unit level,
cost, criticality, availability, service level, stock out, lead time, powers of delegation,
consumption pattern, etc. affect the levels.

The various stock levels fixed for effective management of inventories are -
Minimum level.
Maximum level.
Ordering or reordering level.
Danger level.

These levels serve as indices for initiating action on time so that the quantity of
each item of material, i.e. the inventory holding is controlled or managed. Stock levels are
not fixed on a permanent basis but are liable to revision in accordance with the changes in
the factors determining the levels.

Minimum level It indicates the lowest figure of inventory balance, which must be
maintained in hand at all times, so that there is no stoppage of production due to non-
availability of inventory.


The main considerations for the fixation of minimum level of inventory are as follows:

1. Information about maximum consumption and maximum delivery period in
respect of each item to determine its reorder level.
2. Average rate of consumption for each inventory item.
3. Average delivery period for each item. This period can be calculated by averaging
the maximum and minimum period.


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The formula used for its calculation is as follows:

Minimum level of Inventory = Reorder level (Average rate of
consumption * Average time of Inventory delivery).



Maximum Level It indicates the maximum figure of inventory quantity held in stock at
any time.
The important considerations which should govern the fixation of maximum level
for various inventory items are as follows:

1. The fixation of maximum level of an inventory item requires information about its
reorder level. The reorder level itself depends upon its maximum rate of
consumption and maximum delivery period. It in fact is the product of maximum
consumption of inventory item and its maximum delivery period.
2. Knowledge about minimum consumption and minimum delivery period for each
inventory item should also be known.
3. The determination of maximum level also requires the figure of economic order
quantity.
4. Availability of funds, storage space, nature of items and their price per unit are
also important for the fixation of maximum level.
5. In the case of imported materials due to their irregular supply, the maximum level
should be high.


The formula used for its calculation is as follows:
Maximum level of Inventory = Reorder level+ Reorder quantity
(Minimum consumption * Minimum reorder period)


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Reorder level This level lies between minimum and maximum levels in such a way
that before the material ordered is received into the stores, there is sufficient quantity on
hand to cover both normal and abnormal consumption situations. In other words, it is the
level at which fresh order should be placed for replenishment stock. The reorder level
must be sufficient to cover the maximum possible consumption of stock during lead time
(reorder period).

It is set after consideration of the following factors.
1. Rate of consumption.
2. Minimum level.
3. Lead time, i.e. delivery time.
4. Variation in lead time.


The formula used for its calculation is as follows:

Reorder level = Maximum reorder period * Maximum Usage.

Danger level It is the level at which normal issues of the raw material inventory are
stopped and emergency issues are only made.

Danger level = Avg consumption * Lead time for emergency purchases

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Objectives of Inventory Valuation
The objectives of inventory valuation are discussed here below as follows

Determination of Income - The valuation of inventory is necessary for
determining the true income earned by business during a period.
Determination of Financial position - The inventory at the end of period is to be
shown as a current asset in the balance sheet of the business. In case of the
inventory is not properly valued the balance sheet will not disclose the correct
financial position of the business.

Methods of Inventory Valuation
Since Inventory is the single largest asset in the balance sheet of most
organizations, the valuation of inventory becomes of utmost importance and crucial to the
financial executives.

Methods of Valuation of Inventories
The different methods used for valuation of inventories may be enumerated as
follows

Methods based on Actual cost
First-in-First-out method.
Last-in-First-out method.
Highest-in-First-out method.
Specific identification price.
Base stock price.
Adjusted selling price.

Methods based on Average cost
Simple average price.
Weighted average price.


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Methods based on Actual cost
The methods of actual cost are as follows -
First-in-First-out Method The First-in-First-out Method of pricing materials is
based on the assumption that the materials which are purchases first are issued
first. The flow of cost of materials should also be in the same order.

Last-in-First-out Method This method is just reverse of FIFO. It operates on
the assumption that the latest received materials are issued first for production and
those received first issued last. The price of the last lot of materials received is
used for all the issues until all units from this lot have been issued after which the
price of the previous lot received becomes the issue price.

Highest-in-First-out method Under this method, the highest priced materials
are treated as being issued first. The closing inventory is kept at the lowest possible
price. It is undervalued in times of rising prices and thus secret reserves are
created.

Specific identification price The specific identification method may be used for
inventories of items that are not ordinarily inter-changeable, or for goods
manufactured for a specific purpose. This method is best suited for job order
industries which carry out individual jobs or contracts against specific orders.

Base stock price The base stock formula proceeds on the assumption that a
minimum quantity of inventory (base stock) must be held at all times in order to
carry on business. Inventories up to this quantity are stated at the cost at which the
cost at which the base stock was acquired.

Adjusted Selling price Under this method which is adopted by retailers,
inventory is estimated at selling price and to value it at cost, the estimated gross
profit is deducted there from. The alternative approach is to deduct current sales
from the total goods available for sale at retail price. This gives the value of
Inventory.

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Methods based on Average cost
The methods of average cost are as follows

Simple average price Simple average price is the average of the prices without
any regard to quantities. Simple average price is calculated by adding up different
prices and then dividing by the number of different prices.

Weighted average price method Weighted average price is calculated by
dividing the total cost of material in stock by the total quantity of material in hand.
Under this method, prices are averaged after weighting (i.e. multiplying) by their
quantities. The average price at any time is simply the balance value figure divided
by the balance units figure.


EXECUTIVE SUMMARY

Satisfaction is a persons feeling of pleasure or disappointment resulting
from a comparing perceived performance in relation to his or her
expectation. If the performance falls short of expectation, the consumer is
dissatisfied. If the performance matches the expectations, he consumer is
satisfied. If the performance exceeds expectation, the customer is highly
satisfied or delighted.

The study widely concentrates on the level of satisfaction amongst customers
for which I did Exploratory Research to check the satisfaction level amongst
the customers of Suzuki Access 125. This research was conducted in the
Ahmedabad city. This research was done during the months of April and
May. Hence the data displayed has been collected during the before
mentioned period.

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To meet the research objectives, following activities have been performed.

An extensive search of relevant literature from news articles, internet,
books. This step guided the development of the methods and
instruments for collecting data.
Designing the questionnaire.
Survey has been carried away by, one-on-one interviews. The Survey
included open-ended questions, dichotomous questions, and multiple-
choice question.
To know the image of product in the mind of consumer.
To compare the level of satisfaction before purchasing and after
purchasing the Scooter.
To find out where people want to see the promotion schemes
To find out suitable location preferred by consumer
To know the most popular media for advertisement
To check the loyalty of the consumer towards the Suzuki brand
To know the most motivating factor for purchasing the bike
To know the preferable price from the customer
During this research it was found that Suzukis launched Access 125
has increased its market share by attracting new customers and helped
to retain its old customers.
SMPIL, a company that is known for combining technology, quality and
performance in their two wheeler, had taken an initiative to introduce some
of their performance driven two wheeler in India this year. Suzuki has
reported a growth of 47.66% in sales in the month of December 09 at
14806 units compared to 9986 units same month last year. This increase of
sales is attributed to the tremendous response from the new product GS150R
and ACCESS 125. Suzuki would have to constantly innovate and come up
with new products to maintain its dominance in the segment
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BIRTH OF AUTOMOBILES IN THE WORLD

The History of the automobile actually began about 4,000 years ago
when the first wheel was used for transportation in India. Several
Italians recorded designs for wind-driven vehicles. The first was
Guido da Vigevano in 1335. It was a windmill-type drive to gears and
thus to wheels. Vaturio designed a similar vehicle that was also never
built. Later Leonardo da Vinci designed clockwork-driven tricycle
with tiller steering and a differential mechanism between the rear
wheels.

In the early 15
th
century, the Portuguese arrived in China and the
interaction of two cultures led to a variety of new technologies,
including the creation of a wheel that turned under its own power. By
the 1600s, small steam-powered engine models were developed, but it
was another century before a full-sized engine-powered vehicle was
created.
26 | P a g e

A Catholic priest named Father Ferdinan Verbiest is credited to have
built a steam-powered vehicle for the Chinese Emperor Chien Lung in
about 1678. There is no information about the vehicle, onl y the event.
Since James Watt didnt invent the steam engine until 1705, we can
guess that this was possibly a model vehicle powered by a mechanism
like Heros steam engine-a-spinning wheel with jets on the periphery.

Although by the mid-15
th
century the idea of a self-propelled vehicle
had been put into practice with the development of experimental
vehicles powered by means of springs, clockworks, and the wind,

Nicolas-Joseph Cugnot of France is considered to have built the first
true automobile in 1769. Designed by Cugnot and constructed by
M.Brezin, it is also the first vehicle to move under its own power for
which there is a record. Cugnots three-wheeled steam-powered
vehicle carried four persons and was meant to move artillery pieces. It
had a top speed of a little more than 3.2 km/h (2 mph) and had to stop
every 20 minutes to build up a fresh steam.
Evans was the first American who obtained a patent for a self -
propelled carriage. He, in fact, attempted to create a two-in-one
combination of a steam wagon and a flat -bottomed boat, which didnt
receive any attention in those days. During the 1830s, the steam
vehicle had made great advances. But stiff competition from railway
companies and crude legislations in Britain forced the poor steam
vehicle gradually out of use on roads.
Carl Benz and Gottlieb Daimler, both Germans, share the credit of
changing the transport habits of the world, for their efforts laid the
foundation of the great motor industry, as we know it today. First, Carl
27 | P a g e

Benz invented the petrol engine in 1885 and a year later Daimler made
a car driven by motor of his own design and the rest is history.
Daimlers engine proved to be a great success mainly because of its
less weight that could deliver 1000rpm and needed only very small
and light vehicles to carry them.

France too had joined the motoring scenario by 1890 when two
Frenchmen Panhard and Levassor began producing vehicles powered
by Daimler engine, and Daimler himself, possessed by the automobile
spirit, went on adding new features to his engine. He built the first V-
Twin engine with a glowing platinum tube to explode the cylinder gas-
the very earliest form of sparking plug.

Charles Duryea built a motor carriage in America with petrol engine in
1892, followed by Elwood Haynes in 1894, thus paving the way for
motorcars in that country.


For many years after the introduction of automobiles, three kinds of
power sources were in common use: steam engines, gasoline or petrol
engines, and electric motors. In 1900, over 2,300 automobiles were
registered in New York, Boston, Massachusetts, and Chicago. Of
these, 1,170 were steam cars, 800 were electric cars, and only 400
were gasoline cars.

In ten years from the invention of the petrol engine, the motorcar had
evolved itself into amazing designs and shapes. By 1898, there were
50 automobile-manufacturing companies in the United States, a
number that rose to 241 by 1908. In that year, Henry Ford
28 | P a g e

revolutionized the manufacture of automobiles with his assembly-line
style of production and brought out the Model T, a car that was
inexpensive, versatile, and easy to maintain.


Herbert Austin and William Morris, two different carmakers,
introduced mass production methods of assembly in the UK, thus
paving the way for a revolution in the automobile industry. Austin
Seven was the worlds first practical four-seater baby car which
brought the pleasures of motoring to many thousands of people who
could not buy a larger, more expensive car. Even the bull -nose
Morris with front mounted engine became the well -loved model and
one of the most popular cars in the 1920s.

Automobile manufacturers in the 1930s and 1940s refined and
improved on the principles of Ford and other pioneers. Cars were
generally large, and many were still extremely expensive and
luxurious; many of the most collectible cars date from this time. The
increased affluence of the United States after World War II led to the
development of large, petrol-consuming vehicles, while most
companies in Europe made smaller, more fuel-efficient cars.







29 | P a g e

INDIAN TWO WHEELER HISTORY

India is the second largest manufacturer and producer of two-wheelers in the
world. It stands next only to Japan and China in terms of the number of two-
wheelers produced and domestic sales respectively. The Indian two-wheeler
industry made a small beginning in the early 50s when Automobile
Products of India (API) started manufacturing scooters in the country.
Until 1958, API and Enfield were the sole producers.

In 1948, Bajaj Auto began trading in imported Vespa scooters and three-
wheelers. Finally, in 1960, it set up a shop to manufacture them in technical
collaboration with Piaggio of Italy. The agreement expired in 1971. In the
initial stages, API dominated the scooter segment; Bajaj Auto later overtook
it. Although various government and private enterprises entered the fray for
scooters, the only new player that has lasted till today is LML.


Under the regulated regime, foreign companies were not allowed to operate
in India. It was a complete seller market with the waiting period for getting a
scooter from Bajaj Auto being as high as 12 years. The motorcycles segment
was no different, with only three manufacturers viz Enfield, Ideal Jawa and
Escorts. While Enfield bullet was a four-stroke bike, Jawa and the Rajdoot
were two-stroke bikes. Enfield 350cc bikes and Escorts 175cc bike initially
dominated the motorcycle segment.

The two-wheeler market was opened to foreign competition in the mid-80s.
And then market leaders - Escorts and Enfield - were caught unaware by the
onslaught of the 100cc bikes of the four Indo-Japanese joint ventures. With
the availability of fuel-efficient low power bikes, demand swelled, resulting
30 | P a g e

in Hero Honda - then the only producer of four stroke bikes (100cc
category), gaining a top slot.

The first Japanese motorcycles were introduced in the early eighties. TVS
Suzuki and Hero Honda brought in the first two-stroke and four-stroke
engine motorcycles respectively. These two players initially started with
assembly of CKD kits, and later on progressed to indigenous manufacturing.
In the 90s the major growth for motorcycle segment was brought in by
Japanese motorcycles, which grew at a rate of nearly 25% CAGR in the last
five years. The industry had a smooth ride in the 50s, 60s and 70s when the
Government prohibited new entries and strictly controlled capacity
expansion. The industry saw a sudden growth in the 80s.
It was in the year 1954 that the Indian government ordered for total number
of 800 motorcycles to man the Pakistani borders. In came the Bullets which
were initially launched in England as a 350cc bike and it was upgraded to
500cc a year or so later. These bikes have remained unaltered, barring some
cosmetic changes which have undergone over the years. Thus one can say
without much of a doubt that the 1955 Bullet was one of the initial hits of the
Indian two-wheeler industry and till today it continues to be a darling of the
motorcycle enthusiasts.

Enfield Bullet had a close competition with another sturdy bike named
Rajdoot; as the bike was strong enough to handle the rough Indian roads.
The company had roped in Indian Heman Dharmendra for the promotion of
the bike. With more than 1.6 million vehicles on the road the Rajdoot
motorcycle was one of the initial hits of the earlier years of two-wheeler
history in the country.

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When heavy motorcycles were the order of the day, a relatively lighter bike
had caught on the imagination of the Indian two wheeler user. Ind- Suzuki
bike launched by the then TVS Suzuki group was an instant hit; however the
bike could not sustain it's initial success due to the high import content in the
vehicle and less of localization.

In scooters Bajaj Chetak has been hugely responsible for adding momentum
to the transport system of the country, till today it remains one of the most
successful brands to have come out of the Bajaj stable. The scooter is named
after the horse of legendary Rana Pratap Singh. These sets of two wheels
have become a part of the Indian milieu and are often considered a
representative of the Indian middle class aspiration. Very few two-wheelers
have been able to emulate the success, which Bajaj Chetak has achieved over
the years.

Similarly LML Motors enjoyed a reasonable success with the launch of
LML Select which came with new age technology and improved
performance.

The industry witnessed a steady growth of 14% leading to a peak volume of
1.9mn vehicles in 1990.
In 1990, the entire automobile industry saw a drastic fall in demand. This
resulted in a decline of 15% in 1991 and 8% in 1992, resulting in a
production loss of 0.4mn vehicles. Barring Hero Honda, all the major
producers suffered from recession in FY93 and FY94. Hero Honda showed a
marginal decline in 1992.
The reasons for recession in the sector were the incessant rise in fuel prices,
high input costs and reduced purchasing power due to significant rise in
32 | P a g e

general price level and credit crunch in consumer financing. Factors like
increased production in 1992, due to new entrants coupled with the recession
in the industry resulted in company either reporting losses or a fall in profits.

India is one of the very few countries manufacturing three-wheelers in the
world. It is the world's largest manufacturer and seller of three-wheelers.
Bajaj Auto commands a monopoly in the domestic market with a market
share of above 80%, the rest is shared by Bajaj Tempo, Greaves Ltd and
Scooters India. a variometric scooter helped in providing ease of use to the
scooter owners.


SEGMENTATION OF TWO WHEELER:
A Two Wheeler Sector Sub-Segmenting in the three Segments
.
Motorcycle
Scooter
Mopeds


TREND IN 2W VOLUMES BY CATEGORY:







33 | P a g e

TREND IN 2W SALES VOLUMES, DOMESTIC AND
EXPORTS:























Domestic Market Share for 2013-14
Passenger Vehicles 15.86
Commercial Vehicles 4.32
Three Wheelers 3.58
Two Wheelers 76.23
34 | P a g e

GROWTH PROSPECTS AND KEY DRIVERS OF INDIAN
TWO WHEELER INDUSTRY:

The growth witnessed by the Indian two wheeler industry
indicates the growing demand for low cost personal
transportation solutions amongst the 300 million Indian middle
class consumers. Despite this spectacular growth rate, the two-
wheeler penetration (number of two wheelers per 1000
inhabitants) in India remains lower than other Asian countries.
This fact provides an opportunity for continued growth in the
market. India has the lowest Penetration of two wheelers as
compared to countries like Taiwan, Thailand, Malaysia,
Vietnam, Indonesia and China. In the present scenario, growth
in the two wheelers Industry will be driven by several factors

RISE IN INDIAS YOUNG WORKING POPULATION:

With the rising levels of per capita income of people, the Indian two wheeler
market offers a huge potential for Growth. This growth is relevant in the
light of the fact that 70 per cent of Indias population is below the age of 35
Years and 150 million people will be added to the working Population in the
next five years. The number of women in the urban work force is also
increasing; this will lead to the Growth of gearless scooters.





35 | P a g e

RISE OF INDIAS RURAL ECONOMY AND GROWTH IN
MIDDLE INCOME HOUSEHOLDS:

The growth prospects of the Indian rural economy offer a significant
opportunity for the motorcycle industry in India. The penetration of
motorcycles amongst rural households with income levels greater than US$
2,200 per annum has already increased to over 50 per cent. The current target
Segment for two wheelers, i.e., households belonging to the Income category
of US$ 2,20012,000 is expected to grow at a CAGR of 10 per cent.

GREATER AFFORDABILITY OF VEHICLES:

The growth in two-wheeler sales in India has been driven by an increase in
affordability of these vehicles. An analysis of the price trends indicates that
prices have more or less stagnated in the past. This has been part of the
marketing strategy adopted by the manufacturers to gain volume, as well as
conscious efforts adopted to bring down costs. The operating expenses of
leading manufacturers have declined by around 15 per cent in the last five
years. With greater avenues of financing, the customers capacity to own a
two wheeler has improved.

RAPID PRODUCT INTRODUCTION AND SHORTER PRODUCT LIFE CYCLE:
The last five years have witnessed a sharp increase in new product launches
in the two-wheeler industry. It is estimated that close to 50 new products
have been launched by manufacturers during this period, filling up all price
points and targeted at various consumer segments.
INADEQUATE PUBLIC TRANSPORT SYSTEMS IN MOST URBAN AREAS:
The economic boom witnessed in the country and the increased migration to
urban areas have increased the traffic congestion in Indian cities and
worsened the existing infrastructure bottlenecks. Inadequate urban planning
36 | P a g e

has meant that transport systems have not kept pace with the economic boom
and the growing urban population. This has increased the dependence on
personal modes of transport and the two wheelers market has benefited from
this infrastructure gap.

FACTORS AFFECTING THE MARKET:

Post 1991, the Indian two-wheeler industry comprising of motorcycles,
scooters and scooterettes opened up tremendously. The Indian motorcycle
industry has expanded at a 24% CAGR over the last five years, It Captured
almost 80% of the market primarily at the cost of the scooter and Moped
segment. The scooter segment though has witnessed a revival with the
launch of scooterettes aimed at young women and adolescents.
The two-wheeler market can be segmented into three categories on the basis
of price Entry segment (<35000), Executive segment (between 35000 and
45000) Deluxe (between 45000 and 65000) and Premium segment (above
65000). Motorcycles are now sold as a passion, experience rather than a
product. New products are being introduced at a rapid pace and brands are
gaining prominence. Thus there is an increased focus on the premium
segment, which has an increased scope for differentiation.

Purchasing Power is relatively high with buyers becoming more
discriminating. Reliability and economy have become more of a hygiene
factor. Buyers now demand two-wheelers that fit their personality thus
increasing the scope for differentiation and branding. Provision of financing
through EMIs has provided a means to satisfy the need of possess a
convenient and stylish mode of transport in the form of a two-wheeler. This
has resulted in higher growth in the 125-150cc segment.

37 | P a g e

With the introduction of Government policies such as reduction in excise
duty from 16% to 12% and allowing for 100% FDI Barriers to entry has
reduced. However, the investment required for setting up large distribution
channels and service stations can be a major entry barrier. Another
significant entry barrier is the brand building required. Thus, initially foreign
players set up Joint Ventures with indigenous companies. After establishing
their brand they have launched their own line of products. E.g. Honda with
Hero Group and Yamaha with Escorts.
RISING CUSTOMER EXPECTATIONS:

The growth witnessed by the Indian two wheeler industry has
attracted a number of new entrants to the market and it is
expected that the Indian industry will become more
competitive in the future. The excess of products introduced in
the past has also raised customer expectations with respect to
reliability, styling, performance and economy.
Inflation is a big factor that may play a part in moving the
loyalties and aspirations of people away from the four to the
much cheaper and economical two-wheeler segment.
Moreover, the constantly increasing prices of oil and increasing
interest rates on finance are not helping the cause either.
Environmental Concerns are also quite big on the agenda these
days and do play a part in the preference of consumers
choices. The rising global temperatures along with daily
snippets in the national and international media about the
thinning of ozone and imminent environmental disaster have
38 | P a g e

all contributed to the making of a present day environmentally
conscious consumer.




ENVIRONMENTAL AND SAFETY CONCERNS:

The increasing demand for two wheelers will need to be managed to address
issues relating to overcrowding of roads. Another problem is the insufficient
infrastructure for inspection to ensure adherence to emission norms. As the
industry grows, it is important to regulate the sale of used two wheelers in a
more organized manner for which a mechanism needs to be evolved.
Unregulated sale of two wheelers, especially in the rural areas, are likely to
create issues related to emissions and safety of vehicles.



39 | P a g e

SUZUKI MOTORCYCLES GLOBAL HISTORY

In 1909 Michio Suzuki founds the Suzuki Loom Company in Hamamatsu,
Japan. He builds industrial looms for the thriving Japanese silk industry.
1937 To diversify activities, the company experiments with several
interesting small car prototypes, but none go into production because the
Japanese government declares civilian automobiles non-essential
commodities at the onset of WWII.

In 1952 when due to financial problems Suzuki ventured into developing
clip on engines to bicycle frames. The first model was called the Power Free
(36cc) and the follow-up model was the Diamond Free (60cc). Suzuki
produced its first motorcycle in 1954 called the Colleda (90cc). Suzuki built
small capacity bikes during the 50s and 60s and had only small export
success until the introduction of the X6 (T20 super six), which gave Suzuki
much name credibility. In 1962 Using MZs technology, Suzuki wins the
newly created 50cc class in the World Championship.
The company will win the class every year until 67, and win the 125cc class
twice in that period, too. With a well-established name Suzuki dared enter
the big bike market and in 1967 Suzuki introduced T500. Which was known
as the Titan in America and the Cobra in England? The name changed over
the years to GT500 due to many improvements but it was purely the sharp
price and good reliability, which kept the GT in production until 1977.

In 1971 The GT7The Water Buffalo was introduced in 1971 in America and
the Kettle in Britain - both the same GT750 bike and the start for Suzuki to
enter the super bike market. The GT750 wasn't a very impressive machine
and also couldn't match the other bikes in the market at the time. Once again
the production kept going based on its demand for good price and reliability.
40 | P a g e

In 1974 The RE5 is the first Japanese motorcycle with a rotary engine. It
cost a fortune to develop and, while not bad, its a commercial disaster. After
two years, the company abandons the project, and there are rumors the
tooling was dumped into the sea so that Suzuki managers would never have
to see it again. Most bikes produced around the middle 70s had enough
power but lacked a steady frame. The introduction of the Suzuki GS1000 in
1978 changed this problem once and for all. The GS out preformed every
other bike in its category and had a frame to match its power. The only thing,
which could be said against the very popular and successful GS1000, was its
dull looks.
The GS1000 was redesigned and new models based on the same original
success bike were introduced. The GSX1000 in 1980 and the GSX1100S
Katana in 1982. The later bike was a huge success due to it powerful
performance, funky style, low weight and good pricing. In 1983 The RG250
is Suzukis first ever race replica. This bike features the AL-BOX, square
aluminum frame, 16-inch tire and Anti Nose Dive Forks (ANDF) at the
front. In 1985 The RG500 Gamma features the same square-Four cylinder
layout as the as the factory Grand Prix bikes. Other racy features are the
square-tube aluminum frame and the removable cassette-type transmission.
Suzuki pulled a stunt within the motorcycle market by introducing the GSX-
R750, which was such a direct copy of their formula race bike with the only
difference that this GSX was, road legal. It turned the super sport motorcycle
market upside down and dominated the way super bikes would look for the
future. The GSX-R750 was super fast, which wasn't hard to understand since
there were hardly any changes to its racetrack design. Both on the street and
in the race track the bike was a huge success. In 1986 the GSX-R1100 was
also added to the line.

41 | P a g e

In 1996 Suzuki calls the new GSX-R750 the turning-point model thanks to
its twin-spar frame instead of the older double-cradle frame. The engine is
also redesigned and featured 3-piece crankcases, chrome-plated cylinders
and a side-mount cam chain as well as Suzuki Ram Air Direct (SRAD)
system.

In 1997 The TL1000S is the first Suzuki sport bike with a V-Twin engine. It
will be followed a year later by a racier R version, with a dodgy rotary vane
damping system in the rear shock. Suzuki equipped the TL1000R with a
steering damper, but it was still prone to headshake and customers
approached it with caution, if at all.

In 1999 Mat Mladin wins the AMA Super bike Championship, beginning a
run of unprecedented dominance. Mladin will win five more times, and
Suzuki will win 8 of the next 9 titles. With sport bikes getting more and
more sharp edged, the company is one of the first to recognize what might be
called the semi-sport market, as opposed to the super sport market. The
SV650 features an aluminum-alloy truss frame and a liquid-cooled 90 V-
Twin DOHC 4-valve engine. Suzuki calls the Hayabusa the ultimate
aerodynamic sportbike. Its powered by a 1298cc liquid-cooled DOHC in-
line 4-cylinder engine that becomes the darling of land-speed racers. The
name means peregrine falcon in Japanese.

The GSX style and line didn't change much over all the years with
improvements being made to the bike. A small fluke in design made Suzuki
lose its performance lead with the GSX-R1100. But the GSX-R750 has
remained a hit up until today. Maybe still hurt by losing the performance
edge with the GSX-R1100 redesign in the 1990s Suzuki introduced the
GSX-1300R (Hayabusa) in 1999. This sent the Honda Blackbird packing
42 | P a g e

and became the world's fastest production bike at a whopping 190 mph (307
km/h).

In 2001 Suzuki introduced an upgrade GSX-R750 engine and created the
GSX-R1000 (998cc), which is a super bike with outstanding performance. In
2003 the GSX-R1000 was restyled but still kept its position as a super class
bike.

In 2005 Suzukis original 4-stroke motocross, the RM-Z450, is equipped
with a 4-stroke 449cc engine, which features the Suzuki Advanced Sump
System (SASS). Troy Corser gives Suzuki its first and only (so far) World
Super bike Championship.
In 2006 The M109R, Suzukis flagship V-Twin cruiser is powered by a
1783cc V-Twin engine with 112mm bore and 90.5mm stroke. It has the
largest reciprocating pistons in any production passenger car or motorcycle.

In 2008 The B-King is launched, powered by the 1340cc Hayabusa engine;
the B-King is Suzukis flagship big Naked bike. Suzuki says it has the top-
ranked power output in the naked category.







43 | P a g e

SUZUKI MOTORCYCLES INDIA HISTORY
Suzuki Motorcycle India Pvt., Ltd. engages in manufacturing two wheelers.
The companys products include motorcycles and scooters. It offers its
products through a network of dealers. The company was incorporated in
1997 and is based in Gurgaon, India. Suzuki Motorcycle India Pvt., Ltd.
operates as the subsidiary of Suzuki Motor Corp.
Suzuki Motor Corporation (SMC), a global giant of motorcycle
manufacturing is headquartered in Japan. It holds major stake in its Indian
subsidiary, Suzuki Motorcycle India Private Limited (SMIL). SMIL was set
up after Suzuki's re-entry into the Indian two-wheeler market after it severed
ties with partner TVS in 2000-01. Suzuki was then the technology provider
in the erstwhile joint venture company TVS Suzuki.
Suzuki Motorcycle India Pvt Ltd (SMIPL) is the latest entry into the already
crowded Indian two-wheeler segment with players like Hero Honda, Bajaj
Auto, Honda, and TVS. SMIPL have started their Indian operations with a
125-cc mass-market motorcycle. It has made an initial investment of Rs. 200
crores to start their Indian operations.
Company sources have revealed that Suzuki would follow up this 125cc bike
with a high performance 150-cc sibling sometime next year. And for the
budget segment, another 100cc bike is expected in the first quarter of 2006.
Mass market is the initial aim with plans to enter all the segments rapidly.
They have their facilities located in Gurgaon.
Suzuki had launched bike by diwali, which is the auspicious time for buying
a new vehicle in Indian families. Their setup in Gurgaon has the capabilities
of manufacturing one lakh motorcycles and they are ready to step that up
massively if the situation arises. They already have setup 40 dealerships
44 | P a g e

around the country and are going to establish 4,000-5,000 sq.ft showroom
and service stations to provide services to the customers.
The parent company happens to be one of the largest manufacturers of two
wheelers in the world with more than 20 lakh bikes sold per annum. They
are popular for their range of high performance road machines, lightweight
super bikes, dirt bikes, street bikes, and motocross and fun bikes globally.








45 | P a g e

COMPANY PROFILE
Plant area and production capacity:

They have installed their manufacturing plant in Gurgaon (Haryana) having
the annual capacity of 2,50,000 units. Total land area of the facility at Gurgaon
is 37 acres out of which the present plant is constructed in an area of 6.5 acres
of land. The remaining area of 30.5 acres is left for land development and
future expansion.

Chairman:
Mr. Katsumi Takata

Personnel over the years
Year 2013-14
Total number of employees 490

Main Products
Motorcycles and scooters


Head Office, Plants & Facilities
Name Address Operations
Suzuki Motorcycle India Pvt
Ltd
Factory Office
Village Kherki
Dhaula, Badshahapur,
N.H.-8, Link Road,
Gurgaon.
Fax No. - 0124-4170
701

Regd. Office Sales &
Marketing Office
2nd Floor, Plot No. 1,
Nelson Mandela Road,
Vasant Kunj,
New Delhi -110 070
Fax No. - 011-4607
5418
Head office affairs

Motorcycle engines assembling and
machining

Spare parts administration

Education, training and
Public relations

Research and development
Testing and development of motorcycles


46 | P a g e

MISSION OF SUZUKI
The core philosophy of SUZUKI is to provide VALUE-PACKED
PRODUCTS. Since the founding of SUZUKI Motor Corporation, the
Organizations Endeavour has always been to provide VALUE-PACKED
PRODUCTS as one of the manufacturing philosophies.
SUZUKI believes that VALUE-PACKED PRODUCTS come from the
effort to carry out Product development from customers point of view. This
policy has been in effect since Companys inception and has helped the
Organization to meet customers needs. As a result, Suzukis Products have
become well received throughout the World.
SUZUKI is fully committed to create Products that meet customers demand
by utilizing its dynamic, long-nurtured technological advantage coupled with
its fresh and active human resources.

Develop products of superior value by focusing on the customers
Establish a refreshing and innovative company through teamwork
Strive for individual excellence through continuous improvement






47 | P a g e

GROWTH REPORT:
It has reported a growth of 47.66% in sales in the month of November 13
at 14745 units compared to 9986 units same month last year.
It has sold 14806 units in December 13 listing a strong growth of 61%
over its sales in December 12 despite recession. This increase of sales is
attributed to the tremendous response from the new product GS150R and
ACCESS 125.
It has reported 93% growth in sales during the month of January 2014. It
has sold 20441 units in January 10 listing a strong growth of 93% over its
sales in January 09.
It has sold 21752 units in March 14 listing an impressive growth of 76%
over its sales in March 13. This increase of sales is attributed to the
tremendous response from the new product GS150R and ACCESS 125.
It has great plans for the coming year and this is only the beginning. Their
objective is to offer quality products and customer satisfaction to consumers.
This growth momentum will further accelerate in coming months.






48 | P a g e




SMPIL GROWTH REPORT IN 13-14


OEMs 2012-13 2013-14 GROWTH
BAL 9,692 3,759 -61.22%
HHML 1,53,193 2,08,440 36.06%
HMSI 6,54,319 7,39,947 13.09%
KINETIC 5,522 - -100.00%
M&M 2W - 70,008 0.00%
SMIL 85,782 1,40,983 64.35%
TVS 2,39,469 2,99,370 25.01%
TOTLE 11,48,007 14,62,507 27.40%
49 | P a g e

FACILITIES
1 ) ENVIRONMENT:
The philosophy of keeping environment first is properly percolated
downwards. To comply with all applicable legislations and setting standards
thereof remains only a beginning. Company thrives to discover and invent
mechanisms for better environment management systems and its a
continuous process which is managed by a separate wing of experts and
specialist in the field.
The biggest testimony of Suzukis commitments towards environment first
is seen at Gurgaon which is built to be a Zero discharge plant.
SMIPL have embraced Natural light optimization system and water
harvesting systems besides several other measures to create better and
cleaner environment around us. All packaging material used by Suzuki is re-
cycleable. A constant flow of internal communication on environment
related issues not only creates awareness amongst employees but also helps
in inculcating an environment friendly value system.

2) SHOP FLOOR SAFETY MEASURES:
SMIPL have safety guards/safety curtains to ensure Operator safety on
machines. Company has also installed robots through out the facilities to
reduce the ergonomic stress on workers. There are gas detection systems
installed to eliminate any gas related accident and fire detection system for
immediate information about any fire related incident.


50 | P a g e

SMIPL have fire fighting system (manual & automatic) for immediate
handling of any fire related accident. They have a fire tender (capacity 4500
liters water and 500 liters capacity foam).

Company try to maintain zero accident record through regular safety audit,
frequent training for staff, line associates and contractors. They organize
different safety programs and competitions to encourage employee
awareness and involvement.

3) ENVIRONMENTAL UTILITY:
To take care of the health of all our employees, they maintain all
international parameters and standards for drinking water, treated water,
ambient air shop floor, office and the outside. They keep updating all these
standards of health and welfare of employees through a team of well
qualified personnel in the R & D laboratory.

4) QUALITY CONTROL :
It has four main sections as follows:
Tested by SMC Japan with their international quality standards
Final (Vehicle) Inspection
Market Quality




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5) PARTS INSPECTION:
The non conformities in the parts being procured may lead to
production loss & degradation of the quality of the final output and
life of the product. To ensure the product, the dimensional, material,
aesthetic & performance inspection for the special processes are
carried out on the individual parts before they are declared fit for the
assembly
For carrying out the inspection activities effectively, we have the latest
& sophisticated machines installed in the inspection area
6) FINAL (VEHICLE) INSPECTION:
Safety related parameters such as braking; clutch operation and other
functional defects of the vehicle
Emission related parameters for checking the conformance of the
exhaust gases with the emission rules
Functional & aesthetic parameters are also checked
7) MARKET QUALITY:
To act upon the customers feedback received from the service
department for the up gradation of the product
To resolve the quality issues being received from the market by
visiting the suppliers & taking the corrective & preventive measures
for the same
Monitoring for the effectiveness of the measures taken for the
particular problems through the cut off engine/ frame numbers.

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8) WORK CULTURE:
They believe that future growth and prosperity of every employee
depends on the companys growth and prosperity
Organizational and individual discipline
Continual improvement in quality and productivity
Cost consciousness
Customer satisfaction ( both internal and external )
Long term goals
Respect for laws, human beings and society
9) EMPLOYEE DEVELOPMENT:
Company's growth is based on enhancement of technical and behavioral
skills of the employees. They continually identify the performance gaps and
new skills required keeping into the company's growth in focus. They
believe that Employees are the most important assets of an organization. For
enhancement of technical and behavioral skills of the employees they
organize regular training programmers. Teams from Japan often come to the
organization to impart training. Their focus is to create a healthy
Environment where individual employee can achieve maximum satisfaction.




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PRODUCTS OF SUZUKI MOTORCYCLES
SUZUKI ACCESS 125CC






Suzuki launched the Access 125cc in the month of September 2007. In those
days, Access 125 was the third product from Suzukis stable in India. Prior
to this, Heat and Zeus motorcycles were ruling the Suzuki showrooms PAN
India.
Suzuki Access 125 is the third product from the Suzuki stable in India after
Heat and Zeus motorcycles. 125cc Access is powered by a 125-cc air-cooled
four-stroke engine with Continuous Variable Transmission (CVT), which
develops 8.5bhp at 7000rpm with 1.0kgm of torque at 5000rpm. The design
is typically Japanese, almost flat aprons where large turn indicators are
embedded. Though it has a longer wheelbase access looks compact because
of this design. No body colored mirrors for this access. Paint quality is of top
notch.




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SUZUKI ACCESS 125 FEATURES:
Xtra Torque Performance (XTP) for more power and faster pick-up
Telescopic front fork suspensions for comfortable riding
Tail lights that are trendy and attractive
Wider seat for comfort riding
Large size underseat compartment
Centralized ignition key switch, with shutter
Smart built-in signal
Multi-reflector lights for better visibility
Stylish, Chrome-plated silencer cover
SUZUKI ACCESS 125 TECHNICAL SPECIFICATIONS:
Dimensions And Dry Mass
Overall length 1780 mm
Overall width 650 mm
Overall height 1125 mm
Wheelbase 1250 mm
Ground clearance 160 mm
Seat height 780 mm
Dry mass 109 kgs

Engine
Type Four-stroke, Air-cooled,OHC
Number of cylinders 1
Displacement 124 cm
3
(cc)
Max Power 6.4 Kw@7000rpm
(8.58hp@7000rpm)
Max Torque 9.8Nm@5000rpm (1.0kg-
m@5500rpm)
Air cleaner Non-woven fabric element
Transmission CVT
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Starter system Self & Kick Self
Suspension
Front Telescopic
Rear Swing-arm
Brake
Front Drum brake (130 mm)
Rear Drum brake (130 mm)

Tyre Size
Front 90/100-10
Rear 90/100-10

Electrical
Spark plug CHAMPION P-RZ9HC
Battery 12V, 5Ah
Headlamp 12V 35/35W
Fuel Tank : Capacities
Tank capacity 6.4 L
Underseat space 20 L










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SUZUKI GS150R







The 150cc Segment is picking up in India. Suzuki has been a little
conservative till now with its bike models. Zeus and Heat and not extra
ordinary, but it sells enough to be seen here and there a while. The company
took another step ahead with the Access 125 Scooter. Suzukis foray into
this segment is expected to be create similar impact in the segment with the
GS150R.
The engine of the Suzuki GS150R is said to be convenient for riding in the
city. The 150cc engine respires through a BS26 carburetter. It comes with
Throttle Positioning Sensor (TPS). GS150R's 149cc engine develops
13.8bhp of peak power at 8500rpm and 13.4Nm of peak torque 6000rpm.
According to Suzuki, GS150R will return a mileage of 48kmpl in City and
55kmpl in Highway.
The engine uses engine balancer technology to minimise vibration and
comes with a rubber damper and a balancer shaft. It has a digital
speedometer which shows gear position, fuel level, speed, odometer,
tripmeter and the tachometer is a neat dial adjacent to the digital console.

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Name: GS150R
Type: Commuter
Top Speed: 120kph
Fuel Consumption:
City
48.00
Fuel Consumption:
Highway
55.00

ENGINE SPECIFICATIONS
Displacement: 149cc
Engine:
Four Stroke, Single
Cylinder, SOHC
Maximum Power: 13.8 Bhp @ 8500 rpm
Maximum Torque: 13.4 Nm @ 6000 rpm
Gears: 6 Manual
Bore: 57
Stroke: 58.6
No. of Cylinders: 1
Cylinder
Configuration:
SOHC
Valve Per
Cylinder:
2
Cooling Type: Air Cooling
Carburetor:
BS26 - Throttle
Positioning Sensor

DIMENSIONS
Length: 2095.00 mm
Width: 775.00 mm
Height: 1120.00 mm

OTHER SPECIFICATIONS
Weight: 134.00 kg
Ground Clearance: 160.00 mm
Fuel Tank: 15.50 ltrs
Wheelbase: 1340.00 mm
Headlamp:
Multi Reflector Halogen
Bulb
Wheel Type: Die Cast Alloys
Wheel Size: 2.75x18 - 100/90-18 mm
Tubeless: NO
Colors:
Pearl nebular black,
Metallic flint gray, Candy
max orange & Candy dark
greenish blue.

ACTIVE AND PASSIVE SAFETY
Suspension(Front):
Telescopic, Coil Springs, Oil
Damped
Suspension(Rear):
Swing Arm Type Coil
Spring, Oil & Gas Damped
Brakes: Hydraulic Single Disc
Brakes(Rear): 130mm Drum
Stand Alarm: NO

COMFORT AND CONVENIENCE
Fuel Guage: Digital
Self Start: YES
Tacho Meter: Analogue
Trip Meter: Digital-1
Alloys: YES
Speedometer: Digital
Passenger
Footrest:
YES
Passenger
Backrest:
NO
Step-up Seat: YES
Pass-light: YES
Low Fuel
Indicator:
YES


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SUZUKI ZEUS 125CC







Suzuki Zeus, the latest bike from Suzuki Motorcycles India Pvt Ltd has been
launched. The 125cc single cylinder Suzuki Zeus comes at a price of f Rs
46,084. The bike had a soft launch earlier this year.
Besides Suzuki Zeus, Suzuki India has another motorcycle in the Indian
market, called Suzuki Heat. Both Zeus and Heat are part of Suzuki's attempts
to come back to the Indian market, which it had left in the late 90s. During
its earlier Indian coming, Suzuki partnered TVS for its two-wheeler
business.

Suzuki Zeus, packed with latest technology and styling, is an entry level bike
from Suzuki Motor Corporation. Zeus has a unique cut-line front cowl for a
much stylished, dynamic look. The bike is available in Zeus 125X and
125XU models.
Suzuki Zeus will be available in three colors, the company said. These are
Candy Antares Red (19A), Metallic Titanium Gold (YM3) and Pearl
Nebular Black (YAY). To manufacture Suzuki Zeus and Suzuki Heat, the
company has invested Rs 200 crore at its Gurgaon manufacturing plant. The
production capacity of the plant is 100,000 bikes per annum.
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SUZUKI ZEUS 125CC FEATURES:
Powerful Disc Brakes (front, asbestos-free)
Bright and Big multi-reflector Halogen Head Lamp for better visibility
at night and make a dashing style statement.
Convenient Shift indicator for adjusting fuel efficiency on different
gears.
Advanced and Stylish Instrument Panel with Tachometer
Uniquely styled front cowl for a dynamic look.
Stylish Under Cowl for engine protection and making a style
statement.
Advanced 5-speed Gearbox for a smoother and comfortable ride.
Robust all Aluminium Engine with large fins and upright cylinder for
superb cooling and style.
Primary Kick & Auto Decompression System for effortlessly starting
the engine in any gear.
Stylish and large fuel tank.
Ergonomic seat design for easy ground access and minimum knee
bending.
Helmet Holder to take the load off your head after you park the bike.
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VEHICLE SUMMARY
Name: Zeus 125
Model: XCD
Type: Commuter
Top Speed: 101kph

ENGINE SPECIFICATIONS
Displacement: 124cc
Engine:
Four-stroke, Air-cooled,
OHC
Maximum Power: 8.5 Bhp @ 7500 rpm
Maximum Torque: 10 Nm @ 3500 rpm
Gears: 5 Speed
Clutch: Wet Multiplate type
Bore: 53.5
Stroke: 55.2
Cylinder
Configuration:
NA
Engine Block
Material:
NA
Chassis Type: NA
Cooling Type: Air Cooling
Carburetor: NA

DIMENSIONS
Length: 2040.00 mm
Width: 770.00 mm
Height: 1125.00 mm




OTHER SPECIFICATIONS
Weight: 114.00 kg
Ground Clearance: 155.00 mm
Fuel Tank: 12.00 ltrs
Wheelbase: 1240.00 mm
Electrical System: NA
Headlamp: NA
Battery Type: 9.0 KC 10HR
Battery Voltage: 12V
Battery Capacity: 2.5 Ah
Horn: NA
Wheel Type: Alloys
Wheel Size: 2.75x18 - 3.00x-18 mm
Tubeless:
Colors: NA

ACTIVE AND PASSIVE SAFETY
Suspension(Front):
Telescopic, Coil spring,
Oil damped
Suspension(Rear):
Swing-arm type, Coil
spring, Oil damped
Brakes: Disc
Brakes(Rear): Drum 130mm
Stand Alarm:

COMFORT AND CONVENIENCE
Fuel Guage: Analogue
Self Start:
Tacho Meter: Analogue
Trip Meter: Analogue-1
Alloys:
Warranty: NA
Speedometer: Analogue
Passenger Footrest:
Passenger
Backrest:

Step-up Seat:
Pass-light:


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SUZUKI HAYABUSA





Suzuki bring the Hayabusa motorcycle to India. The Hayabusa official
nomenclature is GSX 1300R will pave the way for Suzukis foray into the
superbike segment in India. Competition, however, has already arrived in the
shape of Yamaha and Ducati motorcycles in India.
Powered by a 1340cc in line 4 cylinder engine, the Suzuki Hayabusa is likely
to sport a price tag of Rs 11 lakh. The bike was launched in the first week of
September 2008. Suzuki also launched a second superbike, the GSX-R 1000
in November.
Although boasting of a top speed of 397 km per hour as per recorded figures,
the bike that will come to India will have a speed limit of 299 km per hour.
Company think that the higher figure here is from some world record
attempts, while 299 km ph would be the official top speed. Do keep in
though that superbike or not, speed limits in most parts of India are at 60
kmph, and may go up to 100 km ph on some of the expressways.
Suzuki expects only a sale of around 150 units of the Hayabusa in India per
annum.




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SUZUKI WARRANTY POLICY

Suzuki Motorcycle India Private Limited, (SMIPL) offers warranty for all
models manufactured in its Gurgaon plant and sold through its authorized
dealers. Suzuki Motorcycle India Private Limited reserves the right either to
replace or repair, at their authorized dealer, free of cost, those parts which
may be found on examination to have manufacturing defect within 2 years
from the date of sale (or) first 30,000 kms whichever occurs earlier of its
operation.
If any of the free or paid service is not done as per schedule, the warranty
tends to stand void. Parts of the vehicle have been subjected to misuse,
accident, and negligent treatment, use of bad quality parts which are not
manufactured (or) not recommended for use by SMIPL on their motorcycles.
Parts of the motorcycle getting rusted or their plating or painting coming off
due to atmospheric condition like Sea Breeze and Industrial Pollution.

Motorcycle used for any Competition (i.e.) Rallies (or) Races, if it is used for
any commercial purposes like Hiring etc. SMIPL undertakes no liability in
the matter of any consequential loss (or) damage caused due to failure of the
parts. Parts repaired (or) replaced under this warranty are warranted only for
the original warranty period of Suzuki motorcycles. Consumables like
Engine Oil, TFF Oil, Grease, used for the warranty repair are not covered
under the application of the warranty.


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APPLE AUTO AGENCY

This Show room has its separate service center, also have a latest
service center with all semi -automatic instruments. It maintains a
unique and regular checking of each and every bike to increase a
satisfaction level of the customers.

It strictly watches and tries to lesser the time of a customer while
they give bike in to service. Mostly Customer when come to give
his bikes in service, the service procedure of the showroom is
very less and smallest so that customer will free within 5
Minutes.




Gate Entry

Receive by Service Advisor

Job Card Entry (Opening)

Estimation of Exp.

This Procedure will take just only 5 Minute then after Service of
the Bike is done.

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SERVICE PROCEDURE

























WASHING THE BIKE
MECHANICS / ENGINEER
(BIKE WISE)
SPARPART REQUICISION
(IF REQUIRED)
SPAREPART
DEPART.
FITTING OF SPARPARTS &
COMPLETE FORTHER
PROCESS
TESTING ON
ROAD
SUPERVISOR
DELIVERY TO THE
CUSTOMER
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SELLING SCHEME & RESULT:

Selling scheme is a Dealers Scheme that is useful to attract the
customer towards the showroom to purchase new bike. This all
selling scheme provided to the customer is within Rs.2000. Such
Selling Scheme are:

RTO Free
Insurance Free
Petrol Free Up to some K.M or some Rupees.
Reference Sales
DSS (Door Sales Service)
Exchange (It is a Major tool of Scheme/Conversion)




SELLING OF SHOW ROOM:

Every showrooms goal is to increase the sales. The APPLE
AUTO AGEENCY has a great sales of bike through providing
different scheme, facility and services to the customer. The
Following figures are approximate:

Daily 6 vehicles
Monthly 160 Vehicles
Yearly 1920 Vehicles.
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LIMITATIONS




This research is geographically restricted to Bangalore only.
Hence the result cannot be extrapolated to other places.
The study is restricted only to the organized sector of two wheeler
industry
The seriousness of the respondents and their ability to justify their
answers may also be a limitation.
The sample size is small due to the specified reasons.
Findings are based on sample survey.
All interview questions are undisguised or direct. Hence there is a
scope for the respondents to be biased or pretentious.
During the survey most of the respondents contacted had newly
purchased the motorcycle thus they could not respond accurately
i.e. their satisfaction level and defects in the motorcycles.
The research is directly concerned with the study of human
preference and behavior and achieving absolute mathematical
accuracy towards this was not possible.







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RECOMMENDATIONS


The Suggestions that are given by customers and we give
suggestions as a market researcher for Improving in a service,
advertisements. Because after selling of a vehicle customer may
has some of the problem and customer come for solve their
problem through service and company should try to give proper
service to satisfy customer by solving their problem. The
suggestions are as followed:

As people expect more mileage per kilometer, company should
increase the mileage of the Suzuki Vehicles.
SMIPL should increase the production capacity as the customers have
to wait for 3-4 months for delivery of the Suzuki Access.
Company showroom should take less time for service the
vehicle.
Company should facilitate a Scheme for servicing Old
Vehicles so that the entire customer services their vehicle
at companys service station.
Suzuki should introduce a low price moped.
All parts should be available at service station. Because
sometime customer face the problem that parts are not
available.
Company should facilitate a Scheme for servicing Old
Vehicles so that the entire customer services their vehicle
at companys service station.
Suzuki increase in advertising in mass media to promote its sales.
68 | P a g e

Company should manufacture motorcycles which can withstand for
long time on Indian roads.
Company should appoint a brand ambassador and also sponsor
entertainment and sports events so that the name of the company
remains in the minds of the people.
SMPIL should implement new marketing strategies to compete with
Indian competitor
Suzuki at the moment has a very weak product portfolio and its
products are not that visible in the market.
Suzuki should maintain and produce the bikes in quarterly or half
yearly so that customers can avail options.

















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CONCLUSION

Indian 2-wheeler industry is the second largest in Asia after China. After the
separation with Tvs Motors the main focus of Suzuki has been to capture the
Indian Market through its Product which are Best In terms Of Style &
Design and is trying to achieve more target of which it has laid down for the
coming years its Recent Launched Bikes like Suzuki Zeus, GS150R,
Hayabusa and Scooter Suzuki Access have shaken the market leader Like
Bajaj, Hero Honda & Honda is giving them a tough competition & soon
going Launch Few More Bikes in the market. But in a country like India
where customer generally appreciates mileage it becomes necessary for a
company like Suzuki which produces Bikes whose prices are towards the
higher end to focus on other factors to which influence the consumer choice
of Product like Prices, after sale services and many more.

After deep research, analysis and getting information about customer of
Suzuki Access 125 as formulated that Suzuki Access has success in the
market and people satisfied this product.










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BIBLIOGRAPHY


MAGAZINES:
Auto India - Car & Bike Magazine

NEWSPAPERS:
Economic Times
Business Standard

WEBSITES:
www.suzukimotorcycles.co.in
www.autowebindia.com
www.sitepoint.com
www.automonitor.com
www.siamindia.com
Various Search Engines









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APPENDIX
(QUESTIONNAIRE)

1. Name -________________________________________

2. Age 18-25 26-35
36-45 46 and above

3. Gender- Male Female


4. Marital Status- Married Unmarried

5. Occupation-
Officials Students
Retired Others

6. Your income (per annum) (in thousands)?
Rs. 75-100 Rs. 100-125
Rs. 125-150 Rs. 150 above

7. What is your perception about Suzuki automobiles product?

Very good Good Average Bad



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8. How did you get to know about Suzuki?
Advertisement Family information
Friends recommendation Dealers recommendation

9. If you are going to be a customer of Suzuki motorcycles, what will be
your expectation?
More variety more value for money
Improved quality Better after-sales service

10. Which brand according to you is giving the most competition to
SMIPL in India?

Hero Honda Tvs Honda Bajaj

11. Do you like the Suzuki Access 125?
Very much Average Not so much

12. What about the Price of Suzuki Access 125?

Highly priced Moderate/Avg price Low price

13. Do you think that the Suzuki Access 125 is capable to attract todays
generations?
Yes No cannot say

14. What is the best thing in Suzuki Access 125?
Quality Style/design Service Price

15. Has it served the purpose of purchasing?
Yes No Average Cannot say

16. Are you satisfied with free service from the showroom?
Yes No

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17. Is Suzuki Access 125 comfortable for driving and journey?
Yes No Average

18. Maintenance cost of Suzuki Access 125?
High Moderate/Avg Low


19. Do you think worth the value of money you spent on Suzuki Access
125?
Yes No Average

20. What is your level of satisfaction towards Suzuki access?

0-25% 25-50% 50-75% 75-100%

21. Suggestions/Feedback, if any
__________________________________________________