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CHAPTER 1

INTRODUCTION

1.1 General

Maruti Suzuki India Limited, a partial subsidiary of Suzuki Motor Corporation of Japan, is
India's largest passenger car company, accounting for over 45% of the domestic car market.
The company offers a complete range of cars from entry level Maruti 800 and Alto, to
hatchback Ritz, A star, Swift, Wagon-R, Estillo and sedans DZire, SX4 and Sports Utility
vehicle Grand Vitara.

It was the first company in India to mass-produce and sell more than a million cars. It is
largely credited for having brought in an automobile revolution to India. It is the market leader
in India and on 17 September 2007, Maruti Udyog Limited was renamed Maruti Suzuki India
Limited. The company's headquarters are located in New Delhi.

Maruti Suzuki at a glance:-

Type Public
BSE: 532500
Traded as
NSE: MARUTI
Industry Automotive
Founded 1981 (as Maruti Udyog Limited)
Headquarters New Delhi, India
Mr. Shinzo Nakanishi, Managing
Key people
Director and CEO
Products Automobiles
Revenue US$4.8 billion (2009)
Employees 6,903
Parent Suzuki Motor Corporation
Website MarutiSuzuki.com

1.2 Company profile

Maruti Suzuki is India and Nepal's number one leading automobile manufacturer and the
market leader in the car segment, both in terms of volume of vehicles sold and revenue earned.
Until recently, 18.28% of the company was owned by the Indian government, and 54.2% by
Suzuki of Japan. The BJP-led government held an initial public offering of 25% of the
company in June 2003. As of 10 May 2007, Govt. of India sold its complete share to Indian
financial institutions. With this, Govt. of India no longer has stake in Maruti Udyog.

Maruti Udyog Limited (MUL) was established in February 1981, though the actual production
commenced in 1983 with the Maruti 800. Through 2004, Maruti Suzuki has produced over 5
Million vehicles. The company annually exports more than 50,000 cars and has an extremely
large domestic market in India selling over 730,000 cars annually. Maruti 800, till 2004, was
the India's largest selling compact car ever since it was launched in 1983. More than a million
units of this car have been sold worldwide so far. Currently, Maruti Suzuki Alto tops the sales
charts and Maruti Suzuki Swift is the largest selling in A2 segment.

Maruti Suzuki has been the leader of the Indian car market for over two decades. Its
manufacturing facilities are located at two facilities Gurgaon and Manesar south of Delhi.
Maruti Suzuki’s Gurgaon facility has an installed capacity of 350,000 units per annum. The
Manesar facilities, launched in February 2007 comprise a vehicle assembly plant with a
capacity of 100,000 units per year and a Diesel Engine plant with an annual capacity of
100,000 engines and transmissions. Manesar and Gurgaon facilities have a combined
capability to produce over 700,000 units annually. More than half the cars sold in India are
Maruti Suzuki cars. The company is a subsidiary of Suzuki Motor Corporation, Japan, which
owns 54.2 per cent of Maruti Suzuki. The rest is owned by public and financial institutions. It
is listed on the Bombay Stock Exchange and National Stock Exchange in India. During 2007-
08, Maruti Suzuki sold 764,842 cars, of which 53,024 were exported. In all, over six million
Maruti Suzuki cars are on Indian roads since the first car was rolled out on 14 December 1983.
Nearly 75,000 people are employed directly by Maruti Suzuki and its partners. It has been
rated first in customer satisfaction among all car makers in India from 1999 to 2009 by J D
Power Asia Pacific.

1.3 Products

• Maruti New Swift

• Maruti RIII Concept


• Maruti Suzuki Kizashi

• Maruti Eeco

• Maruti Suzuki XL7

• Maruti Suzuki Grand Vitara 2.4

• Omni

• Maruti Alto

• Maruti Zen Estilo

• Wagon R

• Versa

• Maruti Esteem

• Baleno

• Swift

• Swift DZire

• Maruti Gypsy

• Maruti SX4

• Maruti A-Star

• Maruti Suzuki Ritz

• Maruti Suzuki Concept R3

• Maruti 800

1.4 Plant locations


Maruti Suzuki has two facilities in Gurgaon and Manesar, Haryana, India with a combined
manufacturing capacity close to one million cars per annum. In term of number of cars
produced and sold worldwide, the company is the largest subsidiary of SMC, Japan.

Gurgaon Manufacturing Facility

The Gurgaon Manufacturing Facility has three fully integrated manufacturing plants and is
spread over 300 acres (1.2 km2). All three plants have an installed capacity of 350,000 vehicles
annually but productivity improvements have enabled it to manufacture 700,000 vehicles
annually. The Gurgaon facilities also manufacture 240,000 K-Series engines annually. The
entire facility is equipped with more than 150 robots, out of which 71 have been developed in-
house. The Gurgaon Facilities manufactures the 800, Alto, WagonR, Estilo, Omni, Gypsy and
Eeco.

Manesar Manufacturing Facility

The Manesar Manufacturing Plant was inaugurated in February 2007 and is spread over
600 acres (2.4 km2). Initially it had a production capacity of 100,000 vehicles annually but this
was increased to 300,000 vehicles annually in October 2008. The production capacity was
further increased by 250,000 vehicles taking total production capacity to 550,000 vehicles
annually. The Manesar Plant produces the A-star, Swift, Swift DZire and SX4.

1.5 Mission

To provide maximum value for money to their customers through continuous improvement of
products and services.

1.6 Vision

The leader in the India automobile industry, creating customer delight and shareholder’s
wealth; A pride of India.
1.7 Organisational structure

CHAPTER 2

MARKET SURVEY

2.1 Market Potential

2.2 Competitors

Main competitors of Maruti Suzuki are:-


1) Tata Motors

2) Fiat India Private Ltd

3) Ford India Private Ltd

4) General Motors India

5) Hindustan Motors

6) Hyundai Motors

7) Toyota Motors

2.3 Strategies

1) The confidence of Maruti Suzuki’s network partners in its capabilities is evident from the
fact that majority of their new showrooms & workshops are coming from existing dealers.
2) Its overall portfolio consists of 11 basic models & over 150 variants spanning across all
segments of the industry. While maintaining the focus on Compact cars, Maruti’s presence in
A3 segment is getting stabilized fast by recently launched SX4. They have sold maximum
number of cars in domestic A3 segment till Oct'07.
3) Their foray into Alternate fuel segment (with LPG powered Wagon R and Swift Diesel) has
seen a very encouraging response from customers.
4) Last 30 months have been quite happening. The company launched 6 new models
(including Swift Diesel & Wagon R Duo) in this span of time.

2.4 Joint Ventures


CHAPTER 3

FINANCIAL DETAILS

3.1 Risks involved in Business

3.2 Profitability

Useful information about the trend of profitability is from profitability ratio. On the basis of
this ratio, investors get an idea about overall efficiency of managers and bank as well as other
creditors draw useful conclusion about repaying capacity of the borrowers.

Profitability ratio expresses relationship between Gross Profit earned to Net Sales. It is
significant indicator of the profitability of business. It expresses in percent. The ratio shows
whether the mark up obtained on cost of production is sufficient or not. If this ratio is low, it
indicates that the cost of sales is high or that the purchasing is inefficient. Alternatively, it may
also mean that due to depression, the selling price is reduced but there are may be no
corresponding reduction in cost of sales.

Formula:-

Gross Profit / Sales X 100

3.3 Return

Balance Sheets(Last five years):- (In RS CRORES)

Particulars Mar'10 Mar'09 Mar'08 Mar'07 Mar'06


Liabilities 12 Months 12 Months 12 Months 12 Months 12 Months
Share Capital 144.50 144.50 144.50 144.50 144.50
Reserves &
11,690.60 9,200.40 8,270.90 6,709.40 5,308.10
Surplus
Net Worth 11,835.10 9,344.90 8,415.40 6,853.90 5,452.60
Secured Loans 26.50 0.10 0.10 63.50 71.70
Unsecured Loans 794.90 698.80 900.10 567.30 0.00
TOTAL
12,656.50 10,043.80 9,315.60 7,484.70 5,524.30
LIABILITIES
Assets
Gross Block 10,406.70 8,720.60 7,285.30 6,146.80 4,954.60
(-) Acc.
5,382.00 4,649.80 3,988.80 3,487.10 3,259.40
Depreciation
Net Block 5,024.70 4,070.80 3,296.50 2,659.70 1,695.20
Capital Work in
387.60 861.30 736.30 238.90 92.00
Progress.
Investments. 7,176.60 3,173.30 5,180.70 3,409.20 2,051.20
Inventories 1,208.80 902.30 1,038.00 713.20 881.20
Sundry Debtors 809.90 918.90 655.50 747.40 654.80
Cash And Bank 98.20 1,939.00 324.00 1,422.80 1,401.60
Loans And
1,739.10 1,809.80 1,173.00 1,072.60 933.10
Advances
Total Current
3,856.00 5,570.00 3,190.50 3,956.00 3,870.70
Assets
Current Liabilities 3,160.00 3,250.90 2,718.90 2,288.60 1,704.80
Provisions 628.40 380.70 369.50 490.50 480.00
Total Current
3,788.40 3,631.60 3,088.40 2,779.10 2,184.80
Liabilities
NET CURRENT
67.60 1,938.40 102.10 1,176.90 1,685.90
ASSETS
Misc. Expenses 0.00 0.00 0.00 0.00 0.00
TOTAL ASSETS 12,656.50 10,043.80 9,315.60 7,484.70 5,524.30

CHAPTER 4

SWOT ANALYSIS

Strengths Weaknesses

• Largest network of dealers and after • Lack of having products in mid size car
sales service caters in the country. segment could result in shifting of loyal
• Self competing product range in small customers who has a desire to upgrade
car segment (Maruti 800,Omni,Alto,Zen their cars.
and Wagon R) • Low interior quality in side the cars.
• Good promotional strategy is adopted by
MUL to transform its thoughts to the • Labour Laws and Labour Unions are not
people about its products. in a good form in India.
• Entered into second hand car market
with a brand name Maruti True Value.
• Loyal Customer Base. Awarded
consequently 5th year for best customer
satisfaction.
• Strong Brand Value

• Availability of raw material


Threats Opportunities

• Tata Motors has launched a car with a • MUL may encash the opportunity to
price tag of Rs.1 Lac (Nano) and it has a enter again into the diesel segment of the
considerable impact on sales of Maruti. cars to compete its nearest competitor
• HMIL is a challenger and trying hard to TATA in diesel segment of small cars.
achieve number one position in the • Launched its LPG version of Wagon R.
market. • Can start R&D on electric cars for a
• China may give a good competition as much better substitute of the fuel.
they are also planning to enter into car • Economic growth of the country is
segment. sound and promising in future.
• Liberal policies of GOI.
• Big Market: Domestic and Abroad

CHAPTER 5

SUGGESTIONS AND RECOMMENDATIONS

REFERENCES