You are on page 1of 12


SUBMITTED TO Ms. Pooja Patel

SUBMITTED BY Group No- 03 SACHIN PAREKH DENISH PATEL SANDIP DANKHARA SALAHUDDIN SAIYED KIRAN MEHTA 117500592016 117500592023 117500592026 117500592055 117500592062

A joint venture (JV) is a business agreement in which parties agrees to develop, for a finite time, a new entity and new assets by contributing equity. They exercise control over the enterprise and consequently share revenues, expenses and assets. There are other types of companies such as JV limited by guarantee, joint ventures limited by guarantee with partners holding shares.


A JV may be defined as any arrangement whereby two or more parties co-operate in order to run a business or to achieve a commercial objective: This co-operation may take various forms, such as equity-based or contractual JVs. It may be on a long-term basis involving the running of a business in perpetuity or on a limited basis involving the realization of a particular project. It may involve an entirely new business, or an existing business that is expected to significantly benefit from the introduction of the new participant.

A JV is, therefore, a highly flexible concept. The nature of any particular JV will depend to a great extent on its own underlying facts and characteristics and on the resources and wishes of the involved parties. It is an effective business strategy for enhancing marketing, positioning and client acquisition which has stood the test of time. The alliance can be a formal contractual agreement or an informal understanding between the parties. Global proliferation of business and commerce has given an international dimension to JVs. Corporate entities across the globe seek cross-border alliances to share the resources, opportunities and potential to deliver cutting edge performance. Such alliances are designed to suit the commercial requirements of parties and vary from a mere transitory arrangement for one partner to establish its presence in a new market to a calculated step towards a full merger of the technologies and capabilities of the partners.

JVs are envisaged as alliances that yield benefits for the JV partners by offering a platform to attain their business goals which would be difficult or uneconomical to attain independently. Establishing a JV with an ideal partner provides a fast way to leverage complementary resources available with the other partner, share each others capabilities, access new markets, strengthen position in the current markets, or diversify into new businesses. India Inc. has come of age and is not just an investment destination but also an aggressive investor. Indian companies have exhibited, in the recent past, their ambition to venture into the quest for overseas expansion. The main stumbling blocks for Indian companies in achieving expected levels of global presence are deficiencies in terms of product quality, technology, infrastructure and even management processes. These deficiencies can be negated by way of an alliance with a foreign counterpart who is a strategic fit.


Leveraging Resources Exploiting Capabilities and Expertise Sharing Liabilities Market Access Flexible Business Diversification

Joint Venture of Maruti Suzuki

1) 1981: The Indian Central government at the behest of Indira Gandhi salvages Maruti limited and starts looking for an active collaborator for this company. Maruti Udyog Ltd was incorporated under the provisions of the Indian Companies Act, 1956. 2) 1982: License and Joint Venture Agreement (JVA) signed between Maruti Udyog Ltd.(Indian Government) and Suzuki Motors Corporation of Japan. 3) 1991: 65 percent of the components, for all vehicles produced, are indigenized (produced locally). Liberalization of the Indian economy opens new opportunities but also brings more competition to segment.

4) 1992: Suzuki increases its stake in Maruti to 50 percent, making the company a 50-50 JV with the Government of India the other stake holder. 5)1997: Government nominated Mr. S.S.L.N. Bhaskarudu as the Managing Director on August 27, as the then current Managing director, R.C.Bhargava, was completing his tenure. Creating a conflict with Suzuki 6) 2002: Suzuki Motor Corporation (SMC) increases its stake in Maruti to 54.2 percent. 7) 2003: Maruti Udyog Ltd is listed on BSE and NSE after a public issue, which is oversubscribed 10 times.

Disputes between Suzuki Motor and the Government of India (GOI) A Bitter Fight The Conflict The MUL Disinvestment Issue


1. For Maruti: Suzuki motor Corporation, the parent company, is a global leader in mini and compact cars
Suzuki's technical superior

lightweight engine that is clean and fuel efficient

Nearly 75,000 people are employed directly by Maruti Suzuki and its partners

2. For Suzuki: Large Indian Market: Availability of resources: