MARUTI SUZUKI -

DIAGONSTIC STUDY
GROUP-09
With more than 50% of market share,
Maruti Suzuki should now focus on
increasing profitability through other
avenues.
ISSUE MAPS

Introduce new products

Segregating existing sales

channel

Export
Sales Volume
Technological improvements
Revenue

Profitability Price

Expenses
 Expenses as compared to Sales
(Rs. in Crores)
90,000 90.00%

80,000 80.00%

70,000 70.00%

60,000 60.00%

50,000 50.00%

40,000 40.00%

30,000 30.00%

20,000 20.00%

10,000 10.00%

0 0.00%
2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018
Sales (in Cr) Expenses (in Cr) Material Cost % Manufacturing Cost % Employee Cost %
BCG MATRIX
Revenues Distribution Profit margin% from Market share of each
Segment in each segment each segment segment
Mini 17% 20% 24%
Compact 46% 13% 42%
Mid-size 06% 08% 03%
Utility vehicles 22% 10% 28%
Vans 06% 22% 09%
LCV 01% 16% 01%
 STARS MARUTI SUZUKI QUESTION MARKS

25.00%

UTILITY VEHICLES

20.00%

15.00%
MARKET GROWTH

10.00%
RATE

COMPACT VANS
5.00%

MINI MID-SIZE

CASH COWS
0.00% DOGS
20.00 2.00 0.20 0.02
RELATIVE MARKET SHARE
UNIT SALES OF PASSENGER VEHICLES
Unit Sales of Passenger Vehicles
Utility Vehicle as a segment grew by 29.6%
from 2016-2017
155,137
However, the entire market grew only by
21%
253759
Vans as a segment grew by 2.5% from
2016-2017 which is a meagre contributor
1,234,571 to overall sales.

Mini, Compact & Mid Size Utility Vehicles Vans

SUB SEGMENT- SALES (UNIT TYPE)
Units Sales per Mini, Mid-Size MINI – Increase in Sales by 3.2% from 2016-17
& Compact Model Types Alto WagonR
4.8%
Compact – Increase in Sales by 21.2% from 2016-
17
34.6% Swift, Ignis (Nexa Channel),Celerio, Baleno (Nexa
Channel), Dzire, Tour
60.6%
Mid Size – Decrease in Sales by 8.6% from 2016-17
Ciaz

Mini Compact Mid-size

FOCUS ON UTILITY VEHICLES WHICH IS CONSISTENTLY
SHOWING HIGH MARKET SHARE AND GROWTH RATE.
Maruti Suzuki India Ltd’s full throttle drive to
capture the No. 1 position in utility vehicles
(UVs) bore fruit after seven years as it raced
past market leader Mahindra and Mahindra
Ltd to capture a 28.6% share.
Maruti expanded its market share,
riding the success of utility vehicles
like the Vitara Brezza .
Maruti executive director for
marketing and sales RS Kalsi
said what worked for the company
was its prompt response to customer
demands — the automaker
developed the Brezza, after customer
feedback about the lack of a sporty,
fun-to-drive SUV.
• Indian car buyers are increasingly
craving for sports utility vehicles (SUVs)
and carmakers are obliging by lining up
tens of launches across price segments.

• One in every four passenger vehicles

sold in the country in 2017 was a utility
vehicle, and the ratio is reversed in the Rs
12 lakh to Rs 40 lakh bracket where three
out of every four cars sold last year were
SUVs.

•Rivals are launching new models in this

segment. Hence Maruti needs to
introduce as well.
MARUTI SUZUKI INDIA CAN FURTHER SEGREGATE AND REBRAND THE TRADITIONAL SALES CHANNEL FOR THE
PASSENGERS VEHICLES FOR COMMERCIAL USE MARKET I.E. CAR AGGREGATOR MARKET AS IT IS FORECASTED TO
GROW AT 13.7% DURING 2017 - 2022

Maruti Suzuki India Sales Channel till APRIL 2018 • Company's footprint has gone up from 800
PV for Commercial cities to 1643 cities
Use
10%
Traditional • 6% of the sales comes from the car aggregator
Commercial 56%
8% market which majorly targets the compact
segment offerings
True Value
7% • Nexa’s contribution to total sales volume
Nexa has further increased from 15% in FY17 to
15% 19.9% in FY18

Traditional Turned
Arena
4%
Traditional Traditional Turned Arena Nexa
True Value Commercial PV for Commercial Use
MID-SIZE SEGMENT CAR CIAZ SALES HAS DECLINED BY ~ 8% Y-O-Y IN FY 18 THEREFORE LOOK AT REVAMPING
ITSELF TO REDUCE THE INVENTORY PILING UP IN THE COUNTRY DUE TO OVERALL LOW SALES CONTRIBUTION

NEXA SALES CHANNEL APRIL 2017 - JAN 2018

• Nexa outlets sold on
Number of Passenger Vehiles Sold in the

200000 80%
180000 70% average nearly 27,000 -
160000 28,000 cars every month,
60%
of which nearly 15,000 -
Domestic Market

140000
120000 50% 16,000 were Balenos,
100000 40% followed by Ignis, Ciaz, and
80000 S-Cross.
30%
60000
20%
40000 • Nexa’s S-cross is not
20000 10% contributing in the utility
0 0% vehicle segment.
Premium Hatchback Utility Vehicle S-
Mid Size Ciaz
Baleno and Ignis Cross
Units
Series1 186000 49094 35557
Series2
In % 69% 18% 13%
INCREASE EXPORTS & GO INTERNATIONAL
GDP vs Passenger automobile growth rate Y-o-Y (2017)
20%
18%
16%
14%
12%
10%
8%
6%
4%
2%
0%
Brazil Iran Philippines Thailand Chile Indonesia
GDP Growth 1% 4.30% 6.70% 3.90% 1.50% 5.10%
Passenger Automobile Growth rate 9% 10.80% 10.20% 14.10% 18.00% 6.82%
GDP Growth Passenger Automobile Growth rate
RECOMMENDATIONS & SHORTFALLS
The countries stated have high potential for We have only identified potential markets to
exports and the passengers car segment is boost exports
growth rapidly.
We are yet to consider specific country's
Though relatively small countries, having a Purchasing Power, Tax structure, Political
greater market share can act as a stepping uncertainties, currency volatility and Individual
stone to have a significant market in car segments
developed nations like USA, Europe - Britain,
France.
In the existing markets, Maruti Suzuki is not Competitiveness of MSI each country
even in top 4 in terms of market share. wrt price. (Excel)
Increasing their share by revamping certain
models like Swift, Baleno, Ciaz can work
1.5 BILLION INVESTED IN R&D, MARUTI PLANS TO SELL OVER 200,000
CARS WITH AGS & TELEMATIC TECHNOLOGY

With increase in the R&D expenses, Maruti Suzuki should continue to

maintain its domestic dominance and intend to ward off competition
from existing Korean & European manufacturers in India.
The company plans to launch 20 new models by 2020. Also advent of
EV & hybrid vehicles, the company plans to begin market research
segment in alliance with Suzuki-Denso-Toshiba laying down the
foundation stone for its factory in Gujarat with an investment of $180
million, expected to be functional by 2020.
Continuing to focus on implementing better technologies for offering
convenience & comfort without compromising on its core value of fuel
efficiency for its growing middle class families, Maruti Suzuki plans to
sell over 2 lakhs car with AGS technology by 2018-19.
COMPLEXITY
Levels Description Weights Score Weighted Score
5Setting Vision And Mission 0.3 7 2.1
4Intelligence Gathering Option 0.2 8 1.6
3All Planning And Organisation 0.3 7 2.1
2All Coordination Work 0.1 5 0.5
1Geographical Location 0.1 4 0.4
Weighted Score - Aggregate 6.7

Levels Description Weights Score Weighted Score

5Setting Vision And Mission 0.2 7 1.4
4Intelligence Gathering Option 0.2 8 1.6
3All Planning And Organisation 0.3 8 2.4
2All Coordination Work 0.1 7 0.7
1Geographical Location 0.2 5 1
Weighted Score - Aggregate 7.1