Introduction:

Automotive:
The automotive business involves the design, manufacturing and sale of passenger cars,
recreational vehicles, sport utility vehicles, minivans, trucks and related parts. Automobiles are
manufactured mainly by Toyota and Daihatsu Motor Co. Automobile parts are manufactured by Toyota
and their suppliers, such as companies like Denso Corporation.
These products are sold through Tokyo Toyo-Pet Motor Sales Co., Ltd. and other dealers. Some
sales, to certain large customers, are made directly by Toyota in Japan, bypassing the dealership
network. Overseas, sales are made through Toyota Motor Sales, U.S.A., Inc. and other distributors
and dealers. Volkswagen and Audi vehicles are also sold through the Toyota dealership network in
Japan.

Overcapacity, mergers and alliances

With overcapacity estimated at around 30% (Economist Feb 11th 1999) or the capacity to
produce 23 million more cars per year than the market will take (Robert Eaton of Chrysler,
quoted in the Economist), this is an industry in trouble. We have seen mergers and alliances,
for instance Daimler-Benz with Chrysler. There is speculation (Jac Nassar of Ford) that there
is only room for six volume car makers in the future: two in Japan, two in Europe and two in
the US. Smaller manufacturers without the highest production expertise and economies of
scale will simply disappear.
Economic downturn
Over the last couple of years, demand for new vehicles has slowed, putting pressure on
automakers all round the world to slim down their operations, close unproductive plants and
focus on core strategic activities.
Shifting consumer demands
Led by the US, consumers are no longer satisfied
with mid-sized family cars. Increasingly they are
demanding more specialized vehicles such as
SUVs, minivans and light trucks.
The adjacent graph from the Economist shows the
dramatic shift in sales from cars to light trucks.
Increasing variety in demand is causing a growing
emphasis on flexible manufacturing systems to
enable rapid response to market variations, and
mass-customized product to be ordered for the customer straight off the production line.

Removal of European trade barriers

Until 2000, Europe had strict quota limits on the import of Japanese cars. This had
encouraged investment by Japanese car firms in manufacturing plants within European
borders and had also protected the domestic markets of the smaller European

manufacturers. With the removal of these trade barriers, the European market is being
opened up to more competition. However, it remains to be seen how far governments will go
in removing the safety net from their domestic auto industries. Industry consolidation would
lead to plant closures, with large-scale job losses, which are difficult for many European
governments to swallow, and the calls for intervention and subsidy introduction could be too
loud to be ignored.

From followers to leaders

For many years, Japanese companies struggled to produce automobiles up to the standards of the
US and Europe. They were producing much lower volumes, which hindered them from achieving
scale economies. They also lacked learning, technology and the ability to produce quality that the US
companies had. Many of the products developed by the Japanese car companies in the first half of
the 20th century were manufactured from kits supplied by, or based on designs reverse-engineered
from, foreign competitors. The up-and-coming leaders of the Japanese automotive industry spent
their time touring production facilities in the US, learning manufacturing techniques and automobile
engineering from (it seems) proud and willing tutors at Ford and GM.
During the 1960s and 1970s the Japanese automobile industry continued to work on process
improvements to increase their quality and production efficiency, and on their own designs of smaller,
more-affordable cars to suit their domestic market more appropriately. They developed their supplier
networks of subsidiaries and partly-owned companies to provide them with the high-quality
components they needed.
Suddenly from the 1970s/1980s, Japanese cars had become well-made and inexpensive. In
manufacturing systems the Japanese had leapt ahead of the west they had so diligently studied
earlier in the century. In the coming years, car manufacturers from all over the world would be
studying Japanese automakers (especially Toyota) to learn their production techniques. Indeed these
firms had become the new most-admired engineering organizations in the world.

From domestic market to exporters

At the dawn of the Japanese car industry, there were many manufacturers vying principally for
domestic business. Large volumes of imports were arriving from overseas on Japanese shores, since
Japanese consumers preferred the more reliable imports.
Capital available to the Japanese firms was fairly limited and they concentrated on developing their
production to compete in their domestic market. Yet, as improvements in efficiency and quality came
through, and excess capacity grew as home market growth slowed, Japans auto exports grew rapidly.
By 1974, Japan had displaced West Germany as the worlds largest automobile exporter, and by 1976
most of Japans auto output was exported.
All other:
Other businesses include the manufacturing and sale of industrial vehicles such as forklifts and
logistics systems, and the design, manufacturing and sale of prefabricated housing,
telecommunications and other business. Industrial vehicles are manufactured by Toyoda Automatic
Loom Works, Ltd. and sold through dealers in Japan and distributors and dealers overseas. Housing
is manufactured by TMC and sold through domestic housing dealers. In the telecommunication
business, IDO Corporation provides domestic telephone services. Toyoda Tsusho Corporation
engages in the purchase and sale as well as import and export of various products.

Company Profile:
History
Maruti Udyog Limited was established in February 1981, though the actual production commenced
only in 1983. It started with the Maruti 800, based on the Suzuki Alto kei car which at the time was the
only modern car available in India. Its only competitors were the Hindustan Ambassador and Premier
Padmini. Originally, 74% of the company was owned by theIndian government, and 26% by Suzuki of
Japan. As of May 2007, the government of India sold its complete share to Indian financial institutions
and no longer has any stake in Maruti Udyog.
Maruti Suzuki is one of the leading automobile manufacturers of India, and is the leader in the car
segment both in terms of volume of vehicle sold and revenue earned. It was established in February,
1981 as Maruti Udyog Ltd. (MUL), but actual production started in 1983 with the Maruti 800 (based on
the Suzuki Alto kei car of Japan), which was the only modern car available in India at that time.
Previously, the Government of India held a 18.28% stake in the company, and 54.2% was held by
Suzuki of Japan. However, in June 2003, the Government of India held an initial public offering of
25%. By May 10, 2007 sold off its complete share to Indian financial institutions. Through 2004, Maruti
Suzuki has produced over 5 million cars. Now, the company annually exports more than 50,000 cars
and has an extremely large domestic market in India selling over 730,000 cars annually. The Maruti
800 remained the largest selling compact car of India till 2004 since its launch 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. More than half the cars sold in
India are Maruti Suzuki cars. Maruti Suzukis are sold in India and several other countries, depending
upon export orders. Models similar to Maruti Suzukis (but not manufactured by Maruti Udyog) are sold
by Suzuki Motor Corporation and manufactured in Pakistan and other South Asian countries.

Maruti Suzuki has two state-of-the-art manufacturing facilities in India. The first facility is at Gurgaon
spread over 300 acres and the other facility is at Manesar, spread over 600 acres in North India. The
Gurgaon facility Maruti Suzuki's facility in Gurgoan houses three fully integrated plants. While the
three plants have a total installed capacity of 350,000 cars per year, several productivity
improvements or shop floor Kaizens over the years have enabled the company to manufacture nearly
700,000 cars/ annum at the Gurgaon facilities. The entire facility is equipped with more than 150
robots, out of which 71 have been developed in-house. More than 50 per cent of our shop floor
employees have been trained in Japan. Gurgaon facility also houses `K' Engine plant. The `K' family
engine plant has an installed annual capacity of 240,000 engines and was commissioned in 2008.
Spread over an area of 20,300 m2, the `K' family engine facility is part of the Rs 9,000 crore

investment plan drawn by Maruti Suzuki and Suzuki Motor Corporation. The next generation `K'engine
like all Maruti Suzuki earlier technologies is highly fuel efficient, while offering the best in refinement
and performance. It will take the engine technology to the next level in India. A-Star is the first car to
be powered by `K' family engine. The forthcoming models will be powered by other `K' family engines.
At present the plant rolls out World Strategic Models Swift , A-star & SX4 and DZire. The plant has
several in-built systems and mechanisms. There is a high degree of automation and robotic control in
the press shop, weld shop and paint shop to carry on manufacturing work with acute precision and
high quality. 2 This facility has an initial capacity to manufacture 100,000 diesel engines a year. This
will be scaled up to 300,000 engines/annum by 2010.
Maruti Suzuki uses a combination of Counteroffensive defence and Contraction defence to defend
its market share. The Contraction defence strategy can be clearly seen in Maruti phasing out Maruti
800. As on 2010 Euro IV emission would come into place in Indias top 10 cities. Since the sale of this
model was constantly on the decline, Maruti decided not to go for up gradation and modification. The
more economically viable option was to phase out the car, a decision which would have no impact on
the overall sales figures. Pre liberalization Maruti Suzuki was the clear market leader in the passenger
car segment in India. Post liberalization, when many foreign players started entering the market with
cars which were superior to Maruti in all aspects, Marutis market share started to decline. To
overcome this situation Maruti improved the technology used in its cars and came out with many new
models. In its counteroffensive defence strategy, Maruti took the competition head on, launching a full
frontal attack with its new models. This later on ensured that Maruti regained its position as the clear
market leader in the passenger car segment in India. Present situation Maruti Suzuki is the market
leader in the A2 and A3 segments. In the A2 segment Maruti has a market share of 53.3% and in the
A3 segment it has a market share of 42.7%.Maruti is currently is exiting the A1 segment by phasing
out its 800 model. It wants to become a company which is capable of satisfying the needs of
customers across segments (Full market coverage, segment by segment invasion plan). The next
logical step that Maruti should take to achieve this objective is to enter into the A4 segment. Breaking
into the segment may take time but with the high growth rates expected in this segment it is an
opportunity that should not be wasted. Maruti Suzuki would be following a product development
strategy where they would be introducing a new product into the existing market.
Chronology
Under the Maruti name
In 1970, a private limited company named Maruti technical services private limited (MTSPL) was
launched on November 16, 1970. The stated purpose of this company was to provide technical knowhow for the design, manufacture and assembly of "a wholly indigenous motor car". In June 1971, a
company called Maruti limited was incorporated under the Companies Act. Maruti Limited went into
liquidation in 1977. Maruti Udyog Ltd was incorporated through the efforts of Dr V. Krishnamurthy.

Affiliation with Suzuki

In 1982, a license & Joint Venture Agreement (JVA) was signed between Maruti Udyog Ltd.
and Suzuki of Japan. At first, Maruti Suzuki was mainly an importer of cars. In India's closed market,
Maruti received the right to import 40,000 fully built-up Suzukis in the first two years, and even after
that the early goal was to use only 33% indigenous parts. This upset the local manufacturers
considerably. There were also some concerns that the Indian market was too small to absorb the
comparatively large production planned by Maruti Suzuki, with the government even considering
adjusting the petrol tax and lowering the excise duty in order to boost sales. Finally, in 1983,
the Maruti 800 was released. This 796 cc hatchback was based on the SS80 Suzuki Alto and was
Indias first affordable car. Initial product plan was 40% saloons, and 60% Maruti Van. Local
production commenced in December 1983. In 1984, the Maruti Van with the same three-cylinder
engine as the 800 was released and the installed capacity of the plant in Gurgaon reached 40,000
units.
In 1985, the Suzuki SJ410-based Gypsy, a 970 cc 4WD off-road vehicle, was launched. In 1986, the
original 800 was replaced by an all-new model of the 796 cc hatchback Suzuki Alto and the 100,000th
vehicle was produced by the company. In 1987, the company started exporting to the West, when a
lot of 500 cars were sent to Hungary. By 1988, the capacity of the Gurgaon plant was increased to
100,000 units per annum.
Market liberalisation
In 1989, the Maruti 1000 was introduced and the 970 cc, three-box was Indias first
contemporary sedan. By 1991, 65 percent of the components, for all vehicles produced, were
indigenized. After liberalization of the Indian economy in 1991, Suzuki increased its stake in Maruti to
50 percent, making the company a 50-50 JV with the Government of India the other stake holder.
In 1993, the Zen, a 993 cc, hatchback was launched and in 1994 the 1298 cc Esteem was introduced.
Maruti produced its 1 millionth vehicle since the commencement of production in 1994. Maruti's
second plant was opened with annual capacity reaching 200,000 units. Maruti launched a 24-hour
emergency on-road vehicle service. In 1998, the new Maruti 800 was released, the first change in
design since 1986. Zen D, a 1527 cc diesel hatchback and Maruti's first diesel vehicle and a
redesigned Omni were introduced. The 1.6 litre Maruti Baleno three-box saloon and Wagon R were
also launched.
In 2000, Maruti became the first car company in India to launch a Call Center for internal and
customer services. The new Alto model was released. In 2001, Maruti True Value, selling and buying

used cars was launched. In October of the same year the Maruti Versa was launched. In
2002, Esteem Diesel was introduced. Two new subsidiaries were also started: Maruti Insurance
Distributor Services and Maruti Insurance Brokers Limited. Suzuki Motor Corporation increased its
stake in Maruti to 54.2 percent.
In 2003, the new Suzuki Grand Vitara XL-7 was introduced while the Zen and the Wagon R were
upgraded and redesigned. The four millionth Maruti vehicle was built and they entered into a
partnership with the State Bank of India. Maruti Udyog Ltd was Listed on BSE and NSE after a public
issue, which was oversubscribed tenfold. In 2004, the Alto became India's best selling car overtaking
the Maruti 800 after nearly two decades. The five-seater Versa 5-seater, a new variant, was created
while the Esteem was re-launched. Maruti Udyog closed the financial year 2003-04 with an annual
sale of 472,122 units, the highest ever since the company began operations and the fiftieth lakh (5
millionth) car rolled out in April 2005. The 1.3 L Suzuki Swift five-door hatchback was introduced in
2005.[16]
In 2006 Suzuki and Maruti set up another joint venture, "Maruti Suzuki Automobiles India", to build two
new manufacturing plants, one for vehicles and one for engines. Cleaner cars were also introduced,
with several new models meeting the new "Bharat Stage III" standards. In February 2012, Maruti
Suzuki sold its ten millionth vehicle in India.[11] For the Month of July 2014, it had a Market share of
>45 %
.

SWIFT DZIRE
Maruti Suzuki in India launched the second generation of its sedan Maruti Suzuki DZire (known as
DZire as of 2012), which is based on the third-generation Swift on 1 February 2012. Unlike the
previous generation, it is a compact sedan under 4000 mm. It shares its engines with the hatchback.
Like the previous car, changes to the suspension have been made. It also has two-tone beige and
black interiors, unlike the hatchback's all-black interiors.
The new version of Maruti Suzuki Swift DZire was launched in Feb 2015 which was a refined version
of the existing model. The vehicle was rated as the most fuel efficient diesel car in the country. Maruti
Suzuki has also created an automatic transmission variant of the DZire, available in the VXi trim.
Maruti Suzuki launched the DZire ZDI with Automatic Gear Shift (AGS) in January 2016 at INR 8.39
Lakhs (ex-showroom Delhi)

The 5-speed automated manual transmission (AMT)is paired to the 1.3-liter DDiS diesel engine in the
Dzire ZDI variant, which produces 75 PS and 190 Nm of torque. The fuel efficiency is rated at
26.59 km/l for the diesel automatic variant, which is the same as that of the regular model with a
manual gearbox.

Sales
Sales of the Swift Dzire had reached cumulative worldwide sales of four million units in August 2014
(nine years and nine months since the start of sales in 2004). Especially in India, ever since its launch
in 2005, the Swift steadily increased its sales in line with the market expansion due to economic
growth, such as by adding diesel variants and sedans. Of the four million units, units sold in India
account for approximately half of them. Also, approximately 19% were sold in Europe, and
approximately 11% were sold in Japan. By June 2008, cumulative sales of the Swift reached 1
million and in January 2011, cumulative sales totaled at 2 million