History[edit]

Logo of Maruti Udyog

Maruti Udyog Limited was established in February 1981, though the actual production commenced
only in 1983. It started with 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 Hindustan Ambassadorand Premier
Padmini. Originally, 74% of the company was owned by the Indian government, and 26% by Suzuki
of Japan.[12] 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.[13]

Chronology[edit]
Beginnings
Maruti's history begins in 1970, when 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 know-how 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 and Sanjay Gandhi became its first managing director. "Maruti Limited" went into
liquidation in 1977. On 23 June 1980 Sanjay Gandhi died when a private test plane he was flying
crashed. A year after his death, and at the behest of Indira Gandhi, the Indian Central government
salvaged Maruti Limited and started looking for an active collaborator for a new company. Maruti
Udyog Ltd was incorporated in the same year through the efforts of Dr V.Krishnamurthy [14]
Suzuki enters
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. [15] Finally, in 1983,
the Maruti 800 is released. This 796 cc hatchback is based on the SS80 Suzuki Alto and is Indias
first affordable car. Initial product plan is 40% saloons, and 60% Maruti Van.[15] Local production
commences in December 1983.[11] 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.[14][dead link] In 1987, the company's 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. [16] Cleaner cars were also
introduced, with several new models meeting the new "Bharat Stage III" standards.[16] 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 %.[17]

Joint venture related issues[edit]

Relationship between the Government of India, under the United Front (India) coalition and Suzuki
Motor Corporation over the joint venture was a point of heated debate in the Indian media until
Suzuki Motor Corporation gained the controlling stake. This highly profitable joint venture that had a
near monopolistic trade in theIndian automobile market and the nature of the partnership built up till
then was the underlying reason for most issues. The success of the joint venture led Suzuki to
increase its equity from 26% to 40% in 1987, and further to 50% in 1992. In 1982 both the venture
partners had entered into an agreement to nominate their candidate for the post of Managing
Director and every Managing Director will have a tenure of five years [18][19]

Manufacturing facilities[edit]
Maruti Suzuki has two manufacturing facilities in India. [20] Both manufacturing facilities have a
combined production capacity of 14,50,000 vehicles annually. TheGurgaon manufacturing facility
has three fully integrated manufacturing plants and is spread over 300 acres (1.2 km2).[21] The
Gurgaon facilities also manufacture 240,000 K-Series engines annually. The Gurgaon Facilities
manufactures the 800, Alto, WagonR, Estilo, Omni, Gypsy, Ertiga, Ritz and Eeco.
The Manesar manufacturing plant was inaugurated in February 2007 and is spread over 600 acres
(2.4 km2).[21] 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 800,000 vehicles annually.[22] The Manesar Plant
produces the A-star, Swift, Swift DZire, SX4, Ritz and Celerio. On 25 June 2012, Haryana State
Industries and Infrastructure Development Corporation demanded Maruti Suzuki to pay an additional
Rs 235 crore for enhanced land acquisition for its Haryana plant expansion. The agency reminded
Maruti that failure to pay the amount would lead to further proceedings and vacating the enhanced
land acquisition.[23] It plans to set up a plant in Gujarat and has acquired 600 acres of land. [24]

Industrial relations[edit]
Since its founding in 1983, Maruti Udyog Limited has experienced problems with its labor force.
The Indian labour it hired readily accepted Japanese work culture and the modern manufacturing
process. In 1997, there was a change in ownership, and Maruti became predominantly government
controlled. Shortly thereafter, conflict between the United Front Government and Suzuki started. In
2000, a major industrial relations issue began and employees of Maruti went on an indefinite strike,
demanding among other things, major revisions to their wages, incentives and pensions. [25][26]

Employees used slowdown in October 2000, to press a revision to their incentive-linked pay. In
parallel, after elections and a new central government led by NDA alliance, India pursued a
disinvestment policy. Along with many other government owned companies, the new administration
proposed to sell part of its stake in Maruti Suzuki in a public offering. The worker's union opposed
this sell-off plan on the grounds that the company will lose a major business advantage of being
subsidised by the Government, and the union has better protection while the company remains in
control of the government.[25][27]
The standoff between the union and the management continued through 2001. The management
refused union demands citing increased competition and lower margins. The central government
privatized Maruti in 2002 and Suzuki became the majority owner of Maruti Udyog Limited. [28][29]

Manesar violence[edit]
On 18 July 2012, Maruti's Manesar plant was hit by violence as workers at one of its auto factories
attacked supervisors and started a fire that killed a company official and injured 100 managers,
including two Japanese expatriates. The violent mob also injured nine policemen. [30][31] The company's
General Manager of Human Resources had both arms and legs broken by his attackers, unable to
leave the building that was set ablaze, and was charred to death. The incident is the worst-ever for
Suzuki since the company began operations in India in 1983.[32]
Since April 2012, the Manesar union had demanded a three-fold increase in basic salary, a monthly
conveyance allowance of 10,000, a laundry allowance of 3,000, a gift with every new car launch,
and a house for every worker who wants one or cheaper home loans for those who want to build
their own houses.[33][34]According to the Maruti Suzuki Workers Union a supervisor had abused and
made discriminatory comments to a low-caste worker.[35] These claims were denied by the company
and the police.[31] Maruti said the unrest began, not over wage discussions, but after the workers'
union demanded the reinstatement of a worker who had been suspended for beating a supervisor.
[32]

The workers claim harsh working conditions and extensive hiring of low-paid contract workers

which are paid about $126 a month, about half the minimum wage of permanent employees.
[35]

Maruti employees currently earn allowances in addition to their base wage. [36]Company executives

denied harsh conditions and claim they hired entry-level workers on contracts and made them
permanent as they gained experience. It was also claimed that bouncers were deployed by the
company.[33]
The police, in its First Information Report (FIR), claimed on 21 July that Manesar violence is the
result of a planned violence by a section of workers and union leaders and arrested 91 people. [37]
[38]

Maruti Suzuki in its statement on the unrest,[39] announced that all work at the Manesar plant has

been suspended indefinitely.[32] The shut down of Manesar plant is leading to a loss of about Rs 75
crore[40] per day.[41] On 21 July 2012, citing safety concerns, the company announced
a lockout under The Industrial Disputes Act, 1947 pending results of an inquiry the company has

requested of the Haryana government into the causes of the disorder. Under the provisions of The
Industrial Disputes Act for wages, the report claimed, employees are expected to be paid for the
duration of the lockout.[40] On 26 July 2012, Maruti announced employees would not be paid for the
period of lock-out in accordance with Indian labour laws. The company further announced that it will
stop using contract workers by March 2013. The report claimed the salary difference between
contract workers and permanent workers has been much smaller than initial media reports - the
contract worker at Maruti received about 11,500 per month, while a permanent worker received
about 12,500 a month at start, which increased in three years to 21,000-22,000 per month.[42] In a
separate report, a contractor who was providing contract employees to Maruti claimed the company
gave its contract employees the best wage, allowances and benefits package in the region. [43]
Shinzo Nakanishi, managing director and chief executive of Maruti Suzuki India, said this kind of
violence has never happened in Suzuki Motor Corp's entire global operations spread across
Hungary, Indonesia, Spain, Pakistan, Thailand, Malaysia, China and the Philippines. Mr. Nakanishi
went to each victim apologising for the miseries inflicted on them by fellow workers, and in press
interview requested the central and Haryana state governments to help stop such ghastly violence
by legislating decisive rules to restore corporate confidence amid emergence of this new 'militant
workforce' in Indian factories. He announced, "we are going to de-recognise Maruti Suzuki Workers
Union and dismiss all workers named in connection with the incident. We will not compromise at all
in such instances of barbaric, unprovoked violence." He also announced Maruti plans to continue
manufacturing in Manesar, that Gujarat was an expansion opportunity and not an alternative to
Manesar.[44][45]
The company dismissed 500 workers accused of causing the violence and re-opened the plant on
21 August, saying it would produce 150 vehicles on the first day, less than 10% of its capacity.
Analysts said that the shutdown was costing the company 1 billion rupees ($18 million) a day and
costing the company market share.[46] In July 2013, the workers went on hunger strike to protest the
continuing jailing of their colleagues and launched an online campaign to support their demands. [47]

Products and services[edit]

Current models[edit]
Model

Launched

Category

Omni

1984

Minivan

Gypsy

1985

SUV

WagonR

1999

Hatchback

Swift

2005

Hatchback

Grand Vitara

2007

Mini SUV

DZire

2008

Sedan

Image

Ritz

2009

Hatchback

Eeco

2009

Hatchback

Alto K10

2010

Hatchback

Ertiga

2012

Mini MPV

Alto 800

2012

Hatchback

Stingray

2013

Hatchback

Celerio

2014

Hatchback

Ciaz

2014

Sedan

Discontinued models[edit]
Model

Launched

Discontinued

Category

Estilo

August 2009

2013

Hatchback

Gypsy E

1985

2000

SUV

1000

1990

2000

Sedan

Zen

1993

2006

Hatchback

Esteem

1994

2008

Sedan

Image

Baleno

1999

2007

Sedan

Versa

2001

2010

Minivan

Grand Vitara XL7

2003

2007

Mini SUV

800

1983

2012

Hatchback

Alto

2000

2012

Hatchback

A-star

2008

2014

Hatchback

Sales and service network[edit]

As of 31 March 2014 Maruti Suzuki has 933 dealerships across 666 towns and cities in
all states and union territories of India. It has 3,060 service stations (inclusive of dealer workshops
and Maruti Authorised Service Stations) in 1,454 towns and cities throughout India.[48] It has 30
Express Service Stations on 30 National Highways across 1,436 cities in India.
Service is a major revenue generator of the company. Most of the service stations are managed on
franchise basis, where Maruti Suzuki trains the local staff. Other automobile companies have not
been able to match this benchmark set by Maruti Suzuki. The Express Service stations help many
stranded vehicles on the highways by sending across their repair man to the vehicle. [49][50]

Maruti Insurance[edit]
Launched in 2002 Maruti Suzuki provides vehicle insurance to its customers with the help of the
National Insurance Company, Bajaj Allianz, New India Assurance and Royal Sundaram. The service
was set up the company with the inception of two subsidiaries Maruti Insurance Distributors Services
Pvt. Ltd and Maruti Insurance Brokers Pvt. Limited[51]
This service started as a benefit or value addition to customers and was able to ramp up easily. By
December 2005 they were able to sell more than two million insurance policies since its inception. [52]

Maruti Finance[edit]
To promote its bottom line growth, Maruti Suzuki launched Maruti Finance in January 2002. Prior to
the start of this service Maruti Suzuki had started two joint ventures Citicorp Maruti and Maruti
Countrywide with Citi Group and GE Countrywide respectively to assist its client in securing loan.
[53]

Maruti Suzuki tied up with ABN Amro Bank, HDFC Bank, ICICI Limited, Kotak Mahindra, Standard

Chartered Bank, and Sundaram to start this venture including its strategic partners in car finance.
Again the company entered into a strategic partnership with SBI in March 2003 [54] Since March 2003,
Maruti has sold over 12,000 vehicles through SBI-Maruti Finance. SBI-Maruti Finance is currently
available in 166 cities across India.[55]
Citicorp Maruti Finance Limited is a joint venture between Citicorp Finance India and Maruti Udyog
Limited its primary business stated by the company is "hire-purchase financing of Maruti Suzuki
vehicles". Citi Finance India Limited is a wholly owned subsidiary of Citibank Overseas Investment
Corporation, Delaware, which in turn is a 100% wholly owned subsidiary of Citibank N.A. Citi
Finance India Limited holds 74% of the stake and Maruti Suzuki holds the remaining 26%. [56] GE
Capital, HDFC and Maruti Suzuki came together in 1995 to form Maruti Countrywide. Maruti claims
that its finance program offers most competitive interest rates to its customers, which are lower by
0.25% to 0.5% from the market rates.[citation needed]

Maruti TrueValue[edit]

Maruti True service offered by Maruti Suzuki to its customers. It is a market place for used Maruti
Suzuki Vehicles. One can buy, sell or exchange used Maruti Suzuki vehicles with the help of this
service in India. As of 31 March 2010 there are 342 outlets.[citation needed]

N2N Fleet Management[edit]

N2N is the short form of End to End Fleet Management and provides lease and fleet management
solution to corporates. Clients who have signed up of this service include Gas Authority of India
Ltd, DuPont, Reckitt Benckiser, Doordarshan, Singer India, National Stock Exchange of India and
Transworld. This fleet management service include end-to-end solutions across the vehicle's life,
which includes Leasing, Maintenance, Convenience services and Remarketing. [57]

Maruti Accessories[edit]
Many of the auto component companies other than Maruti Suzuki started to offer components and
accessories that were compatible. This caused a serious threat and loss of revenue to Maruti
Suzuki. Maruti Suzuki started a new initiative under the brand name Maruti Genuine
Accessories to offer accessories like alloy wheels, body cover, carpets, door visors, fog lamps,
stereo systems, seat covers and other car care products. These products are sold through dealer
outlets and authorized service stations throughout India.[58]

Maruti Driving School[edit]

A Maruti Driving School in Bangalore

As part of its corporate social responsibility Maruti Suzuki launched the Maruti Driving School in
Delhi. Later the services were extended to other cities of India as well. These schools are modelled
on international standards, where learners go through classroom and practical sessions. Many
international practices like road behaviour and attitudes are also taught in these schools. Before
driving actual vehicles participants are trained on simulators.[59]
A the launch ceremony for the school Jagdish Khattar stated "We are very concerned about
mounting deaths on Indian roads. These can be brought down if government, industry and the

voluntary sector work together in an integrated manner. But we felt that Maruti should first do
something in this regard and hence this initiative of Maruti Driving Schools." [60]

1.

Problems: REASON FOR UNREST The plant workers wanted to register a new union

theMaruti Suzuki Employees Union (MSEU)and had alreadyapplied for registration,

something the management wasopposed to. More than 90 percent of these are contract
workers who workfor 10-12 hours for 4000-5000 per month. The workload andspeed is
extremely high and they have to face verbal abuseand even beatings by the supervisors and
security guards.19-06-2013 GBE- MARUTI UNREST GROUP !1 3
2. 4. MANESAR VIOLENCE JULY 201219-06-2013 GBE- MARUTI UNREST GROUP !1
4WORKERS DEMANDS:A five-fold increase in basic salary,a monthly conveyance
allowanceof 10,000,a laundry allowance of 3,000,a gift with every new car launch, and
ahouse for every worker who wants one orcheaper home loans for those who wantto build
their own houses.In addition to this compensation andnormal weekend/holidays, the
uniondemanded the current four paid weeks ofvacation be increased to 7 weeks.
3. 5. PROBLEM FROM WORKERS VIEW POINT If the floor supervisor is rude and even
slaps us, he is awarded with apromotion but in case a labourer dares to reply, he is issued a
notice ongrounds of disciplinary action," said Rajender Kumar, a technicianRevengefor Junes
strike. Cockroaches and dead flies found in the food in the hurried lunch-breakthat workers
earn in the canteen km from the working station. The tea was without tea leaves or sugar
in the 7 minute break The company doctor give heavy doses of instant medicines even
onminor complaint so that disruption of work could be prevented. One days wage cut of
Rs.1500, two days Rs.2200, three days cut of Rs.7-8000 is implemented, so that almost the
total months wage is cut. One second late into punching-card entry is a days wage cut, but
theyhave to give full production for that day too. Forced to fill an undertaking form, which
means that in case of anyproblem, workers cannot raise any objections against
management.19-06-2013 GBE- MARUTI UNREST GROUP !1 5
4. 6. `19-06-2013 GBE- MARUTI UNREST GROUP !16Shares of Maruti fell as much6.1%
after the company declaredthe lockout. They closed 5.65%lower at 1,079.90
rupees,underperforming a 1.6% decline inthe main index.In Tokyo, Suzuki shares fell
3.94%to 1,366 yen in a market down1.86%.Marutis net profit fell 29% to16.35 billion rupees
($295.6million) in the year ended March31 Its vehicle sales fell nearly 11%to 1.13 million
units.OUTCOME OF THE STRIKE

Challenges: Maruti faces challenge in defending market

share without SUVs'

NEW DELHI: With the preference for SUVs and multi-purpose vehicles growing fast in the country, Maruti
Suzuki India will face a challenge in increasing or maintaining itsmarket share unless it has substantial
presence in the segment, according to the company's outgoing Managing Director and CEO Shinzo
Nakanishi.
"The SUVs and multi-purpose vehicles segment has been growing very fast in India but we are not
growing there. We need to have a stronger presence there. Having just the Ertiga is not enough,"
Nakanishi told reporters here.

He said while the company has been focusing on small cars, which it its strength, the competition has
been tough and the "challenge for MSI" is to have a bigger presence in the SUV/MPVs segment in order
to "increase or maintain its market share".
"We have to bring some more models there," he said without elaborating on the company's plans for
launching new products in the segment. In last year's Auto Expo here, the company had showcased a
concept of a compact SUV named XA Alpha.
According to Society of Indian Automobile Manufacturers (SIAM), while passenger car sales in India
during the April -February period this fiscal has declined by 4.64 per cent to 17,14,796 units as compared
to 17,98,155 in the year-ago period, utility vehicles sales have grown by 54.46 per cent to 4,99,794 units
from 3,23,584 units last fiscal.
Citing another challenge for MSI, he said the company has been pushing for reducing the level of import
by its vendors to bring down the overall cost but "it is still slow and we have to discuss with them how to
increase the overall levels of localisation".
Nakanishi, who described his first visit to India way back in 1982 "was like coming with a blind eye", was
confident that the current slump in the market is temporary and the country will become one of the biggest
auto markets in the world.
"At that time I didn't know India... but over the years we have grown here. Yes, the market is slow right
now but in the long term, the auto industry and India have a bright future considering the
country's economy, expected increase in per capita income and growth of middle class," he said, adding
prospects for growth of auto industry in India was brighter even when compared to his home country
Japan.
"There (in Japan) the youngsters don't want to buy cars, they use the public transport system more. I
hope it doesn't happen here (in India)," he quipped.

Nakanishi, 65, who has been associated with MSI since its inception three decades ago, will retire on
April 1 and Kenichi Ayukawa will take over as the Managing Director and Chief Executive Officer.