A STUDY ON CONSUMER BUYING BEHAVIOUR TOWARDS MARUTI SUZUKI

WITH REFERENCE TO DHARMAPURI

INTRODUCTION
CONSUMER BEHAVIOUR
Our society is a land of diversity. We see diversity at all level exist among consumers,
among nation, culture, food and taste among marketers and even among consumers behavior
theoretically perspective. However, despite prevailing diversity in our society.
The term consumers behavior refers to the behavior that consumers display in searching
for purchasing, using, evaluating a disposing of product and service that they expect will satisfy
their needs. To study consumers behavior to spend their available resource to understand and
predict behavior in the market place, it also promotes understanding of the role that consumption
play in the lines of individuals.
Consumer behaviour study include the study what they buy, why they buy it, when they
buy, where they buy it, how often they buy it and how often they use it. Consumer research takes
place at every phases of the consumption process, before the purchase, during the purchase and
after the purchase; consumer behavior research goes far beyond these facts of consumer behavior
and considered the uses of consumers make of the good they buy and their subsequent
evaluation.
Consumer behavior is inter disciplinary, that it is based on concept and theories about
people that have been involved by scientist in such diverse disciplines as psychology, sociology,
social psychology, cultural anthropology and economics.
Consumer behavior has been an integral part of strategic market planning. The belief that
ethics and social responsibility should also be Integral component of every marketing decision is
a revised market concept.
The term consumer is often used to describe two different kinds of consuming entitles the
personal consumer and the organizational consumers. The personal consumers buys goods and
service for his/her own use for the organizational encompasses for profit and non profit business,
govt. agencies and institution all of which must buy product, equipment and service in order to
run their organization.
Introduction to buying motives Consumer or buyer is the central figure of all marketing
activities. It is the consumer who determines the growth, prosperity and even existence of a
business enterprise. Hence the marketer should always feel the pulse of customers. In order to
understand the pulse of the customers, the marketer needs to understand fully the working of
buyers mind. It helps him to plan his production and distribution to suit to the needs and
convenience of customers.It also helps him to plan suitable marketing strategies. Thus it is very
essential for every marketer to know his customers buying motives. Buying motives Motive is a
strong feeling, instinct, desire or emotion that makes a person to do something. When a motive
makes a person to buy a product, then it becomes a buying motive. Thus buying motive means
the influence and considerations which makes a customer to buy a particular product. According
to D.J.Duncan, buying motives are those influences or considerations which provide the
impulse to buy, induce action or determine choice in the purchase of goods and services. Buying
motives are mainly two types, manifest motives and latent motives. Manifest motives are those
motives which are known to the customer and also ready to admit them.
Consumer Behavior: Turning to the Web and New C2C Tools
Consumers today have a multitude of sources from which to gather information during
the vehicle buying process, but the Internet tops the list. The web has become a standard resource
in the shopping process for eight out of 10 consumers when researching car purchases. However,
the way they use it is changing. As the web matures, vehicle buyers are visiting fewer sites and
focussing more on manufacturer and C2C websites and less on third-party information sites and
independent e-tailer sties.
Manufacturer Sites a Key Information Source
Just two years ago, information websites were identified as the number one information
source by web users responding to the Cars Online survey (tied with family and friends and
manufacturer specific dealer), named by 55% of consumers. This year, they dropped to the
number four source, named by 41% of web users. In comparison, manufacturer sites are now the
top source for consumers who use the web when researching vehicles, named by 70% of
respondents. Two years ago manufacturer sites held the number three position, named by 43% of
web users. The use of dealer websites has remained steady, with about half of web users turning
to these sites.
Factors in Vehicle Choice Key
 When it comes to making their final decision about which vehicle to buy, consumers
focus on factors such as reliability, safety, price and fuel economy. At the bottom of the list are
cash-back incentives, named by fewer than half of consumers. The importance of incentives as a
deciding factor has declined for the past several years, indicating that consumers today seem less
interested in gimmicks when it comes to their car purchases. Where consumers are in the buying
cycle can make a difference in how they rank the factors that influence their vehicle choice. For
example, additional warranty coverage is important to consumers who are furthest away from the
point of purchase; it was named by 69% of respondents who were 13 to 18 months from
purchase. However, the number declines as consumers get closer to actually buying the car: 55%
of respondents who were within three months of purchase said extra warranty coverage was
important. This reflects the fact that consumers will narrow down the factors that really matter to
them as they get closer to the point of purchase. Demographic factors such as age and gender
accounted for some variances. For example, older consumers tend to put more emphasis on
reliability and safety than do younger respondents. Those in the 50-plus age group were also
more concerned with environmental issues and fuel economy. The youngest respondents were
most likely to rate the ability to research information on the Internet as an important factor in
their vehicle decision. Women tend to rate most of the factors as more important than do men.
The difference was most pronounced for cash-back incentives, low financing, safety,
environmental issues, fuel economy and additional warranty coverage.

Going Green: Fuel Efficiency Takes Centre Stage

Fuel efficiency and environmental issues have moved to the forefront in consumers
minds and in automotive industry forums thanks to factors including global warming, fluctuating
gasoline prices, and proposed legislation to increase fuel efficiency and reduce CO2 emissions.
This growing interest in so-called green vehicles was evident in this years Cars Online research.

More than one-quarter of respondents said they currently own or lease a fuel-efficient
vehicle while almost half said they are planning to buy or thinking seriously about buying a fuel-
efficient vehicle. Not surprisingly, the numbers for alternative-fuel vehicles were lower. Just 2%
of respondents currently own an alternative-fuel vehicle and 11% are planning to buy or thinking
seriously about buying one. The most common type of alternative-fuel vehicle represented in the
survey were gas/ electric hybrids, named by about half of current alternative-fuel car owners.

Biodiesel vehicles were the second most common, named by 15%. The alternative-fuel market
remains in transition and its still too early to tell how it will ultimately shake out, although sales
are expected to continue to grow. For example, J.D. Power and Associates predicts that U.S.
sales of hybrid vehicles will increase by 35% in 2007, compared with 2006.

Current ownership of fuel-efficient and alternative-fuel vehicles tended to be quite consistent

across gender and age groups, although the oldest consumers were somewhat more likely to be
seriously thinking about buying an alternative-fuel car.
CONSUMER BUYING vs. ORGANIZATIONAL BUYING
Final (or ultimate) consumers purchase for:
personal,
family, or
household use
Organizational consumers purchase for:
further production,
usage in operating the organization, and/or
resale to other consumers
Consumer Buying Behavior
The decision processes and acts of final household consumers associated with evaluating,
buying, consuming, and discarding products for personal consumption
Consider the purchase an automobile. You generally will not consider different options until
some event triggers a need, such as a problem needing potentially expensive repair. Once this
need has put you "on the market", you begin to ask your friends for recommendations regarding
dealerships and car models. After visiting several dealerships, you test drive several models and
finally decide on a particular model. After picking up your new car, you have doubts on the way
home, wondering if you can afford the monthly payments, but then begin to wonder if instead
you should have purchased a more expensive but potentially more reliable model. Over the next
five years, the car has several unexpected breakdowns that lead you to want to purchase a
different brand, but you have been very happy with the services of the local dealership and
decide to again purchase your next car there.
In this particular case, the following generic model of consumer decision making appears to
hold:
=====>need recognition
=====>information search
=====>evaluation of alternatives
=====>purchase decision
=====>post purchase behaviour

Now consider the purchase of a quart of orange juice. You purchase this product when you do
your grocery shopping once per week. You have a favorite brand of orange juice and usually do
your grocery shopping at the same store. When you buy orange juice, you always go to the same
place in the store to pick it up, and never notice what other brands are on the shelf or what the
prices of other brands are. How is it that the generic model above works differently in this
second scenario? Why does it work differently? Why would we generally need the ministrations
of a sales person in the sale of a car, but we generally do not need the help of a salesperson in the
purchase of orange juice?
How can the marketer of orange juice get a consumer like you to exert more effort into
information search or to consider alternative products? How is it that the marketer of your brand
got you to ignore alternative competing brands? What is the involvement of salespeople in sales
promotions that might be associated with products such as orange juice?
Consumer behavior researchers are not so interested in studying the validity of the above generic
model, but are more interested in various factors that influence how such a model might work.

GROUP INFLUENCES ON CONSUMER BEHAVIOR

Culture
the set of basic values, beliefs, norms, and associated behaviors that are learned by a member of
society
Note that culture is something that is learned and that it has a relatively long lasting effect on the
behaviors of an individual. As an example of cultural influences, consider how the salesperson in
an appliance store in the U.S. must react to different couples who are considering the purchase of
a refrigerator. In some subcultures, the husband will play a dominant role in the purchase
decision; in others, the wife will play a more dominant role.
Social Class
A group of individuals with similar social rank, based on such factors as occupation, education,
and wealth
Reference Groups
Groups, often temporary, those affect a person's values, attitude, or behaviors
E.g., your behaviors around colleagues at work or friends at school are probably different
from your behaviors around your parents, no matter your age or stage in the family life
cycle. If you were a used car salesperson, how might you respond differently to a
nineteen year old prospect accompanied by her boyfriend from one accompanied by two
girlfriends?
Opinion leader
A person within a reference group who exerts influence on others because of special
skills, knowledge, personality, etc.
o You might ask the webmaster at work for an opinion about a particular software
application. Software manufacturers often give away free beta copies of software
to potential opinion leaders with the hope that they will in turn influence many
others to purchase the product.
Family
A group of people related by blood, marriage, or other socially approved relationship

ENVIRONMENTAL / SITUATIONAL INFLUENCES ON CONSUMER BEHAVIOR

Circumstances, time, location, etc.
Do you like grapes? Do you like peas?
You might like grapes as a snack after lunch, but probably not as a dessert after a fancy meal in a
restaurant. You might like peas, but probably not as a topping on your pancakes. Everyday
situations cause an interaction between various factors which influence our behaviors. If you
work for tips (a form of incentive related to commission) as a waiter or waitress, you must
certainly be aware of such interactions which can increase or decrease your sales.
If you are doing your Saturday grocery shopping and are looking for orange juice, you are
probably much more sensitive to price than if you stop at the quick store late at night, when you
are tired and cranky, after a late meeting at the office. A prospect shopping for a new automobile
while debating the wisdom of a necessary expensive repair to his car might be more interested in
what cars are on the lot than in shopping for the best deal that might involve a special order.
INTERNAL INFLUENCES ON CONSUMER BEHAVIOR
Personality
A person's distinguishing psychological characteristics that lead to relatively consistent and
lasting responses to stimuli in the environment
We are each unique as individuals, and we each respond differently as consumers. For example,
some people are "optimizers" who will keep shopping until they are certain that they have found
the best price for a particular item, while other people are "satisficers" who will stop shopping
when they believe that they have found something that is "good enough." If you are a
salesperson in a retail shoe store, how might you work differently with these two personalities?
Lifestyle and Psychographics
lifestyle is a pattern of living expressed through a person's activities, interests, and
opinions
psychographics is a technique for measuring personality and lifestyles to developing
lifestyle classifications.
Motivation: Multiple motives
Consumers usually have multiple motives for particular behaviors. These can be a combination
of:
manifest
known to the person and freely admitted
latent
unknown to the person or the person is very reluctant to admit
Note: different motives can lead to the same behavior; observing behavior is not sufficient to
determine motives.
TYPES OF CONSUMER PROBLEM-SOLVING PROCESSES
Routinized
used when buying frequently purchased, low cost items
used when little search/decision effort is needed
e.g., buying a quart of orange juice once per week
Limited Problem Solving
used when products are occasionally purchased
Used when information is needed about an unfamiliar product in a familiar product
category.
Extended problem solving
used when product is unfamiliar, expensive, or infrequently purchased
e.g., buying a new car once every five years
Under what sorts of conditions would the assistance of a salesperson be needed? Not
needed?
POST-PURCHASE CONSUMER BEHAVIOR
Satisfaction
After the sale, the buyer will likely feel either satisfied or dissatisfied. If the buyer beleives that
s/he received more in the exchange than what was paid, s/he might feel satisfied. If s/he believes
that s/he received less in the exchange than what was paid, then s/he might feel dissatisfied.
Dissatisfied buyers are not likely to return as customers and are not likely to send friends,
relatives, and acquaintences. They are also more likely to be unhappy or even abusive when the
product requires post-sale servicing, as when an automobile needs warranty maintenance.
Cognitive dissonance
It has to do with the doubt that a person has about the wisdom of a recent purchase
It is very common for people to experience some anxiety after the purchase of a product that is
very expensive or that will require a long term commitment. Jane and Fred, for example, signed
a one year lease on an apartment, committing themselves to payments of $1500 per month. A
week later, they are wondering if they should have instead leased a smaller $900 apartment in a
more rough part of town; they are not sure if they really can afford this much of a monthly
obligation. Dick and Sally, on the other hand, ultimately rented the $900 apartment, and now are
wondering if the savings in rent will be offset by noisy and sometimes unsafe conditions in this
neighborhood.
Perhaps neither couple would be experiencing this anxiety if their landlords had given them just
the smallest of assurances that they had made a good decision. After a close on products that are
expensive or that require a long term commitment, the salesperson should provide the prospect
with some reasons to be happy with the decision. Allow the car buyer to reinforce her own
positive feelings by calling her a week after the purchase to ask how things are going. Call the
new life insurance policy holder after two months to see if there are any questions; a lack of
questions can only help the buyer to convince himself that he did the right thing.
The four-wheeler Market is even expanding and ever changing showing new trends. Almost
every day, we get to know about the launch of new model by different company Sales. Their
market intensified between the domestic and the multinational brands. The strategy and also their
selling policy. competitors gets intensified between the domestic and the multinational brands.
The company producing better product enjoy the benefit.
NEED FOR THE STUDY
A brand is a set of expectations and associations evoked from company or product. A brand is
how key constituents- customers, employees etc. experiences what you do. Some brands are of
such great importance to people, that we speak of them as a part of ones life and identity, being
used to express one. Some would say that these brands have their own personality, the brand
perception, which can be defined as the set of human characteristics associated with a given
brand.
Because many people interact with brand as though they were other people, it is important to
understand what a brand perception consists of, and how its characteristics can be used to affect
the relationship between the brands and its users. Knowing and understanding the brand
perception gives a good insight into this relationship, and into peoples attitudes towards the
brand, and is also an important guide to communicating the brand.
Like apparel and lifestyles brands, a car is extension of ones perception. People buy cars which
either matches their personalities or those which provide them opportunities of being perceived
as somebody they aspire to be. This becomes significant as consumers move up the value chain
from small compact cars to midsize and upwards.
 Surveying the relevant consumer base through exhaustive questionnaire.
Understand the elements underplaying in each segment
Deducing A analytical overview through different statistical methods

OBJECTIVES OF THE STUDY:

To study their satisfaction level of customers of different cars available in Maruthi

suzuki.
To study the importance of various attribute which effect the purchasing decision of
customers in regard of cars.
To study the awareness level of different cars in Maruthi suzuki.
To study the importance of dealer and their influence in marketing/sale for cars in
Dharmapuri.
To study consumers buying behaviours.
To find out the expectation of the existing possessing and prospective customers of the
company.
To study the impact of media on the customers.
To study the satisfaction level of the customers on overall performance and after sale
service of their existing cars.
To study different promotional scheme they expect for purchasing a new car.
SCOPE OF THE STUDY:
This study is the art of using charts and other technical indicators to assess and
to interpret customer perception.
The study on fluctuations in maruthi markets helps in understanding the
fluctuations of maruthi market. It helps customer to be aware about deviations
in the resale of market.
Analyses can advise of timing of stock buy and sell on the basis that the
historical data.

LIMITATION OF THE STUDY:

Data collected only for the period of 6 months.
 Time available for the researcher is one of the major problems.
The analysis made by only for Maruthi company scrips.
The buy and sell for all car only for one market price.
We cannot predict the market movements accurately whether the trend is moving
up or Coming down. We can predict the market movements only based on the
assumptions
The research based on secondary data.
The companies are selected on the basis of the Market Capitalization.

RESEARCH METHODOLOGY

(1) Preliminary Survey: - The project study was undertaken general discussion and
informal interview with the customer both possessing and prospective. The objective
were set mainly to gain an idea about consumers buying behaviors of cars.

(2) Data Collection: - The data were collected from primary sources. The primary data were
collected from the customer both possessing and prospective. Surveying method through
personal or direct interviews with the help of questionnaire-designed specification for the
purpose did this.

(3) Questionnaire Design:- Primary data was collected through well framed questionnaire.
The questionnaire had two parts, one part for possessing customers and other part for
prospective customer. Question was framed keeping mind. The various information
required as per the objectives. Each question was directed towards getting information
regarding Maruti as well as other competitors. The questionnaire contained both open
ended and close ended question. Also question with multiple-choice answers, degree of
importance scale etc. were included. All effort were made to that the questionnaire was
simple and precise and also adequate care was taken about the language, structure and
format of questionnaires.
 (4) Sample Size: The sample was selected on the basis of simple random sampling. A total
50 customer surveyed.
The total sample size in segmented under the following zones:
STATISTICAL TOOLS APPLIED
The methods of tools of analysis used in this study are
1. Simple percentage analysis
2. Chi-square test
SIMPLE PERCENTAGE ANALYSIS
The analysis is done based on the response given by the consumer for the questionnaire.
The various parameters that are related to the consumer preference have been analyzed in the
selection. Four point scales is used in questionnaire and several factors related to consumer
preference is analyzed using simple percentage analysis. It is one of the powerful tools of
analysis to calculate single average value that represents entire sample.
Formula:
No. of respondents
Percentage = -------------------------------------- * 100
Total No. of respondents

CHI-SQUARE TEST
The chi-square test is used to test whether there is a significant difference between the
observed number of responses in each category and the expected number of responses for such
category under the assumptions of null hypothesis. It is one of the simplest and most widely used
non-parametric tests in statistical work.
Formula:

2
=
Where,
O = Observed frequency
E = Expected frequency
The calculated value is compared with table value given degrees of freedom at specified
level of significance. If the observed value is greater than the table value then there exists a
significant relationship between the factors and if the observed value is lesser than it is not
considered significant.

REVIEW OF LITERATURE
U. Thiripurasundari (2011) Brand Equity is the added value endowed by the brand to the
Product. Although the idea of using a name or a symbol to enhance a products value has been
known to marketers for a long time, brand equity has gained a renewed interest in recent years.
The objectives of the study were to analyse the importance of various factors like brand
knowledge, brand preference, brand loyalty, brand application etc. in car market in Pondicherry.
The primary data were collected from three hundred car owners through an interview schedule.
From the five factors, brand application factor has been rated as the most important factor in car
industry. This study shows that it is possible to ascertain where a company should focus its
improvement efforts in order to make it payoff.

Prof. Pallawi B. Sangode (2011) This research paper is based on the findings of
comparative study of service quality of Maruti Suzuki and Hyundai Showrooms in Nagpur.
Service quality is a fundamental aspect of service provision, and this is especially the case with
motor vehicles, where substantial profits are generated in the servicing of vehicles. The study
was conducted using a convenience sample of forty respondents who were owners of Maruti and
Hyundai cars. The questionnaire was a self-completion questionnaire consisting of 26 questions.
Dr P. Sathyapriya (2011) India is becoming a hub of major manufacturing industries and
the automobile industry (in specific for passenger car segment) makes rapid progress in the
country. After de-licensing of the industry in 1991, a number of global players have opened their
plants in India. The players of automobile industry are developing new
strategies to increase their market share. They do this by launching new variants in existing
models and new models targeting people who prefer cars in various car segments. An important
feature of this industry is that the industry is sensitive and the choice of a brand in passenger cars
varies across segments. The current research explores the choice of a brand in different segments
and the factors influencing the same with weighted average ranking. The study was conducted in
Chennai with six hundred and three respondents who owned a car. The impact of demographic
variables on their choice of a passenger car was studied with the chi-square test. The study
revealed that factors influencing the brand preference among the consumers who prefer
passenger cars in mid and premium segments vary, and age and income influence their brand
choice.

Dr Ajoy S Joseph (2011) One of the most important factors that influence purchase of
passenger cars in India is the availability of auto finance or consumer credit. This empirical study
analyses the behavioural pattern exhibited by passenger car customers towards auto loan
schemes and Financiers when they purchase their cars. The study was based on the data collected
from five hundred and twenty five passenger car owners consisting of professionals, employees
of public and private sector, businessmen and agriculturist in Dakshina Kannada district of
Karnataka State. The respondents have been broadly categorised into three groups on the basis of
original price range of their cars viz. cars in the price range of Rs. 2 4 lakhs, Rs. 4 6 lakhs
and Rs. 6 9 lakhs. The study finding indicates that the most important three factors considered
by car purchasers while deciding auto finance company were less processing time, easy
documentation and explanation of the financing scheme by the staff.

Ernest Johnson (2011) Signatory to the World Trade Organisations, India could no
longer apply quantitative restrictions on the import of used cars. As the used cars are very
inexpensive, they would pose a serious threat to the Indian car industry. To counteract the threat,
the Government of India has built tariff and non-tariff barriers. In this study, an attempt has been
made to understand the attitude of car buyers towards the import of used cars by using
information system. The results reveal that one third of the respondents show interest in the
imported used cars. Also, it is found that the demographic factors such as age, monthly
household income and the number of earning members in the family have a significant impact on
the positive attitude towards the imported used cars.

Asghar Afshar Jahanshahi (2011) In this research, the author addresses the following
questions that are becoming increasingly important to managers in automotive industries: is there
a relationship between customer service and product quality with customer satisfaction and
loyalty in the context of the Indian automotive industry? If yes, how is the relationship between
these four variables? The automotive industry in India is one of the largest in the world and one
of the fast growing globally. Customer satisfaction and loyalty are the most important factors
that affect the automotive industry. On the other hand, customer service can be considered an
innate element of industrial products. Customer service quality, product quality, customer
satisfaction and loyalty can be measured at different stages, for example, at the beginning of the
purchase, and one or two years after the purchase. The population of the study comprised all of
the Tata Indica car owners in Pune. The hypotheses of the study were analysed using regression
and ANOVA. The results of the study showed that there was a high positive correlation between
the constructs of customer service and product quality with customer satisfaction and loyalty.

Dr S. Subadra (2010) In recent days India is witnessing a change in consumerism. The

market is now predominantly consumer-driven. The focus is shifting from product-based
marketing to need-based marketing. Consumer is given many options to decide. Passenger car
segment is no exception to this general trend. An effective market communication is imperative
for reaching the target audience. So it is important to study the consumer perceptions and
behaviour of the car owners which will give one feedback on how marketing strategies can be
worked. Namakkal town in Tamil Nadu State, which is in the southern part of India, has a
progressive and growing market for cars. This town was selected for this study. Pre-testing was
done by an Interview schedule which was developed and administered to a convenient sample of
twenty five car owners. The simple random sampling technique was adopted in the study to
select the sample respondents. As the size of the universe was restricted, the study was
conducted on the respondents who were the owners of all the segments of passenger cars.

OVERVIEW OF THE STUDY AREA

ABOUT THE INDUSTRY:
Maruti Suzuki is one of India's leading automobile manufacturers 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 Indian 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, based on the Suzuki Alto kei car which at the time was
the only modern car available in India, its' only competitors- the Hindustan Ambassador and
Premier Padmini were both around 25 years out of date at that point. Through 2004, Maruti
Suzuki has produced over 5 Million vehicles. Maruti Suzukis are sold in India and various
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.
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.
Due to the large number of Maruti 800s sold in the Indian market, the term "Maruti" is
commonly used to refer to this compact car model. Till recently the term "Maruti", in popular
Indian culture, in India Hindu's lord Hanuman is known as "maruti", was associated to the
Maruti 800 model.
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 Suzukis 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 the 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.
Pressure started mounting on Indira and Sanjay Gandhi to share the details of the progress on the
Maruti Project. Since country's resources were made available by mother to her son's pet project.
A delegation of Indian technocrats was assigned to hunt a collaborator for the project. Initial
rounds of discussion were held with the giants of the automobile industry in Japan including
Toyota, Nissan and Honda. Suzuki Motor Corporation was at that time a small player in the four
wheeler automobile sector and had major share in the two wheeler segment. Suzuki's bid was
considered negligible.
In the initial rounds of discussion the giants had their bosses present and in the later rounds
related to the technical discussions executives of these automobile giants were present. Osamu
Suzuki, Chairman and CEO of the company ensured that he was present in all the rounds of
discussion. Osamu in an article writes that it subtly massaged their (Indian delegation) egos and
also convinced them about the sincerity of Suzuki's bid. In the initial days Suzuki took all steps
to ensure the government about its sincerity on the project. Suzuki in return received a lot of help
from the government in such matters as import clearances for manufacturing equipment (against
the wishes of the Indian machine tool industry then and its own socialistic ideology), land
purchase at government prices for setting up the factory Gurgaon and reduced or removal of
excise tariffs. This helped Suzuki conscientiously nurse Maruti Suzuki through its infancy to
become one of its flagship ventures.
Maruti Suzuki's A-Star vehicle during its unveiling in Pragati Maidan, Delhi. A-Star, Suzuki's
fifth global car model, was designed and is made only in India. Besides being Suzuki's largest
subsidiary in terms of car sales, Maruti Suzuki is also Suzuki's leading research and development
arm outside Japan
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 till Suzuki Motor Corporation gained the controlling stake. This highly profitable joint
venture that had a near monopolistic trade in the Indian 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.
Initially R.C.Bhargava was the managing director of the company since the inception of the joint
venture. Till today he is regarded as instrumental for the success of Maruti Suzuki. Joining in
1982 he held several key positions in the company before heading the company as Managing
Director. Currently he is on the Board of Directors. After completing his five year tenure, Mr.
Bhargava later assumed the office of Part-Time Chairman. The Government nominated Mr.
S.S.L.N. Bhaskarudu as the Managing Director on 27 August 1997. Mr. Bhaskarudu had joined
Maruti Suzuki in 1983 after spending 21 years in the Public sector undertaking Bharat Heavy
Electricals Limited as General Manager. Later in 1987 he was promoted as Chief General
Manager, 1988 as Director, Productions and Projects, 1989 Director, Materials and in 1993 as
Joint Managing Director.
Suzuki Motor Corporation didn't attend the Annual General Meeting of the Board with the
reason of it being called on a short notice. Later Suzuki Motor Corporation went on record to
state that Mr. Bhaskarudu was "incompetent" and wanted someone else. However, the Ministry
of Industries, Government of India refuted the charges. Media stated from the Maruti Suzuki
sources that Bhaskarudu was interested to indigenise most of components for the models
including gear boxes especially for Maruti 800. Suzuki also felt that Bhaskarudu was a proxy for
the Government and would not let it increase its stake in the venture. If Maruti Suzuki would
have been able to indigenise gear boxes then Maruti Suzuki would have been able to
manufacture all the models without the technical assistance from Suzuki. Till today the issue of
localization of gear boxes is highlighted in the press.
The relation strained when Suzuki Motor Corporation moved to Delhi High Court to bring a stay
order against the appointment of Mr. Bhaskarudu. The issue was resolved in an out-of-court
settlement and both the parties agreed that R S S L N Bhaskarudu would serve up to 31
December 1999, and from 1 January 2000, Jagdish Khattar, Executive Director of Maruti Udyog
Limited would assume charges as the Managing Director. Many politicians believed, and had
stated in parliament that the Suzuki Motor Corporation is unwilling to localize manufacturing
and reduce imports. This remains true, even today the gear boxes are still imported from Japan
and are assembled at the Gurgaon facility.
For most of its history, Maruti Udyog Limited had relatively few problems with its labour force.
Its emphasis of a Japanese work culture and the modern manufacturing process, first instituted in
Japan in the 1970s, was accepted by the workforce of the company without any difficulty. But
with the change in management in 1997, when it became predominantly government controlled
for a while, and the conflict between the United Front Government and Suzuki may have been
the cause of unrest among employees. A major row broke out in September 2000 when
employees of Maruti Udyog Ltd (MUL) went on an indefinite strike, demanding among other
things, revision of the incentive scheme offered and implementation of a pension scheme.
Employees struck work for six hours in October 2000, irked over the suspension of nine
employees, going on a six-hour tools-down strike at its Gurgaon plant, demanding revision of the
incentive-linked pay and threatened to fast to death if the suspended employees were not
reinstated. About this time, the NDA government, following a disinvestments policy, proposed to
sell part of its stake in Maruti Suzuki in a public offering. The Staff union opposed this sell-off
plan on the grounds that the company will lose a major business advantage of being subsidised
by the Government.
The standoff with the management continued to December with a proposal by the management
to end the two-month long agitation rejected with a demand for reinstatement of 92 dismissed
workers, with four MUL employees going on a fast-unto-death. In December the company's
shareholders met in New Delhi in an AGM that lasted 30 minutes. At the same time around 1500
plant workers from the MUL's Gurgaon facility were agitating outside the company's corporate
office demanding commencement of production linked incentives, a better pension scheme and
other benefits. The management has refused to pass on the benefits citing increased competition
and lower margins.

Maruti Suzuki offers 15 models, Maruti 800, Alto, WagonR, Estilo, A-star, Ritz, Swift, Swift
DZire, SX4, Omni, Eeco, Gypsy, Grand Vitara. Swift, Swift DZire, A-star and SX4 are
maufactured in Manesar, Grand Vitara is imported from Japan as a completely built unit (CBU),
remaining all models are manufactured in Maruti Suzuki's Gurgaon Plant.
Suzuki Motor Corporation, the parent company, is a global leader in mini and compact cars for
three decades. Suzukis technical superiority lies in its ability to pack power and performance
into a compact, lightweight engine that is clean and fuel efficient.
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.
Pressure started mounting on Indira and Sanjay Gandhi to share the details of the progress on the
Maruti Project. Since country's resources were made available by mother to her son's pet project.
A delegation of Indian technocrats was assigned to hunt a collaborator for the project. Initial
rounds of discussion were held with the giants of the automobile industry in Japan including
Toyota, Nissan and Honda. Suzuki Motor Corporation was at that time a small player in the four
wheeler automobile sector and had major share in the two wheeler segment. Suzuki's bid was
considered negligible.
Maruti Suzuki has two state-of-the-art manufacturing facilities in India.[12]. Both manufacturing
facilities have a combined production capacity of 1,000,000 vehicles annually.
The Gurgaon Manufacturing Facility has three fully integrated manufacturing plants and is
spread over 300 acres. All three plants have a 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, Swift and Eeco.
The Manesar Manufacturing Plant was inaugurated in February 2007 and is spread over 600
acres. Initially it had a production capacity of 100,000 vehicles annually but this was increased to
300,000 vehicles annually in October 2008. The Manesar Plant produces the A-star, Swift, Swift
DZire and SX4.
Four Wheeler Industry
Approximately 25 of Benz's vehicles were built before 1893, when his first four-wheeler was
introduced. They were powered with four-stroke engines of his own design. Emile Roger of
France, already producing Benz engines under license, now added the Benz automobile to his
line of products. Because France was more open to the early automobiles, more were built and
sold in France through Roger than Benz sold in Germany. From 1890 to 1895 Daimler and his
assistant, Maybach, either at the Daimler works or in the Hotel Hermann, where they set up shop
after falling out with their backers, built about 30 vehicles. Benz and Daimler seem to have been
unaware of each other's early work and worked independently.
In 1890, Emile Levassor and Armand Peugeot of France began producing vehicles with Daimler
engines, and so laid the foundation of the motor industry in France. George Selden of Rochester,
New York, who applied for a patent on an automobile in 1879, supposedly designed the first
American car with a gasoline internal combustion engine in 1877. In Britain there had been
several attempts to build steam cars with varying degrees of success with Thomas Rickett even
attempting a production run in 1860. Santler from Malvern is recognized by the Veteran Car
Club of Great Britain as having made the first petrol-powered car in the country in 1894
followed by Frederick William Lanchester in 1895 but these were both one-offs.[The first
production vehicles came from the Daimler Motor Company, founded by Harry J. Lawson in
1896, and making their first cars in 1897.
In 1892, Rudolf Diesel got a patent for a "New Rational Combustion Engine". In 1897 he built
the first Diesel Engine. In 1895, Selden was granted a United States patent(U.S. Patent 549,160 )
for a two-stroke automobile engine, which hinderd more than encouraged development of autos
in the United States. Steam, electric, and gasoline powered autos competed for decades, with
gasoline internal combustion engines achieving dominance in the 1910s.
Every other day a new model of car is being launched in the country, how many times you must
have wished to change that old car of yours and buy a hot set of wheels. However as you come
back to earth, bitter reality bites you; realization dawns in that you don't have such a big amount
of money to invest in a new car. Don't worry as several banks and financial institution have
donned the role of new age Santa Claus to make sure that your dream comes true. Today car
loans are not only available for brand new cars but they are also available for used cars.
In this section we will try to provide you with an insight into automobile financing so read on.
State Bank of India which is one of the largest nationalized banks in the country offers you the
following advantages
Longer repayment periods up to 7 years
Low processing
No advance EMI along with the down payment effectively increasing the amount of loan
Interest is calculated on the reducing balance method meaning every time you repay an
amount the interest is calculated on the remaining amount and not on the one which is out
standing at the beginning of the year.
The company gives a loan which is up to 2.5 times of one's net annual income, with the
minimum income cap of the applicant being 75000 rupees per annum. The company sanctions
loans for all new cars and for second hand cars which are not more than 5 years old. The bank
also provides loans to people who don't have an account with the bank provided they furnish
address proof, identity proof and other relevant documents. For more details click
http://www.sbi.co.in
UTI bank offers loans covering 85% of the cost of the vehicle plus registration and insurance or
20 times the net monthly salary and you can repay the loan with in a maximum period of 5 years
or 60 monthly equated installments.
Car Insurance gives the necessary cover if one meets with some unforeseen incident or an
accident. Car insurance offers a number of benefits. A no claim bonus is given to the policy
holder if no claims are made. It is transferable as it can be used even if one is changing the auto
insurance company.
Used car owners shouldn't feel that they are sidelined. Used car insurances help the second hand
car owners greatly. Those who can't afford the luxury cars and their high prices are opting for
used cars.
The Indian automobile industry is the tenth largest in the world with an annual production of
approximately 2 million units. Indian auto industry, promises to become the major automotive
industry in the upcoming years and the industry experts are hopeful that it will touch 10 million
units mark.
Indian automobile industry is involved in design, development, manufacture, marketing, and sale
of motor vehicles. There are a number of global automotive giants that are upbeat about the
expansion plans and collaboration with domestic companies to produce automobiles in India.
The major car manufacturers in India are Maruti Udyog, Hyundai Motors India Ltd., General
Motors India Pvt. Ltd., Honda Siel Cars India Ltd., Toyota Kirloskar Motor Ltd., Hindustan
Motors etc.
The two-wheeler manufacturers in India are Honda Motorcycle & Scooter India (Pvt.) Ltd.,
TVS, Hero Honda, Yamaha, Bajaj, etc. The heavy motors including buses, trucks, auto
rickshaws and multi-utility vehicles are manufactured by Tata-Telco, Eicher Motors, Bajaj,
Mahindra and Mahindra, etc.
Quick Facts:
First Indian to own a car in India was Jamshedji Tata.
First woman to drive a car in India was Mrs. Suzanne RD Tata.
The passenger car and motorcycle segment in the Indian auto industry is growing by 8-9
percent.
 Commercial vehicle will grow by 5.2 per cent.
The first automobile in India was rolled in 1897 in Bombay.
India is a potential emerging auto market.
Motorcycles contribute 80% of the two-wheeler industry.
Unlike the USA, the Indian passenger vehicle market is dominated by cars (79%).
India is the largest two-wheeler manufacturer in the world.
India's motorcycle segment will grow by 8-9 percent in the coming years. 11. India is the
fifth largest commercial vehicle manufacturer in the world. 12. India has the number one
global motorcycle manufacturer. 13. In Asia, India is the fourth largest car market.
The new chapter in the automobile industry is that of used cars. The massive demand of used
cars indicates that cars are becoming increasingly popular. Those who can't afford the luxury
cars and their high prices are opting for used cars. In today's time, customers are conscious and
diligently investing on car dealership. Car buyers are investing heavily a lot of time for both to
sell a car and buy car. There's also a number of car websites that have offering detailed
information on new car prices, used cars, car reviews, Chevrolet cars, jaguar cars and luxury
cars.
At present major Indian, European, Korean, Japanese automobile companies are holding
significant market shares. In commercial vehicle, Tata Motors dominates over 60% of the Indian
commercial vehicle market. Tata Motors is the largest medium and heavy commercial vehicle
manufacturer.
Among the two-wheeler segment, including scooters and mopeds- motorcycles have- major
share in the market. Hero Honda contributes 50% motorcycles to the market in which Honda
holds 46% share in scooter and TVS makes 82% of the mopeds in the country. In the three
wheeler industry in India, Piaggio holds 40% of the market share. Bajaj is the leader by making
68% of the three-wheelers.
Car manufacturers in India dominate the passenger vehicle market by 79%. Maruti Suzuki is the
largest car producer in India and has 52% share in passenger cars and is a complete monopoly in
multi purpose vehicles. In utility vehicles Mahindra holds 42% share. Hyundai and Tata Motors
is the second and third car producer in India.
Ransom E. Olds.
The large-scale, production-line manufacturing of affordable automobiles was debuted by
Ransom Olds at his Oldsmobile factory in 1902. This assembly line concept was then greatly
expanded by Henry Ford in the 1910s. Development of automotive technology was rapid, due in
part to the hundreds of small manufacturers competing to gain the world's attention. Key
developments included electric ignition and the electric self-starter (both by Charles Kettering,
for the Cadillac Motor Company in 1910-1911), independent suspension, and four-wheel brakes.
Although various piston less rotary engine designs have attempted to compete with the
conventional piston and crankshaft design, only Mazda's version of the Wankel engine has had
more than very limited success.
Since the 1920s, nearly all cars have been mass-produced to meet market needs, so marketing
plans have often heavily influenced automobile design. It was Alfred P. Sloan who established
the idea of different makes of cars produced by one company, so buyers could "move up" as their
fortunes improved. The makes shared parts with one another so larger production volume
resulted in lower costs for each price range. For example, in the 1950s, Chevrolet shared hood,
doors, roof, and windows with Pontiac; the LaSalle of the 1930s, sold by Cadillac, used cheaper
mechanical parts made by the Oldsmobile division.

Competitors details :

So many inferences to be drawn from these stats that if I put something, someone would howl as
to why I have missed something else. Still, some very quick observations:
1.Distinct slowdown in 2007-08 (FY2008).
2. Marutis share has remained the most consistent across 2003-08: 46-47%. Over the same
period, Hyundai down marginally, and so is Tata.
3. Pt.2 needs to be combined with the fact that growth during last 5 years has been higher in
bigger segment (cars and MUVs). That means +for Honda and Toyota; and growth limitation on
Maruti, Hyundai, and Tata.
4. That still leaves a lot of room for these 3: the Indian market will still retain a small car one
(with a gradual shift upwards). The small, compact, and Omni share of total domestic sales has
remained at around 65% for last few years.
5. The bigger segment is growing fast but still very low % of total. That should change in the
next decade.
6. Hyundai has dominated exports. That is a +for the country. On the other hand, no one has
found success in exporting bigger cars. They may export to fellow LDCs (Bangladesh, etc) but
not to competitive markets of US, Europe, and Japan. Could that change soon? Not soon, though
people are trying. As of now, only M&M and Tata have some plans, but those involve a radical
quality improvement, which will not happen tomorrow (liability laws have made them very
cautious). Toyota and Honda have the products, but then they also have factories worldwide.
Possibly India could be used as a regional hub. Suzuki exports small cars, and its big cars do not
sell much anywhere.
7. High growth for One month or quarter or even a year do not make a successful company, as
Fiat and GM have found it (have data prior to 2002 also). Even the 3-year growth can be
misleading (when read in isolation). Refer only Skoda. It was anyway growing at a good rate but
selling around 1000 prior to Fabia. Now it sells 1900-2000. That means a 100% growth.
Similarly for Logan/M&M; Spark/GM.
8. Most important for survival (as any business would be aware) is profits. No profits and selling
at a loss soon leads to extinction. The really good profitable years were till FY2007. From 2003-
07, although steel, aluminium, plastics prices all increased; higher volumes enabled healthy
growth in profits and returns. That has changed in 2007-08 with higher costs continuing, but
volume growth slowing down. For comparison, I am posting the operating margin and return on
networth for major companies which have publicly available financial results for FY2007 (first
figure is margin and second is return):
Maruti: 13.5%, 25.4%; margins increasing FY2004-07
Tata: 10.5%, 30.9%; stable margins
HM: operating losses from 2003-04 onwards
Hyundai: 8.3%, 20.4%; declining margins from 2001-02 onwards, though margins have been
stable during 2005-07.
Honda: 11.2%, 30.8%, stable margins
M&M: 8%, 33.3%; stable margins.
Four Wheeler
As in the two-wheeler segment, manufacturer related aspects are critical "Motivators"
where performance is below average. Segment leader, Honda Siel has scored above
average in 'Concern for dealer profitability'. This clearly brings out the importance of
these attributes with respect to the overall satisfaction.
The impact of 'Effectiveness of brand/product positioning' on commitment is relatively
lower among 4-wheeler dealers. 4-wheeler manufacturers are also delivering as per their
dealer expectations on this aspect.
'Fair settlement of warranty claims' & 'Communication to dealer in case of delay', which
were hygiene areas for 2-wheeler dealers have moved to the motivator segment for 4-
wheeler dealers.
'Sales & service training support' has a greater impact on commitment among 4-wheeler
dealers as compared, to 2-wheeler dealers.
A well developed transport network indicates a well developed economy. For rapid development
a well-developed and well-knit transportation system is essential. As India's transport network is
developing at a fast pace, Indian Automobile Industry is growing too. Also, the Automobile
industry has strong backward and forward linkages and hence provides employment to a large
section of the population. Thus the role of Automobile Industry cannot be overlooked in Indian
Economy. All kinds of vehicles are produced by the Automobile Industry. The automobile
industry in Indiathe tenth largest in the world with an annual production of approximately 2
million unitsis expected to become one of the major global automotive industries in the
coming years. A number of domestic companies produce automobiles in India and the growing
presence of multinational investment, too, has led to an increase in overall growth. Following the
economic reforms of 1991 the Indian automotive industry has demonstrated sustained growth as
a result of increased competitiveness and relaxed restrictions. India Automobile Industry
includes the manufacture of trucks, buses, passenger cars, defence vehicles, two wheelers, etc.
The industry can be broadly divided into the Car manufacturing, two-wheeler manufacturing and
heavy vehicle manufacturing units. The major Car manufacturers are,
1. Hindustan Motors
2. Maruti Udyog,
3. Fiat India Private Ltd
4. Ford India Ltd
5. General Motors India Pvt. Ltd
6. Honda Siel Cars India Ltd
7. Hyundai Motors India Ltd
8. Skoda India Private Ltd
9. Toyota Kirloskar Motor Ltd

The two-wheeler manufacturing is dominated by companies like TVS, Honda Motorcycle &
Scooter India (Pvt.) Ltd., Hero Honda, Yamaha, Bajaj, etc. The heavy motors like buses, trucks,
defense vehicles, auto rickshaws and other multi-utility vehicles are manufactured by Tata-
Telco, Ashok Leyland, Eicher Motors, Bajaj, Mahindra and Mahindra,etc. Following Indias
growing openness, the arrival of new and existing models, easy availability of finance at
relatively low rate of interest and price discounts offered by the dealers and manufacturers all
have stirred the demand for vehicles and a strong growth of the Indian automobile industry.
Small Car Market in India
The small car market in India is increasing by leaps and bounds. The indigenous market for
small cars now occupies a substantial share of around 70% of the annual car production in India
of about one million. The main players in the car market like Tata Motors and Maruti Udyog are
fiercely competitive and more or less all the automobile companies in India that have forayed
into the production of small cars are trying to out-do each other in terms of design, innovation,
pricing, and technology, in order to gain control of the small car market in India. The biggest
players in the Indian small car market are engaging in a healthy competition, which has
intensified since the Indian government decided to boost the small car sector. In this regard, a
reduction in the excise duties has been thought of. Even the engine capacities are expected to be
raised to 1500cc. The new small cars in India cars may even be fueled by gasoline and diesel in
the future. With all these facilities, it has been estimated that the indigenous car market is going
to move beyond the 3.5 million mark very soon.