Maruti Suzuki- Competitive Analysis

Maruti gains a whopping 22,000 sales year over year. It has actually increased its
market share to 47% of the passenger car market.

The Swift & Dzire continue their menacing hold over the market, and their sales
are within an arm length of the far cheaper Alto.

The old faithful Wagon R closes the month with nearly 14,000 sales, while the
petrol only Omni & Eco bring in a combined 12,000 (better yea over year demand
from commercial operators).

On the other hand, the Ertiga has its lowest sales since Sept '13; it's because of
the upcoming facelift (production shift over and customers waiting for the newer
version).

7 months since launch and the Ciaz is doing rather well for itself. This is Maruti's
first big sedan to taste success; It's holding on to the no. 2 spot in the C2
segment.

Other than the AMT, the Celerio has nothing to make it stand out from the crowd.
It's a conservative neither here nor there car. Keeping that in mind, 5,300 sales is
respectable. The Celerio diesel begins its dispatches this month.

The Alto AMT doesn't appear to have affected its sales too much. a majority of
that growth has NOT come from the Alto which hasn't been able to sustain the
mid20 thousand levels (again, an indicator of poor rural sentiment).

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Manufact
urer
Maruti
Maruti
Maruti
Maruti
hyundai
hyundai
mahindra
Honda
maruti
hyundai
maruti
maruti
Toyota
mahindra
hyundai
maruti
maruti
hyundai
Honda

Model
Alto
Swift
Dzire
wagon R
elite i20
i10 grand
bolero
City
Omni
Eon
Eeco
celerio
innova
scorpio
xcent
Ciaz
ertiga
i10
amaze

Sales
2014-15
21531
18444
18316
13872
12425
8792
8729
8203
6552
6243
5517
5309
5285
4730
4666
4662
4181
3219
2862

%change
28.4
16.2
14.4
49.5
259.2
-8.5
-2.4
16.6
31.9
-4
64.5
-8.5
47.2
15.6
-30
0
-13.9
24.2
-14.7

Maruti Suzuki- Competitive Analysis

Manufact
urer
Maruti
Hyundai
Honda
Mahindra
Toyota
Tata
Volkswag
en
Chevrolet

%market
share
47.02
18.02
8.08
5.9
5.75
4.78
1.67
1.6

As such Auto mobile sector in India is immensely

competitive.
On top of it, whenever such an incident takes place,
competitors try to make most of it. In the wake of
Manesar incident, rivalry from existing competition
increased by couple of notches. Maruti not only lost
financially, but also lost market share to other
competitors.- Due to Manesar incident Maruti suffered
following losses:
it was estimated that 26,000-30,000 would-be
customers would have opted for another brands.
Hyundai, Toyota and Ford who were major competitors
of Maruti in Diesel segment at that time pushed their
sales aggressively. In fact Hyundai, shot off letters to its
dealers to push sales of i20 and the sedan Verna.
Telecalls and SMSes were used to push sales. They also
offered higher incentives to agents selling both i20 and
Verna. Toyota offered free accessories worth Rs 10,000
on diesel variants of Liva and Etios. Ford began offering
Rs 3,000 discount on Figo, Swift's nearest rival .
During 2012, Maruti was facing troubles at all fronts. It all began in 201011 when volatility hit the global currency markets. Maruti used to import

Maruti Suzuki- Competitive Analysis

raw materials from Japan. The Japanese yen appreciated sharply against
the U.S. dollar, as did the rupee. This extreme volatility in foreign
exchange rates severely affected its margins. On top of it, there was a
clear shift in demand away from Marutis core market i.e. petrol based
cars. All this left the company reeling under severe sales and margin
pressure. Its market share in 2011-12 fell to an all-time low of 38.3%,
operating profit margins to 7.2% and net profit margin to 4.7%. Maruti was
also caught on the wrong foot by the shift towards a preference for diesel
cars in India. Diesel cars became more attractive, but manufacturing them
was not Marutis forte. Only 17% of its cars until then had diesel engines.
To complicate matters, parent Suzuki was not a diesel player either.
Between 2011 and 2013 the gas-diesel ratio of cars sold in India changed
from 64-to-36 to 42-to-58. While competitors such as Hyundai, Tata Motors
and Ford sold diesel cars at a premium, Maruti struggled to sell its Gas
based models.

IMPACT OF MANESAR:

Indias largest car maker Maruti Suzuki India (MSI) on

Tuesday reported a 5.41 per cent drop in net profit at
Rs. 227.45 crore, for the quarter ended September 30,
largely because production disruptions at the
companys Manesar facility directly hampered diesel car
sales The production loss mounted to about Rs. 210
crore. The plant rolled out about 1,600 units per day. In
terms of value, the per day loss was about Rs. 70 crore.
This year, MSIL has seen its Manesar plant shutting for
59 days first time in June, then in September and now
in October. MSIL has lost production of almost 75,000
units due to the strike while its manufacturing of its
popular K-series engine was also affected. The strike for
MSIL, which has been seeing long waiting period for its
popular vehicles, at a time when the festival season
sales were picking up, came as a big setback. While

Maruti Suzuki- Competitive Analysis

MSIL suffered a loss of Rs.2,200 crore, including around
Rs.700 crore hit that its vendors took, the government
also saw huge loss in its earnings. But more than the
monetary loss, it is reputation of Haryana, particularly
the Gurgaon belt, as an investment destination has
taken a severe hit. As a result, the strike could force
MSIL to think over the proposed Gujarat plant catering
to domestic demand as well, while the initial idea was to
keep it exclusively for exports as the carmaker has
already invested in developing infrastructure at the
Mundra port in the State. (Source: The Economic
Times,12 Oct, 2011)
Impact on competitors :

Maruti Suzuki's tryst with strikes in the past

three months have had a negative impact on India's leading carmaker. This has
also helped Maruti's biggest competitor Hyundai to increase sales. Bookings at
Maruti started to fall after the strike began at Manesar. The strike has helped
Hyundai post an increase in bookings for the recently launched Eon small car.
Hyundai has launched the Eon, a competitor of the Alto and has already reported
more than 5,000 bookings. The Eon though slightly more expensive than the Alto
offers more features and has a futuristic design. Further, the Eon happens to a be
a sibling of the i10, a small car that has impressed every one. A small car from
Hyundai was always welcome and its arrival now has bolstered the Korean
carmaker's image. Due to the strike the people are apprehensive about long
waiting periods. The new Swift's waiting period is now over nine months and
Maruti's other models might also see a similar situation. Hyundai, India's second
best carmaker in terms of sales is now upping its ante against Maruti Suzuki. It is
planning to increase its production capacity by another 40,000 units by end of
next year. This will help it decrease its waiting periods. People will prefer to get
themselves a car that will reach them faster than preferring to wait for a Maruti
Suzuki. Hence Hyundai is in a better position to capture a higher market share.
Tata Motors, for instance, has ramped up production of the diesel variants of its
Indica and indigo from 14,000 units to 20,000 units per month. Similarly, GM has
ramped up production of its diesel beat to 4,500-5,000 units per month.
Volkswagen has increased production of its Polo and Vento diesel to 10,000 units
per month from the usual 5,000 units a month.(Source : CNBC-TV18, Wed, Oct
19, 2011)