Description
It describes the Industry Trends of automobile industry, PEST Analysis of automobile Industry, Competitor Analysis, SWOT analysis, Company Description, General Information about Maruti Udyog limited, it's Finance performance, SWOT analysis of Maruti udyog limited and Various Strategies employed.
Comprehensive Company Analysis of Maruti Udyog Limited (MUL)
Maruti Udyog Limited (now Maruti Suzuki India Limited) is the leading manufacturer of economy cars in India. The target sector of Maruti Udyog has been low budget economical cars aimed at middle class consumers in India. Before getting into the analysis of Maruti Udyog itself, let’s have a peek into the Automobile sector in India, which Maruti deals with. Industry Analysis: Automobile Sector: Industry trends: Indian and Global perspectives, recent happenings: The automotive industry in India is one of the largest in the world and one of the fastest growing globally. India's passenger car and commercial vehicle manufacturing industry is the sixth largest in the world, with an annual production of more than 4.7 million units as of 2010. As of 2010, India is home to 40 million passenger vehicles. More than 3.7 million automotive vehicles were produced in India in 2010 (an increase of 33.9%), making the country the second fastest growing automobile market in the world. According to the Society of Indian Automobile Manufacturers, annual vehicle sales are projected to increase to 5 million by 2015. (source: en.wikipedia.org/wiki/Automotive_industry_in_India#Automobile_exports) The demand determinants of the automobile industry are ? ? ? ? ? ? Affordability Product innovation Infrastructure Price of fuel Brand name Demographics of the consumers
The basis of competition in the sector is high and increasing, and the current life cycle stage of automobile sector is growth cycle. With a rapidly growing Indian middle class, all the advantages of this sector in India are yet to be leveraged. The Indian passenger car market is far from being saturated leaving ample opportunity for volume growth since the per capita car penetration per 1000 is only 7 as compared to 500 in Germany. The production of cars in the country has been growing at a mammoth 27.58% per annum from 2002- 03 onwards As far as the international demand is concerned, India's automobile exports have grown consistently and reached $4.5 billion in 2009, with United Kingdom being India's largest export market followed by Italy, Germany, Netherlands and South Africa. India's automobile exports are expected to cross $12 billion by 2014.
According to New York Times, India's strong engineering base and expertise in the manufacturing of low-cost, fuel-efficient cars has resulted in the expansion of manufacturing facilities of several automobile companies like Hyundai Motors, Nissan, Toyota, Volkswagen and Suzuki. With a poor performance of the domestic as well as the global economy in FY-12, the automobile sector has also been a victim of the economic downturn. However, many rating agencies have still shown faith in the automobile sector. In January 2012, the ratings agency Fitch assigned a stable outlook for the Indian automobile industry and predicted that passenger vehicles volumes are expected to grow by 3-5% during the year, with car sales increasing by up to 4%. According to the 'Outlook 2012: India Auto' report of Fitch, the sales volumes of cars will be driven by growth in sales of diesel cars attributed to the pent up demand from 2011 which saw sales curtailed due to demand supply mismatches. PEST Analysis of Automobile sector: Political: ? ? ? ? ? ? ? ? ? In 2002, the Indian government formulated an auto policy that aimed at promoting integrated, phased, enduring and self-sustained growth of the Indian automotive industry. Automobile sector allows automatic approval for foreign equity investment up to 100% in the automotive sector and does not lay down any minimum investment criteria. Formulation of an appropriate auto fuel policy to ensure availability of adequate amount of appropriate fuel to meet emission norms. Confirms the government’s intention on harmonizing the regulatory standards with the rest of the world. Indian government auto policy aimed at promoting an integrated, phased and conductive growth of the Indian automobile industry. Establish an international hub for manufacturing small, affordable passenger cars as well as tractor and two wheelers. Ensure a balanced transition to open trade at minimal risk to the Indian economy and local industry. Assist development of vehicle propelled by alternate energy source. Lying emphasis on R&D activities carried out by companies in India by giving a weighted tax deduction of up to 150% for in house research and R&D activities.
? ?
Plan to have a terminal life policy for Consumer Vehicles along with incentives for replacement for such vehicles. Promoting multi-model transportation and the implementation of mass rapid transport system.
Economic: ? As compared to the 7 – 8% growth in our GDP, the automobile sector has grown at 8-10 % per annum in the last few years. Thus, the automobile sector has been marginally outperforming the economy. Still, there are economic pressures on the automobile industry because of the decline in the global economy, which are causing automobile companies to reorganize the traditional sales process. From the govt., there has been a weighted tax deduction of up to 150% for in-house research and R & D activities. Govt. has granted concessions, such as reduced interest rates for export financing in automobile sector. More than 90% of the Consumer Vehicles (CVs) purchase is on credit. Finance availability to CV buyers has grown in scope during the last few years. The increased enforcement of overloading restrictions has also contributed to an increase in the number of CVs running on Indian roads. Several Indian firms have partnered with global players, thus revolutionizing the automobile industry. While some have formed joint ventures with equity participation, others have also entered into technology tie-ups. Establishment of India as a manufacturing hub, for mini, compact cars, OEMs and for auto components.
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? ? ? ? ? ? ? ?
Social: ? India’s standard of living has increased manifolds in the past few decades and hence cars have now become affordable for a majority of the middle class, which are new entrants in the consumers.
? ? ? ? ? ?
There has been a remarkable growth in urbanization in India. We are 4th largest economy by Purchasing Power Parity (PPP) index. 85% of cars are financed in India. Hence, financially weaker sections can also become potential buyers of automobiles, thus giving the automobile sector a huge market. Economy cars account for nearly 80% of the Indian four wheeler market. Indian customers are highly discerning, educated and well informed. They are price sensitive and put a lot of emphasis on value for money. Indians have preference for small and compact cars. They are socially acceptable even amongst the well off. Preference for fuel efficient cars with low running costs.
Technological: ? ? ? ? ? ? ? ? ? More and more emphasis is being laid on R & D activities carried out by companies in India. The Government of India is promoting National Automotive Testing and R&D Infrastructure Project (NATRIP) to support the growth of the auto industry in India Technological solutions helps in integrating the supply chain, hence reduce losses and increase profitability. Customized solutions (designer cars, etc) can be provided with the proliferation of technology. Internet makes it easy to collect and analyze customer feedback. With the entry of global companies into the Indian market, advanced technologies, both in product and production process have developed. With the development or evolution of alternate fuels, hybrid cars have made entry into the market. Major global players like Audi, BMW, Hyundai etc have setup their manufacturing units in India.
Competitor Analysis: Analyze pricing, quality, distribution and partnerships of the nearest competitor of the company
The Indian automotive component industry is dominated by around 500 players which account for more than 85% of the production. Since majority of India’s automobile consumers are middle class population, the main criterion distinguishing a four wheeler from the other is the cost. The value for money cars are in high demand in India. Maruti also targets this section of consumers and hence the top competitors of Maruti with regards to value for money cars are Tata Motors, Hyundai and Chevrolet.
Tata Motors 1.5L to 5L+ Decent Wide distribution network Hyundai 2.5L to 5L+ Good Wide distribution network Chevrolet 3L to 5L+ Good Wide distribution network
Pricing Quality Distribution
TATA Motors is a tough competitor for the cars manufactured by Maruti. The recent launch of Tata Nano has been a success for Tata motors. As Nano also targets the lower middle class people, who are the biggest consumers of Maruti as well, Tata stands as a big competitor of Maruti.
SWOT Analysis: Strengths, weakness, opportunities and threats faced by the industry Strengths: ? ? ? ? ? ? ? Large domestic market Competitive auto component vendor base Government incentives for manufacturing plants Strong engineering skills available Improvement in the standard of living of people in India in the past few decades. Easy availability of loans for buying automobiles Demographics of Indian population.
Weaknesses: ? ? ? ? ? Poor infrastructure Low labour productivity High taxes imposed on automobile companies Low investment in R & D High cost of borrowing and high overheads make the production uncompetitive
Opportunities: ? ? ? Increase in per capita income level Cut in excise duties Rising rural demand
Threats: ? ? ? Rising fuel prices (Petrol cars are now in lesser demand) Rising interest rates Cut throat competition because of 100% FDI.
Company Analysis:
Company description (a brief introduction regarding what businesses the company is into): Maruti Udyog Limited (now Maruti Suzuki India Limited) is the leading manufacturer of economy cars in India. The major business of MUL is in low cost, fuel efficient four wheeler automobile sector. Maruti Udyog Limited (MUL) was established in Feb 1981 through an Act of Parliament, to meet the growing demand of a personal mode of transport caused by the lack of an efficient public transport system. Maruti has been the market leader in the car segment, both in terms of volume of vehicles sold and revenue earned. Maruti was introduced targeting the middle class in India. However, today it manufactures cars in a variety of price ranges. The Company offers 15 brands and over 150 variants of cars ranging from people's car Maruti 800 to the latest Life Utility Vehicle, Ertiga. The portfolio includes Maruti 800, Alto, Alto K10, A-star, Estilo, WagonR, Ritz, Swift, Swift DZire, SX4, Omni, Eeco, Kizashi, Grand Vitara, Gypsy and Ertiga. In an environment friendly initiative, in August 2010 Maruti Suzuki introduced factory fitted CNG option on 5 models across vehicle segments. These include Eeco, Alto, Estilo, Wagon R and Sx4. With this Maruti Suzuki became the first company in India to introduce factory fitted CNG vehicles. The following pyramid shows the products of Maruti classified according to their price range.
General information about the company: location of the headquarters, year of founding, shareholding pattern, number of employees, top management, etc. Maruti Suzuki India Limited (MSIL, formerly known as Maruti Udyog Limited) is a subsidiary of Suzuki Motor Corporation, Japan. Maruti Suzuki has been the leader of the Indian car market for over two and a half decades. The company's headquarters are located in New Delhi. The company has two manufacturing facilities located at Gurgaon and Manesar, south of New Delhi, India. Both the facilities have a combined capability to produce over a 1.5 million (1,500,000) vehicles annually. The company plans to expand its manufacturing capacity to 1.75 million by 2013. 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. Maruti is the only Indian Automobile Company to have crossed the 10 million sales mark since its inception. In 2011-12, the company sold over 1.13 million vehicles including 1,27,379 units of exports. The Company employs over 9000 people (as on 31st March, 2012). Maruti Suzuki's sales and service network is the largest among car manufacturers in India. The Company has been rated first in customer satisfaction in the JD Power survey for 12 consecutive years. Besides serving the Indian market, Maruti Suzuki also exports cars to several countries in Europe, Asia, Latin America, Africa and Oceania. Prior to 2007, 18.28% stakes of the company was owned by the government of India and 54.2% by Suzuki Motors of Japan. In September 2007, Government of India sold its stakes to the public. The share held by Suzuki motors is the same even today.
Maruti Suzuki is currently headed by Mr. R. C. Bhargava (Chairman) and Mr. Shinzo Nakanishi (Managing Director & CEO).
Financial performance of the company: Sales, net profit, segment wise performance of the past 1 year: The total revenue of the company for the past six financial years has been summarized in the below table: Maruti Suzuki's revenue over the years: Year Net Sales 2006-07 2007-08 2008-09 1,45,922 1,78,603 2,03,583 (Rs. in Million) Year 2009-10 2010-11 2011-12
Net Sales 3,01,198 3,75,224 3,47,059
The following bar graph shows that the net sales of the company has been growing continuously for the past 5 years.
The company’s performance in terms of revenue in 2010-11 is as shown below: Gross total income Profit before tax Tax expense 375,224 31,088 8,202
Profit after tax Balance brought forward
22,886 100,499
To highlight the main points of the financial report of 2010-11; ? ? ? ? The gross revenue (net of excise) of the Company was 375,224 million as against 301,232 million in the previous year showing a growth of 24.6 per cent. Sale of vehicles in the domestic market increased to 1,132,739 units as compared to 870,790 units in the previous year showing a growth of 30.1 per cent. Total number of vehicles exported was 138,266 as compared to 147,575 last year. Earnings before interest, depreciation, tax and amortization (EBIDTA) was ` 41,467 million against ` 44,510 million in the previous year.
Maruti at a glance in 2010-11: ? ? ? ? ? ? ? ? ? Mile stone Year - Roll-out of 10 millionth vehicle 4 out of Top-5 selling cars in India (4/5) - Alto, WagonR, Swift, Dzire MARKET SHARE - increased by 30bps to 44.9% In the passenger vehicle segment No.1 in Customer Satisfaction - For 11 consecutive years in JD Power CSI Survey (at the service level) No.1 in Sale s Satisfaction - In JD Power SSI Survey (at the dealer sales level) Total Sales - Highest ever sales: 1,271,005 with a growth of 24.8% Income - Highest ever total income: Rs. 375,224 million with a growth of 24.6% Net Profit - Rs. 22,886 million, declined by 8.4% Network - Sales Outlets: 933, Cities: 668 Service Outlets: 2,946, Cities: 1,395.
? Capacity Expansion - Additional capacity of 500,000 units p.a.at Manesar by 2012-13 (source http://marutistorage.blob.core.windows.net/marutisuzukipdf/AR-10-11.pdf)
SWOT Analysis of Maruti Udyog: Strengths: 1. 2. 3. 4. Widespread distribution, sales and services network. Brand image Understanding of Indian market and a typical Indian consumer. Coverage over the entire section of consumers ranging from economical cars to high end sedans. 5. Ability to design products with differentiating features, and continuous transformation of one product to another in order to attract the contemporary consumer.
6. Experience and knowhow of the technology. Weaknesses: 1. Lack of experience in the foreign markets. 2. Consumers resistant to high end models. 3. Heavy import duties on the fully built imported models. Opportunities: 1. 2. 3. 4. Increased purchasing power of middle class in India. Government subsidies for the economical models. Tax benefits. Prospective buyers from the two wheeler segment.
Threats: 1. Competition from second hand cars and the newly launched TATA Nano. 2. Threats from Chinese manufacturers.
doc_519344122.docx
It describes the Industry Trends of automobile industry, PEST Analysis of automobile Industry, Competitor Analysis, SWOT analysis, Company Description, General Information about Maruti Udyog limited, it's Finance performance, SWOT analysis of Maruti udyog limited and Various Strategies employed.
Comprehensive Company Analysis of Maruti Udyog Limited (MUL)
Maruti Udyog Limited (now Maruti Suzuki India Limited) is the leading manufacturer of economy cars in India. The target sector of Maruti Udyog has been low budget economical cars aimed at middle class consumers in India. Before getting into the analysis of Maruti Udyog itself, let’s have a peek into the Automobile sector in India, which Maruti deals with. Industry Analysis: Automobile Sector: Industry trends: Indian and Global perspectives, recent happenings: The automotive industry in India is one of the largest in the world and one of the fastest growing globally. India's passenger car and commercial vehicle manufacturing industry is the sixth largest in the world, with an annual production of more than 4.7 million units as of 2010. As of 2010, India is home to 40 million passenger vehicles. More than 3.7 million automotive vehicles were produced in India in 2010 (an increase of 33.9%), making the country the second fastest growing automobile market in the world. According to the Society of Indian Automobile Manufacturers, annual vehicle sales are projected to increase to 5 million by 2015. (source: en.wikipedia.org/wiki/Automotive_industry_in_India#Automobile_exports) The demand determinants of the automobile industry are ? ? ? ? ? ? Affordability Product innovation Infrastructure Price of fuel Brand name Demographics of the consumers
The basis of competition in the sector is high and increasing, and the current life cycle stage of automobile sector is growth cycle. With a rapidly growing Indian middle class, all the advantages of this sector in India are yet to be leveraged. The Indian passenger car market is far from being saturated leaving ample opportunity for volume growth since the per capita car penetration per 1000 is only 7 as compared to 500 in Germany. The production of cars in the country has been growing at a mammoth 27.58% per annum from 2002- 03 onwards As far as the international demand is concerned, India's automobile exports have grown consistently and reached $4.5 billion in 2009, with United Kingdom being India's largest export market followed by Italy, Germany, Netherlands and South Africa. India's automobile exports are expected to cross $12 billion by 2014.
According to New York Times, India's strong engineering base and expertise in the manufacturing of low-cost, fuel-efficient cars has resulted in the expansion of manufacturing facilities of several automobile companies like Hyundai Motors, Nissan, Toyota, Volkswagen and Suzuki. With a poor performance of the domestic as well as the global economy in FY-12, the automobile sector has also been a victim of the economic downturn. However, many rating agencies have still shown faith in the automobile sector. In January 2012, the ratings agency Fitch assigned a stable outlook for the Indian automobile industry and predicted that passenger vehicles volumes are expected to grow by 3-5% during the year, with car sales increasing by up to 4%. According to the 'Outlook 2012: India Auto' report of Fitch, the sales volumes of cars will be driven by growth in sales of diesel cars attributed to the pent up demand from 2011 which saw sales curtailed due to demand supply mismatches. PEST Analysis of Automobile sector: Political: ? ? ? ? ? ? ? ? ? In 2002, the Indian government formulated an auto policy that aimed at promoting integrated, phased, enduring and self-sustained growth of the Indian automotive industry. Automobile sector allows automatic approval for foreign equity investment up to 100% in the automotive sector and does not lay down any minimum investment criteria. Formulation of an appropriate auto fuel policy to ensure availability of adequate amount of appropriate fuel to meet emission norms. Confirms the government’s intention on harmonizing the regulatory standards with the rest of the world. Indian government auto policy aimed at promoting an integrated, phased and conductive growth of the Indian automobile industry. Establish an international hub for manufacturing small, affordable passenger cars as well as tractor and two wheelers. Ensure a balanced transition to open trade at minimal risk to the Indian economy and local industry. Assist development of vehicle propelled by alternate energy source. Lying emphasis on R&D activities carried out by companies in India by giving a weighted tax deduction of up to 150% for in house research and R&D activities.
? ?
Plan to have a terminal life policy for Consumer Vehicles along with incentives for replacement for such vehicles. Promoting multi-model transportation and the implementation of mass rapid transport system.
Economic: ? As compared to the 7 – 8% growth in our GDP, the automobile sector has grown at 8-10 % per annum in the last few years. Thus, the automobile sector has been marginally outperforming the economy. Still, there are economic pressures on the automobile industry because of the decline in the global economy, which are causing automobile companies to reorganize the traditional sales process. From the govt., there has been a weighted tax deduction of up to 150% for in-house research and R & D activities. Govt. has granted concessions, such as reduced interest rates for export financing in automobile sector. More than 90% of the Consumer Vehicles (CVs) purchase is on credit. Finance availability to CV buyers has grown in scope during the last few years. The increased enforcement of overloading restrictions has also contributed to an increase in the number of CVs running on Indian roads. Several Indian firms have partnered with global players, thus revolutionizing the automobile industry. While some have formed joint ventures with equity participation, others have also entered into technology tie-ups. Establishment of India as a manufacturing hub, for mini, compact cars, OEMs and for auto components.
?
? ? ? ? ? ? ? ?
Social: ? India’s standard of living has increased manifolds in the past few decades and hence cars have now become affordable for a majority of the middle class, which are new entrants in the consumers.
? ? ? ? ? ?
There has been a remarkable growth in urbanization in India. We are 4th largest economy by Purchasing Power Parity (PPP) index. 85% of cars are financed in India. Hence, financially weaker sections can also become potential buyers of automobiles, thus giving the automobile sector a huge market. Economy cars account for nearly 80% of the Indian four wheeler market. Indian customers are highly discerning, educated and well informed. They are price sensitive and put a lot of emphasis on value for money. Indians have preference for small and compact cars. They are socially acceptable even amongst the well off. Preference for fuel efficient cars with low running costs.
Technological: ? ? ? ? ? ? ? ? ? More and more emphasis is being laid on R & D activities carried out by companies in India. The Government of India is promoting National Automotive Testing and R&D Infrastructure Project (NATRIP) to support the growth of the auto industry in India Technological solutions helps in integrating the supply chain, hence reduce losses and increase profitability. Customized solutions (designer cars, etc) can be provided with the proliferation of technology. Internet makes it easy to collect and analyze customer feedback. With the entry of global companies into the Indian market, advanced technologies, both in product and production process have developed. With the development or evolution of alternate fuels, hybrid cars have made entry into the market. Major global players like Audi, BMW, Hyundai etc have setup their manufacturing units in India.
Competitor Analysis: Analyze pricing, quality, distribution and partnerships of the nearest competitor of the company
The Indian automotive component industry is dominated by around 500 players which account for more than 85% of the production. Since majority of India’s automobile consumers are middle class population, the main criterion distinguishing a four wheeler from the other is the cost. The value for money cars are in high demand in India. Maruti also targets this section of consumers and hence the top competitors of Maruti with regards to value for money cars are Tata Motors, Hyundai and Chevrolet.
Tata Motors 1.5L to 5L+ Decent Wide distribution network Hyundai 2.5L to 5L+ Good Wide distribution network Chevrolet 3L to 5L+ Good Wide distribution network
Pricing Quality Distribution
TATA Motors is a tough competitor for the cars manufactured by Maruti. The recent launch of Tata Nano has been a success for Tata motors. As Nano also targets the lower middle class people, who are the biggest consumers of Maruti as well, Tata stands as a big competitor of Maruti.
SWOT Analysis: Strengths, weakness, opportunities and threats faced by the industry Strengths: ? ? ? ? ? ? ? Large domestic market Competitive auto component vendor base Government incentives for manufacturing plants Strong engineering skills available Improvement in the standard of living of people in India in the past few decades. Easy availability of loans for buying automobiles Demographics of Indian population.
Weaknesses: ? ? ? ? ? Poor infrastructure Low labour productivity High taxes imposed on automobile companies Low investment in R & D High cost of borrowing and high overheads make the production uncompetitive
Opportunities: ? ? ? Increase in per capita income level Cut in excise duties Rising rural demand
Threats: ? ? ? Rising fuel prices (Petrol cars are now in lesser demand) Rising interest rates Cut throat competition because of 100% FDI.
Company Analysis:
Company description (a brief introduction regarding what businesses the company is into): Maruti Udyog Limited (now Maruti Suzuki India Limited) is the leading manufacturer of economy cars in India. The major business of MUL is in low cost, fuel efficient four wheeler automobile sector. Maruti Udyog Limited (MUL) was established in Feb 1981 through an Act of Parliament, to meet the growing demand of a personal mode of transport caused by the lack of an efficient public transport system. Maruti has been the market leader in the car segment, both in terms of volume of vehicles sold and revenue earned. Maruti was introduced targeting the middle class in India. However, today it manufactures cars in a variety of price ranges. The Company offers 15 brands and over 150 variants of cars ranging from people's car Maruti 800 to the latest Life Utility Vehicle, Ertiga. The portfolio includes Maruti 800, Alto, Alto K10, A-star, Estilo, WagonR, Ritz, Swift, Swift DZire, SX4, Omni, Eeco, Kizashi, Grand Vitara, Gypsy and Ertiga. In an environment friendly initiative, in August 2010 Maruti Suzuki introduced factory fitted CNG option on 5 models across vehicle segments. These include Eeco, Alto, Estilo, Wagon R and Sx4. With this Maruti Suzuki became the first company in India to introduce factory fitted CNG vehicles. The following pyramid shows the products of Maruti classified according to their price range.
General information about the company: location of the headquarters, year of founding, shareholding pattern, number of employees, top management, etc. Maruti Suzuki India Limited (MSIL, formerly known as Maruti Udyog Limited) is a subsidiary of Suzuki Motor Corporation, Japan. Maruti Suzuki has been the leader of the Indian car market for over two and a half decades. The company's headquarters are located in New Delhi. The company has two manufacturing facilities located at Gurgaon and Manesar, south of New Delhi, India. Both the facilities have a combined capability to produce over a 1.5 million (1,500,000) vehicles annually. The company plans to expand its manufacturing capacity to 1.75 million by 2013. 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. Maruti is the only Indian Automobile Company to have crossed the 10 million sales mark since its inception. In 2011-12, the company sold over 1.13 million vehicles including 1,27,379 units of exports. The Company employs over 9000 people (as on 31st March, 2012). Maruti Suzuki's sales and service network is the largest among car manufacturers in India. The Company has been rated first in customer satisfaction in the JD Power survey for 12 consecutive years. Besides serving the Indian market, Maruti Suzuki also exports cars to several countries in Europe, Asia, Latin America, Africa and Oceania. Prior to 2007, 18.28% stakes of the company was owned by the government of India and 54.2% by Suzuki Motors of Japan. In September 2007, Government of India sold its stakes to the public. The share held by Suzuki motors is the same even today.
Maruti Suzuki is currently headed by Mr. R. C. Bhargava (Chairman) and Mr. Shinzo Nakanishi (Managing Director & CEO).
Financial performance of the company: Sales, net profit, segment wise performance of the past 1 year: The total revenue of the company for the past six financial years has been summarized in the below table: Maruti Suzuki's revenue over the years: Year Net Sales 2006-07 2007-08 2008-09 1,45,922 1,78,603 2,03,583 (Rs. in Million) Year 2009-10 2010-11 2011-12
Net Sales 3,01,198 3,75,224 3,47,059
The following bar graph shows that the net sales of the company has been growing continuously for the past 5 years.
The company’s performance in terms of revenue in 2010-11 is as shown below: Gross total income Profit before tax Tax expense 375,224 31,088 8,202
Profit after tax Balance brought forward
22,886 100,499
To highlight the main points of the financial report of 2010-11; ? ? ? ? The gross revenue (net of excise) of the Company was 375,224 million as against 301,232 million in the previous year showing a growth of 24.6 per cent. Sale of vehicles in the domestic market increased to 1,132,739 units as compared to 870,790 units in the previous year showing a growth of 30.1 per cent. Total number of vehicles exported was 138,266 as compared to 147,575 last year. Earnings before interest, depreciation, tax and amortization (EBIDTA) was ` 41,467 million against ` 44,510 million in the previous year.
Maruti at a glance in 2010-11: ? ? ? ? ? ? ? ? ? Mile stone Year - Roll-out of 10 millionth vehicle 4 out of Top-5 selling cars in India (4/5) - Alto, WagonR, Swift, Dzire MARKET SHARE - increased by 30bps to 44.9% In the passenger vehicle segment No.1 in Customer Satisfaction - For 11 consecutive years in JD Power CSI Survey (at the service level) No.1 in Sale s Satisfaction - In JD Power SSI Survey (at the dealer sales level) Total Sales - Highest ever sales: 1,271,005 with a growth of 24.8% Income - Highest ever total income: Rs. 375,224 million with a growth of 24.6% Net Profit - Rs. 22,886 million, declined by 8.4% Network - Sales Outlets: 933, Cities: 668 Service Outlets: 2,946, Cities: 1,395.
? Capacity Expansion - Additional capacity of 500,000 units p.a.at Manesar by 2012-13 (source http://marutistorage.blob.core.windows.net/marutisuzukipdf/AR-10-11.pdf)
SWOT Analysis of Maruti Udyog: Strengths: 1. 2. 3. 4. Widespread distribution, sales and services network. Brand image Understanding of Indian market and a typical Indian consumer. Coverage over the entire section of consumers ranging from economical cars to high end sedans. 5. Ability to design products with differentiating features, and continuous transformation of one product to another in order to attract the contemporary consumer.
6. Experience and knowhow of the technology. Weaknesses: 1. Lack of experience in the foreign markets. 2. Consumers resistant to high end models. 3. Heavy import duties on the fully built imported models. Opportunities: 1. 2. 3. 4. Increased purchasing power of middle class in India. Government subsidies for the economical models. Tax benefits. Prospective buyers from the two wheeler segment.
Threats: 1. Competition from second hand cars and the newly launched TATA Nano. 2. Threats from Chinese manufacturers.
doc_519344122.docx