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Tag: Maruti

  • Why Maruti Suzuki is Not Planning to Launch Electric Vehicles in India Any Soon?

    The world is moving really fast. It was never in history that we had the luxury to learn about anything in the world from the comfort of our homes. The information that we deal with (on a daily basis) is immense. All of this just doesn’t come up out of the blue, it has a price that we pay every day. The price is some of the other natural resources or some non-replenishable resource. But now the world is witnessing the shift. The shift from non-sustainable methods of human activities to more sustainable methods.

    One of the pioneers of such a transition is EVs. It is an acronym for Electric Vehicles. It is forecasted that these cars (or vehicles) will be the future of not just public transport but will be the future of private transportation as well. With that being said, everyone is trying to get into the business of EVs. Every other car manufacturer is making their cars electric.

    In an immensely population-dense country, India, the sector is getting ready to launch. Top-notch companies are planning to disrupt this market with some innovation. Except for one carmaker, Maruti Suzuki. The largest carmaker in India will refrain from entering the electric vehicles market in India. This article talks about what are (and could) be the reasons for such waste of potential.

    Maruti Suzuki Plans about launching EV in the Indian Market
    Why is Maruti Suzuki Refraining from the EV Sector?
    When will Maruti Suzuki Enter the Indian EV Market?
    Current Situation of Maruti Suzuki
    FAQ

    Maruti Suzuki Plans about launching EV in the Indian Market

    First, let us give you some context. It has been reported that the country’s largest carmaker, Maruti Suzuki has plans that they will not enter the electric vehicles markets in the short term. This trend of refraining will continue till the market is feasible. Chairman R C Bhargava told shareholders at the company’s 40th annual general meeting.

    Yes, this news surfaced all over the internet. It shook not only the investors but people who had hopes for the company to launch EV. Adding to the news, RC Bhargava, the chairman, told the investors and shareholders that the carmaker has no plans to enter the EV market in the short term. They will only enter the market when the market will show some feasibility in the future. This was seen as the main highlight of the 40th annual general meeting that was held last year.

    Adding to the notion of not entering the EV Market, Bhargava said the government’s focus is on developing the two-wheelers with the primary goal of electrification.

    In the product segment of two-wheelers, Hero and Ola have been innovating. We all know that Hero is trying its best to enter the electric vehicle market and on the other hand it is developing infrastructure for charging electric vehicles.

    Ola, the ride-sharing and taxi service startup is also looking forward to an electric future, so much so that they recently launched their product called the “Ola Electric”. Ola electric is a two-wheeler that runs on electricity. Thus, apart from the product segments of the two-wheeler category, remains the passenger vehicle segment. This is the primary market of Maruti Suzuki and they are quite unaffected by the newborn electric vehicles in this segment.

    Bhargava added that they know that the sale volume is minimal and it is not in much of a magnitude. This easily predicts that folks at Maruti Suzuki are trying to play it safe rather than just jump on what is the hottest trend in the market right now.

    In the passenger vehicles segment, a few manufacturers have brought EVs, “but the sales volume is minimal, and it has had no impact on the market share of Maruti Suzuki,” Bhargava said.

    Annual EV Sales in India
    Annual EV Sales in India

    Another fact that is baffling the EV enthusiasts is that other vehicle makers like Tata Motors, Mahindra and Mahindra are already running fast in the EV race.

    Tata Nexon EV
    Tata Nexon EV

    They are so much into Electric vehicles that they have already manufactured a little over a dozen battery-powered vehicles. That trend in those carmakers can be seen among various product segments.

    They are even forecasted to be more active in the market in the short future. Up till 2025, they will lead the Indian Electric Vehicles market by much more than the then-newcomer in the EV market, Maruti Suzuki.

    Why is Maruti Suzuki Refraining from the EV Market?

    When asked why the country’s topmost car maker is refraining from the EV market they replied with a rather satisfactory answer. Bhargava mentioned that Maruti Suzuki is currently planning to focus on the Electric vehicle segment, without making a loss on its basic and natural operating cycle. This was what he replied when investors enquired about the Electric vehicle segment.

    In response to queries from several shareholders, Bhargava said Maruti Suzuki is looking at the electric vehicle (EV) segment without making a loss on operations.

    “Maruti Suzuki is the leader in the passenger vehicle industry, and it fully intends to have leadership in EVs. But to be sure, Maruti Suzuki’s focus in the short term is CNG and hybrid vehicles – until the time EVs reach a certain scale. On its part, the company’s sister arm – Suzuki – and Denso and Toshiba, have already started working on localization of lithium-ion cells and engaging with the vendor fraternity to have a deeper localization to deliver an EV “that is accessible and delivers enough scale to add to the bottom line.”  he added

    After the statements by Maruti’s Chairman, one thing is clear that Maruti Suzuki has hopes for electric vehicles, but it doesn’t want to just jump right into the trend. It is waiting for a little more stabilised market in the Electric vehicle market and until then, Maruti is cleansing the company to better fit the EV market in the future. It is not scared of the innovations but just doesn’t want to regret any early investments. After all, it is such a big organisation and also holds a lot of expectations.

    When will Maruti Suzuki Enter the Indian EV Market?

    Suzuki’s parent company had said an India special EV might be ready by 2025. Regarding issues related to climate change, zero-emission and carbon neutrality, India has to follow its own schedule and not be pressured by the timelines set by more developed nations in the world, the chairman asserted.

    “Yes, we must work with the rest of the world, we must be concerned about climate change, we must go on to reduce emissions. But we and the world have both to recognise the disparities in income and living styles and the disparity in the consumption of energy per capita in the developed world and India,” Bhargava answered.

    The company will be launching an all-new sports utility vehicle next year to expand its footprint in the fast-growing segment in the mainstream market. The development work on the vehicle is underway, which will be introduced shortly. “Once we have the SUV next year, we will have more market share in that area”, he added.

    It is clear from the above statements that the company clearly understands what the Indian user would want. It is true that the whole of India is not readily agreeing on shifting to electric vehicles and it will take some time. Until then Maruti plans to do more research and development on prospective investments.

    Current Situation of Maruti Suzuki

    If we look at the current situation in the product segment, we will find that Maruti Suzuki is the dominator of the vehicle segment. It has, in the local markets, very well accepted cars like that of Wagon R, Swift, Baleno, Vitara Brezza, Ertiga, XL6 and the S-cross. On the other hand, Hyundai (Korean rival) has made good growth in the SUV category.

    Top Best-Selling Cars of December 2021
    Top Best-Selling Cars of December 2021

    Separately, Bhargava said while Maruti Suzuki has faced some loss in production due to the shortage in availability of semiconductors, it is not of major concern. The current shortage of semiconductors facing the automobile industry is temporary, partly caused by the outbreak of the coronavirus pandemic and is expected to be over by 2022.

    “Meanwhile, there has been a bit of a hit on the production of vehicles, and we have had to adjust, but there is no major loss that we have to be concerned about,” Bhargava said.

    Bhargava has a thought process. That is, he thinks that India has to look after the citizens’ needs and wants. The only way to do that is to increase the lifestyle of individuals. They have to be better equipped with income to spend and live a decent life, this will create new demand for not just electric vehicles but everything else.

    Not only this, he believes that this will also help in catching up with the rest of the world. The electronic vehicle is a concept that was first released in the outer boundaries of the world where technology is developed. They also enjoy a slightly better lifestyle than most Indians. EVs have to be tailor-made for Indians.

    “It will require a much higher per capita energy consumption even if we adopt much more energy efficient means of consumption”. Bhargava pointed.

    Bhargava further said: “And to do that we cannot follow everything which the West does. We have to make our own schedules and programmes and ensure that we do not adopt rules and regulations, which results in the people of India not being able ever to come up to the point of levels which they need to come up with to reduce (the gap) with the rest of the world.”

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    Conclusion

    The above article points to the boundaries and the centre of the news piece that showed everyone. It is true that the homegrown vehicle maker Maruti Suzuki has hopes and aspirations for Electric scenes in India. But it surely does not want to do that in haste. Maruti has reported some slight losses due to manufacturing issues due to the unavailability of semiconductors. This however is not a big issue and they are getting better everyday. Maruti plans to be a little more stable in operations before they start investing in the Electric vehicle segment.

    The news smoke came even when rival companies like Tata Motors and Mahindra and Mahindra had lined up a lot in the Electric vehicle domain. It is forecasted that up until 2025 they will launch some dozen more EVs for citizens.

    To those queries, the officials have already answered the raised questions. Bhargava said Maruti Suzuki is looking at the electric vehicle (EV) segment without making a loss on operations. India is a special market for everything, not just in the segments of the electric vehicle.

    One who understands the markets and the needs of Indian customers are set to rule the market. Maruti over the years have done really well in the passenger vehicle segments, and this is good proof of their understanding of the Indian scenario.

    FAQ

    Is Maruti coming with electric cars?

    Yes, Maruti has plans to enter the Indian EV market in 2025.

    What is the price of the Maruti electric car?

    The Wagon R electric will be priced at 10 lakhs in India, which is slated to launch in 2025.

    Why is Maruti not making electric cars?

    Maruti Suzuki’s chairman, R C Bhargava stated in its annual general meeting that, They will only enter the market when the market will show some feasibility in the future.

  • Maruti Suzuki – History and Success in India [Case Study]

    The Indian automobile industry is one of the most competitive sectors in the economy. There are approximately 5000 car dealers in India wherein approximately around 11 – 12 cars are being sold every minute. Be it SUV or sedan, as the standard of living is rising in India, people feel like having a car is a necessity.

    In the past decade, the popularity of having cars has increased a lot. Due to the advancement in technology, cars have become affordable as well as eco-friendly. With the increasing needs of people in India, the competition in the automobile industry is beyond par. Even when there are many automobile companies in India who sell affordable, luxury all kinds of cars, there is one company that has always been on the top priority of people and that is Maruti Suzuki.

    Maruti Suzuki India Ltd has grown to be India’s largest passenger car company, which accounts for over 50% of the domestic car market. Maruti Suzuki is a subsidiary of Suzuki Motor Corporation, Japan, where the Japanese car company boasts of holding around 56.37% of stakes, according to the reports dated September 2020.

    The company offers a wide range of cars starting from entry-level cars to stylish hatchbacks and the most modern sedans including DZire, SX4, Grand Vitara, and more. It takes care of the business of the manufacturing, purchase, and sale of motor vehicles and their spare parts (automobiles). Furthermore, it is also engaged in the financing of cars and the facilitation of pre-owned car sales fleet management. The Maruti automobile company has 2 manufacturing plants in Gurgaon and Manesar in Haryana and 1 manufacturing complex in Gujarat. According to the recent announcement of the company in May 2021, the company is capable of manufacturing around 200 cars per day in total.

    In this Maruti Suzuki Case Study, you will know all about the History and Success of Maruti Suzuki in India.

    How Maruti Suzuki Started in India – History
    How Maruti Suzuki Became Successful
    FAQ

    Maruti Suzuki in India – History

    Maruti Suzuki was started back on February 24, 1981, to manufacture cars for middle-class Indians. The company was formed as a government company, incorporated as Maruti Udyog Ltd. with Suzuki as its minor partner. Maruti Udyog then signed the license and joint venture agreement with Suzuki Motor Corporation, Japan, on October 2, 1982, which began the start of the long-lasting and successful partnership.

    The company started its productions in 1983, which then came to be the choice of every Indian household. The first car it launched was Maruti 800. It was affordable back then and was thus incredibly popular. This model of Maruti is still considered to be a Maruti classic to date. Although the journey of Maruti Suzuki India Ltd. started off in a very different way.

    Maruti Suzuki – 1980

    In India, till the early 1980s, the government of India controlled the Indian automobile sector, and privatization did not enter yet. There were only two automobile companies – Premier Automobiles Ltd, which had their popular car, Premier Padmini, and Hindustan Motors Ltd, which made the Ambassador cars. Maruti Udyog Ltd. entered this era with Suzuki Motor Corporation as its minor partner.

    Premier Padmini Maruti case study
    Premier Padmini

    Maruti Suzuki – 1983

    Maruti Udyog signed a license and joint venture agreement (JVA) with Suzuki Motor Corporation of Japan in 1982. This is when the very first factory of Maruti Suzuki was established in Gurgaon, Haryana. In the first 2 years when Maruti was set up, the company was engaged in the importing of fully-built cars from Suzuki, which later grew to include only 33% native parts. This was not what the indigenous company had planned.

    Though Maruti was ready with the idea of its own manufacturing facility in India, the company couldn’t continue with its plan fearing the small market here in the subcontinent. Besides, our country was in need of producing fuel-efficient vehicles to meet the increasing demands as the local transport was inefficient. This is why the company thought of adjusting the petrol tax and also reduce the excise duty to ramp up their sales.

    Maruti Suzuki began its local production in December 1983 and introduced its Suzuki Alto (SS30/SS40), Suzuki Fronte, and Alto-based Maruti 800.

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    Maruti Suzuki – 1986-1987

    Maruti Suzuki came up with a new and powerful Suzuki Alto (SS80), a 796 cc hatchback, which replaced the former Maruti 800 model in 1986. The company also successfully manufactured its 100,000th vehicle in the same year.

    By this time the company was already recognized for its stronghold in the automobile and at the turn of the new year, Maruti Suzuki also began its foreign exports. It started with exporting a lot of 500 cars to Hungary

    Market Liberalization and Maruti Suzuki – 1991

    1991 was the year of the liberalization of the Indian economy and by then, the company witnessed around 65% of its components being indigenized. It was also in this year that Maruti further increased its stakes in Maruti. Maruti Udyog then became a 50-50 joint venture with the Government of India and a Japanese automotive company as stakeholders.

    Maruti Suzuki – 1994

    Maruti Suzuki saw the production of its 1 millionth vehicle in 1994 since it started manufacturing automobiles. This year also saw the inauguration of the second plant of Maruti. Furthermore, the automobile manufacturers also started their 24-hour on-road emergency vehicle service.

    Maruti Suzuki – 2000-2002

    Maruti emerged as the first Indian car company to launch a call center for its internal processes and customer service in the year 2000. The company also saw the release of many more models of its cars in the next 2 years that followed, including the Esteem Diesel, which was launched in 2002. Meanwhile, Suzuki Motor Corporation also increased its stake in Maruti, which now became 54.2%.

    Maruti Suzuki – 2003-2004

    The company started the year 2003 with the introduction of the Suzuki Grand Vitara XL-7 and upgrading its Zen and Wagon R models. Later in the same year, the company manufactured the 4 millionth Maruti vehicle and also entered started its new partnership with the State Bank of India. Moreover, the company was also listed on BSE and NSE after which it went public with issues that were oversubscribed tenfold.

    Maruti 800, which was the best-selling Maruti car till 2004 was overtaken by the incredible popularity of the Alto model after 2 decades in the same year. Maruti Udyog concluded the financial year 2003–04 with a record 472,122 units as its annual sale, which reached an all-time high since the company began operations.

    Maruti Suzuki – 2007

    On May 10, 2007, the government of India took an exit from the country’s largest car maker Maruti Udyog Ltd by selling the residual stakes, which amounted to Rs 2,360 crores to a bunch of financial institutions led by the Life Insurance Corporation. In July 2007, Suzuki decided to change the name of its subsidiary to Maruti Suzuki India Limited.

    Maruti Suzuki Logo Maruti case study
    Maruti Suzuki Logo

    Maruti Suzuki – 2012 and the Later Years

    Maruti Suzuki successfully sold its 10 millionth vehicle in February 2012. The company boasted of having a market share of 45% in July 2014 and then in May 2015, it witnessed the production of the 15 millionth vehicle in India with the launch of the Maruti Suzuki Swift DZire.

    Maruti Suzuki was cautious of the environmental factors and understood the need of embracing environmentally friendly automobiles. This is why the company declared that it would phase out the manufacturing of diesel cars by 1 April 2020. Furthermore, by this time the Bharat Stage VI emission standards also came into effect, which announced that the company must significantly invest in its diesel cars to comply with the stringent emission standards.

    The company plans to launch its first electric car in the second half of 2021, according to the reports. The car would be named Maruti Suzuki WagonR Electric, which is currently put to test.

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    How Maruti Suzuki Became Successful

    Maruti has carved its own league of success throughout the years that it has remained in business. The company now boasts of having 9 subsidiary companies in total, namely:

    • True Value Solutions Ltd
    • Maruti Insurance Agency Logistics Ltd
    • Maruti Insurance Agency Solutions Ltd
    • Maruti Insurance Distribution Services Ltd
    • Maruti Insurance Business Agency Ltd
    • Maruti Insurance Agency Services Ltd
    • Maruti Insurance Agency Network Ltd
    • J J Impex (Delhi) Pvt Ltd
    • Maruti Insurance Broker Ltd

    Maruti Suzuki had surely achieved great success. 5 Main things that ushered in the success of the company are – Affordability, Goodwill, Hatchbacks, Low Maintenance & NEXA

    Affordability

    In the early ’80s cars weren’t something that every Indian man or a middle-class family could afford. It was a luxury resource about which only a few people could dream. There weren’t many car companies since liberalization came late in India.

    When Maruti Suzuki entered the Indian market, the most prominent factor which made it the market leader at that time was the price of its cars. They were very successful in launching cars with excellent features at an Indian budget-friendly price which made it ‘people’s car’.

    Even to date company’s cars are known to be in a range which any middle-class man today can afford to buy.

    Goodwill

    Over a decade ago, Maruti Suzuki launched an advertisement video which said ‘Ghar aa Gaya Hindustan’ which became an instant sensation among people of India. Since the initial years, Maruti Suzuki has been successful in creating a notion into the minds of people that they associate home, the nation with their car.

    Their commercial still instills that India comes home in a Maruti Suzuki. The company has received great acceptance for the brand and its customers are very loyal to them. All these years, customer satisfaction has proved that Maruti Suzuki’s goodwill and brand loyalty are very strong and enthralling.

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    Hatchbacks

    Hatchbacks are the most idol cars for Indian roads and they rule the market. They are everywhere present in the market and are the most preferred body type throughout the nation. Maruti Suzuki initiated the concept in India and its most popular hatchback car Alto is one is the most demanded cars in India to date.

    Maruti alto
    Maruti Suzuki Alto

    Low maintenance

    When comparing the services of different automobile companies in India, Maruti Suzuki’s service charges are lower. The best thing about their services is that they have various stations and centers across the nation where they serve a huge number of cars daily. Today they make most parts in India under the Made in India and hence their spare parts and components are variably low when compared to other automobile companies.

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    NEXA

    Since Maruti Suzuki’s cars were always looked at as the mid-range cars that serve the middle-class category they wanted to enter the other market too. That is when Maruti Suzuki launched NEXA. In 2015 they started the delivery and operations of its premium range cars. This helped them engage with their high-end customer category.

    Maruti Suzuki Nexa
    Maruti Suzuki Nexa

    Conclusion

    The automobile sector has been growing rapidly over the past decade, even after the Covid-19 pandemic. Maruti Suzuki cars have emerged as budget-friendly and low-cost cars with superior after-sales services that have made it India’s top choice for many car owners.

    Maruti Suzuki will play a very important role in making cars assessable and available to many Indians in the future as well. Its aggressive management and promotion strategies will cater to huge demand in the Indian automobile market.

    FAQ

    What is the net worth of Maruti Suzuki?

    As of 2020, the total assets of Maruti Suzuki is ₹63,627 crore (US$8.9 billion).

    Who is the chairman of Maruti Suzuki?

    Shri Ravindra Chandra Bhargava is the chairman of Maruti Suzuki.

    Is Maruti a Govt company?

    Maruti was a Govt company, but in 2002, the Indian government gave the charge of the management of Maruti Udyog Ltd. to Suzuki for a consideration of Rs1000 crore.

  • Cannibalization- Why Do Brands Cannibalize Their Existing Products (With Examples)

    Every Business has faced this situation, where there’s depletion in the company’s sales turnover as a new product has been introduced, repercussions affecting the sale of old products in the similar product line.

    In other simple words, generally, Cannibalization refers to eating one species, where the devourer belongs to the same species. Just like that, in the business field, the instigation of modern products is coupling the demand and supply of former products.

    Obviously, people purchase the new launch and totally overlook the old product considering it a banal version of a similar product line, moreover this is prevalent in business.

    For instance, Apple constantly releases a series of iOS to its customers, when the company introduced iPhone 12 Pro, people were enthralled to acquire it and ultimately shut one’s eyes to its previous version-iPhone 12. Thus; Cannibalization engenders no vicissitudes in the company’s sales turnover regarding existing products but gradually accelerates sales growth for the new product.

    What is Cannibalization?
    Effects of Cannibalization
    Why is there a need for Cannibalization in Brands? How they overcome Cannibalization?
    Five examples to state that Cannibalization works for existing products:
    FAQ

    What is Cannibalization?

    Numerous corporations practice Cannibalism in Brands, by discounting existing products to compete with their recent products in the market. As a result, this will bring an augment profit on both existing and new products of the company. Besides, Cannibalization is nothing but a competition between exciting and fresh products of the same brand within the company.

    Effects of Cannibalization

    Just like Newton’s third law: for every action, there is always an equal and opposite reaction. So, when the incorporation did anything, then it would definitely influence the incorporation in terms of sales or production.

    If the company inaugurates a fresh product, say McDonald’s comes up with BTS meals, no wonder the BTS armies are everywhere and BTS meal is hyping up in recent times, albeit the existing food products like Big Mac or McMuffin are receiving derivative fond as customers prefer BTS meal to any other foods in McDonald.

    Therefore; no one holds any reprehensible for the loss of the company’s market share, but itself the company by inaugurating new products as one of the newest versions of its old products.

    Why is there a need for Cannibalization in Brands? How they overcome Cannibalization?

    Cannibalization plays a crucial part in brands; where existing products are overlooked because of the newest product introduction. This will accelerate the demand for new products and decrease the sales of former products of its similar product line.

    Businesses cannibalise their existing or outdated products by employing two ways to meet the same demand of their new product:

    Discount

    Company plans to touts existing products due to cannibalization, by providing discounts on such products in order to compete with the same demand for fresh products.

    For instance; Samsung has launched its new version Samsung Galaxy F22 in July 2021, which overruled its preceding product Samsung Galaxy F12 which came to the market in April 2021.

    What is the company planning to do, provided the former Samsung Galaxy F12 sales slump due to the demand for Samsung Galaxy F22 inflates?.

    Factually, it is apparently evident that people would buy stuff when it is provided at a discount rate. So, the company vents former products at a discount price, where people fall for Samsung Galaxy F12 rather than paying a higher price for its newer version.

    E-commerce

    This pandemic became a beneficiary to e-commerce, where everything is supplied through Amazon, Flipkart or Myntra etc. E-commerce is the best way to captivate customers by generating many offers such as festival offers, Today’s Deals or deal of the day etc. For instance, Amazon recently applied for 26th-27th July Amazon prime Day India by selling products at low prices.

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    Five examples to state that Cannibalization works for existing products

    Cannibalization for existing products can be seen in every company when a new product is launched ranging from low-cost products like school supplies to high-end products like vehicles. The cannibalization of existing products can be proved through these examples.

    iPhones

    Apple introduced iPhones which cannibalized iPods
    Apple introduced iPhones which cannibalized iPods

    Steve Jobs, the founder of Apple in his biography has quoted saying that ”If you don’t cannibalize yourself, someone else will”. And likewise, Apple itself cannibalizes its products.

    The iPhone first model was launched in June 2007. During this period Apple was coveted for its iPods and sales were at a high rate but Apple came out with iPhones that practically had the music feature along with phone services with internet connectivity and media support.

    This led to consumers straying towards iPhones as they were a better substitute for iPods. This product like in the case of iPhones is an example of Self Cannibalization.

    Coke-Zero

    Coke Zero Cannibalized Coke
    Coke Zero Cannibalized Coke

    Coca-Cola, famous for its product Coke and Diet Coke, chipped away at its sales by introducing Coke-Zero targeting the male population that worried about their sugar intake in 2006 in the UK while compensating their total revenue.

    Coca-Cola has also cannibalized itself by introducing Minute Maid, Fanta, etc. and removing coke and its variants as the essential face of the company.

    P&G’s Tide Detergent

    Tide Detergent was introduced to cannibalize P&G's Ivory Soap
    Tide Detergent was introduced to cannibalize P&G’s Ivory Soap

    Procter & Gamble was mainly known as a manufacturer of soap and was known for its Ivory Soap which had drawbacks of its own like dirt wasn’t removed when used with hard water.

    So even with risking cannibalization of their Ivory Soap, the company went ahead and introduced Tide Detergent in 1946 which was the first synthetic detergent that could deep-clean clothing as P&G didn’t want to be cannibalized out of the soap producer industry.

    Maruti Suzuki Alto

    Maruti launched Alto which cannibalized Maruti 800
    Maruti launched Alto which cannibalized Maruti 800

    Maruti Suzuki Alto manufactured by Maruti Suzuki was introduced in 2000. It was the Indian built version of the fifth-generation Suzuki Alto. In 2006, it was India’s largest selling car and by 2008 it had crossed 1 million in terms of production. But this increase in sales was only achieved by eating away the sales of the famous Maruti Suzuki 800. This was done with the help of price cuts and an ad campaign that lured many.

    WeChat

    WeChat was introduced to cannibalize QQ
    WeChat was introduced to cannibalize QQ

    China’s Tencent famously known as the world’s largest gaming company and the most-used internet portal used QQ an online instant message service during the period when desktop computers were the hype.

    QQ failed to meet the standards with the development of smartphones and electronic devices. Therefore Tencent ordered a group of engineers to develop a messaging platform that would cannibalize QQ. Thus, WeChat was developed and released in January 2011.

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    Conclusion

    When human beings, in general, see something better, they essentially want it and feel inadequate with the thing they already possess and an urge to be updated with the upgraded version begins to fester. This is exactly what leads to the cannibalization of products.

    The overlooking of existing products for a new one. If this phenomenon doesn’t work, there wouldn’t be customers for a newly launched product be it smartphones or vehicles.

    Also known as corporate cannibalization of market cannibalization, this phenomenon is also the doom for a company as this nips away the sale of the previously introduced product. Thus proving this phenomenon to be double-edged.

    FAQ

    What is the example of brand cannibalization?

    Coke Zero was introduced by Coca-Cola which chipped away the sales of Coke is one of the famous example of brand cannibalization.

    What is Cannibalization?

    Cannibalization is nothing but a competition between exciting and fresh products of the same brand within the company.

    Why do brands cannibalize their existing products?

    Brands usually cannibalize their existing products to accelerate the demand for new products and decrease the sales of former products of its similar product line.

  • This is the reason why Maruti Suzuki saw a decline of 71% sale in May

    Maruti Suzuki India which is one of the largest manufacturers of the four-wheeler segment in the country has seen a decline in the sales during the month of May. The company has been a pioneer in the consumer market segment of four-wheeler sales in the country. Let’s look at the reason for the decline in the number of sales.

    Maruti Suzuki – Latest News
    Segment wise decline
    Reason for the decline in Sales of Maruti Suzuki
    About Maruti Suzuki India
    FAQ

    Maruti Suzuki – Latest News

    On 1 June 2021, Maruti Suzuki had reported that there was a decline of around 71% in the sales of the largest carmaker in the country on May 2021. The carmaker has seen a decline of 71% when compared to the sales on April 2020 as during the month of April the sales were around 1,59,691 compared to the sales of May which amounted to just 46,555 units.

    Maruti Suzuki India had also conveyed that their domestic dispatches to their dealers in the month of May amounted to around 35,293 units which saw a decline while compared to the month of April which amounted to around 1,42,454 units.

    Segment wise Decline in sales of Maruti Suzuki

    The sales of mini cars of the company such as S-Presso and Alto saw a decline of around 81% during the month of May which amounted to 4,760 units when compared to April which amounted to 25,041 units.

    The sales of the compact segment vehicles such as Swift, Baleno, Dzire and Ignis saw a decline of around 72 % during the month of May which amounted to 20,343 units when compared to April which amounted to 72,318 units.

    The sale of the mid-sized sedan which is Ciaz saw a decline during the month of May which amounted to 349 units when compared to April which amounted to 1,567 units. The sale of Utility Vehicles which include Vitara Brezza, Ertiga and S-Cross had also seen a decline of around 75 % during the month of May which amounted to 6,355 units when compared to April which amounted to 25,484 units.

    As per the report received from Maruti Suzuki India, the company has also seen a decline in their export segment of around 35% which amounted to 11,262 units in the month of May when compared to the 17,237 units in the month of April.

    Reason for the decline in Sales of Maruti Suzuki

    One of the major reasons for the decline of the sales for the largest carmaker in the country was due to the shutting down of their manufacturing units. It is seen that the company had shut down the production process in the month of May 2021 from 1st to 16th.

    The production process was stopped by the company in order to divert the oxygen from the industrial usage for the medical purpose across the country. There was a nationwide crisis as the majority of the hospitals have been facing a lack of oxygen supply for the patients and a lot of them losing their lives.

    Soon after that, the major places in the country had gone under lockdown and not having a proper production process for the entire month has affected the sales volume of May 2021.

    Maruti Suzuki Sales compared to May 2020
    Maruti Suzuki Sales compared to May 2020

    About Maruti Suzuki India

    Maruti Suzuki India is a subsidiary company of the Japanese based automotive manufacturer Suzuki. The company was formerly known as Maruti Udyog Limited and was owned by the Government of India in between 2981 to 2003. In the year 2003, the Government of India had sold it to the Japanese company Suzuki Motor Corporation.

    The company has a market share of around 53% in the Indian car passenger market. The company has its headquarters located in New Delhi, India.

    Conclusion

    Maruti Suzuki India has conveyed that due to the shut down of production for the supply of oxygen and disruptions faced due to lockdown, the normal production hasn’t taken place in the past two months and hence the sales volume of May 2020 is not comparable to the one that of May 2021.

    FAQ

    Who is the CEO of Suzuki?

    Osamu Suzuki is the current CEO of Suzuki.

    When was Maruti Suzuki founded?

    Maruti Udyog limited was founded by the government of India in 1982.

    Is Maruti Suzuki most selling car in India?

    Yes, Maruti Suzuki has been consistent in selling most number of cars for fourth consecutive year.

  • Maruti Suzuki – Emerging Stronger than Ever

    Company Profile is an initiative by StartupTalky to publish verified information on different startups and organizations. The content in this post has been approved by the organization it is based on.

    Maruti Suzuki India Limited, formerly known as Maruti Udyog Limited, is an Indian automobile manufacturer headquartered in New Delhi. It is a subsidiary of the Japanese automotive manufacturer Suzuki Motor Corporation.

    Maruti Suzuki has 3,598 sales outlets across 1,861 cities in India. The Brand Trust Report published by Trust Research Advisory, a brand analytics company, has ranked Maruti Suzuki in the thirty-seventh position in 2013 and ninth position in 2019 among the most trusted brands of India.

    Maruti Suzuki – Company Highlights

    Startup Name Maruti Suzuki India Limited
    Headquarters New Delhi, India
    Industry Automotive
    Founded 24 February, 1981
    Founder Government of India
    CEO Kenichi Ayukawa
    Parent Suzuki Motor Corporation
    Area Served India
    Website www.marutisuzuki.com

    Maruti Suzuki – About and How it Works?
    Maruti Suzuki – Logo and its Meaning
    Maruti Suzuki – Recent News
    Maruti Suzuki – Founder and History
    Maruti Suzuki – Mission
    Maruti Suzuki – Joint Ventures
    Maruti Suzuki – Business Model
    Maruti Suzuki – Revenue and Growth
    Maruti Suzuki – Recent Acquisition
    Maruti Suzuki – Competitors
    Maruti Suzuki – Challenges Faced
    Maruti Suzuki – Future Plans
    Maruti Suzuki – FAQs

    Maruti Suzuki – About and How it Works?

    Maruti Suzuki India Limited is a holding company. The Company is engaged in the manufacture, purchase and sale of motor vehicles, components and spare parts (automobiles). The other activities of the Company comprise facilitation of pre-owned car sales, fleet management and car financing.

    Its geographical segments include the domestic segment, which includes sales to customers located in India, and the overseas segment, which includes sales to customers located outside India. The Company’s product portfolio includes Alto 800, Alto K10, Wagon R, Celerio, Ritz, Swift, DZire, Ertiga, Omni, Eeco, Gypsy, Ciaz, etc.

    Its service offerings include Maruti Finance, True Value, Maruti Genuine Parts, Maruti Genuine Accessories, Maruti Suzuki Auto Card and Maruti Driving School. It has approximately five plants, located in Palam Gurgaon Road, Gurgaon, Haryana, and at Manesar Industrial Town, Gurgaon, Haryana, with an installed capacity of over 1.5 million vehicles per year.

    Maruti Suzuki – Logo and its Meaning

    The present variant of Suzuki logo is designed in red and blue colours. The red colour (the letter S of Suzuki) represents passion, integrity and tradition, while the blue(the letter M of Maruti) stands for excellence and grandeur.

    Maruti Suzuki's Company Logo
    Maruti Suzuki’s Company Logo

    Maruti Suzuki – Recent News

    • Maruti Suzuki sees ‘much better’ 2021 as economy rebounds: Chairman
    • Maruti Suzuki sales increase 1.7% to 1,53,223 units in November

    Maruti Suzuki – Founder and History

    Maruti Udyog Limited was founded by the government of India on 24 February 1981, only to merge with the Japanese automobile company Suzuki in October 1982. The first manufacturing factory of Maruti was established in Gurugram, Haryana, in the same year.

    The company was formed as a government company with Suzuki as a minor partner to make a people’s car for middle class India. Over the years the company’s product range has widened ownership has changed hands and the customer has evolved.

    On October 2, 1982 the company signed the licence and joint venture agreement with Suzuki Motor Corporation Japan. In the year 1983 the company started their productions and launched Maruti 800. In the year 1984 they introduced Maruti Omni and during the next year they launched Maruti Gypsy in the market. In the year 1987 the company forayed into the foreign market by exporting first lot of 500 cars to Hungary.

    In the year 1990 the company launched India’s first three-box car Sedan. In the year 1992 Suzuki Motor Corporation Japan increased their stake in the company to 50%. In the year 1993 they introduced the Maruti Zen and in the next year they launched Maruti Esteem in the market.In the year 1995 the company commenced their second plant. In the year 1997 they started Maruti Service Master as a model workshop in India to look after sales services.

    In the year 1999 the third plant with new press paint and assembly shops became operational. In the year 2000 the company launched Maruti Alto in the market. In the year 2002 Suzuki Motor Corporation increased their stake in the company to 54.2%.

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    Maruti Suzuki – Mission

    Maruti Suzuki’s mission statement says, “To be The Leader in the Indian Automobile Industry, Creating Customer Delight and Shareholder’s Wealth; A pride of India.”

    Maruti Suzuki – Joint Ventures

    Relationship between the Government of India, under the United Front (India) coalition and Suzuki Motor Corporation over the joint venture was a point of heated debate in the Indian media until Suzuki Motor Corporation gained the controlling stake. This highly profitable joint venture that had a near monopolistic trade in 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 to 50% in 1992, and further to 56.21% as of 2013. In 1982, both the venture partners entered into an agreement to nominate their candidate for the post of Managing Director and every Managing Director would have a tenure of five years.

    Maruti Suzuki – Business Model

    Maruti Suzuki’s product range extends from entry level small cars like Alto 800, Alto K10 to the luxury sedan Ciaz. Other activities include facilitation of pre-owned car sales fleet management, car financing. Its Business Segments are divided into : Operating Income from sales of cars and Interests from Investments.

    • Maruti Suzuki offers 17 models of cars
    • Company focuses on catering to the needs of almost all the segments from the middle class to high class through wide range of products

    Maruti Suzuki – Revenue and Growth

    Maruti Suzuki: growth highlights are:

    • It has a presence in 34 cities as of March 2024
    • The company has 16,500 employees as per LinkedIn as of March 2024
    • It has served over 27 million happy customers in India as of March, 2024
    • It acquires news stakes in AI startup Amlgo Labs as per a news report from March 23, 2024
    • The company has manufactured close to 2 million cars a year in FY 2022-23

    Financials

    Auto major Maruti Suzuki reported 2.05 per cent year-on-year growth in consolidated profit at Rs 1,419.6 crore for the September quarter of FY21 (Q2FY21) while revenue rose 10.34 per cent to Rs 18,755.6 crore. In comparison, the company had posted revenue of Rs 16,997.9 crore and profit of Rs 1,391 crore in the corresponding quarter of last year.

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    Maruti Suzuki – Recent Acquisition

    Maruti Suzuki India on 13 May 2020, said its board took a slew of decisions, including acquisition of Delhi-based JJ Impex, and supply of Vitara Brezza to Toyota Kirloskar Motor (TKM). The car major on said its board has approved acquiring 39.13% equity stake held by Sumitomo Corporation, Japan and 10% held by Sumitomo Corporation India in JJ Impex (Delhi), a company engaged in automobile service and repair business.

    The cost of acquisition or the price at which the shares are to be acquired is fixed at Rs 21.73 crore, the company said.

    After the acquisition, the company shall become the wholly-owned subsidiary of MSIL. MSIL shall have the right to nominate/ appoint all the directors on the board of the company. The nominee Directors of Sumitomo Group shall resign from the board of the company, Maruti Suzuki India (MSIL) said. The acquisition does not require any government approvals, it added.

    Maruti Suzuki – Competitors

    The top 10 competitors in Maruti Suzuki’s competitive set are Tata Motors, Honda, Hyundai, Mahindra, Toyota, Chevrolet, Ford, Volkswagen, Ashok Leyland and Mercedes-Benz.

    Maruti Suzuki – Challenges Faced

    Suzuki Motors Corporation had to recall certain models of vehicles such as the Grand Vitara and XL 7 which were manufactured in the year 2005. A problem was detected in the adjuster pulley for the drive belt which has the outer portion made up of plastic and operates the power steering pump and air conditioner compressor. Repeated heat stress caused the outer body made up of plastic to weaken and pieces of the pulley broke off.

    The company found out that the broken pieces of pulley can get caught between the pulley and the drive belt which can cause the drive belt to come off resulting in increased effort to steer the vehicle by the driver which in turn increased the risk of a crash or accidents. The company made a plan to resolve the issues in the vehicles with this problem and the dealers of Suzuki Motor Corporation replaced the power steering pump belt tension adjuster free of charge for the customers whose vehicles had the same defect.

    Suzukis subsidiary Maruti Suzuki India Limited faced a great challenge to keep its lead in the small market segment of automobiles in India. The company was facing severe production issues which resulted in a long gestation period for some top-selling brands such as Maruti Suzuki Swift, Maruti Suzuki Swift Desire and a few other models. These production issues could have lead to loss in the market share of Maruti Suzuki in India however the company dealt with the situation by working with their vendors to increase the supply of the materials and the company was able to deal with the backlogs of its normal sales on many models.

    Difficult days, but we will emerge stronger—This was the message India’s biggest car company gave out on Wednesday as it came out with its annual integrated report for the 2020 financial year and took stock of the toll that the pandemic was inflicting on its bottom line.

    “The COVID-19 epidemic has given your company as well as its vendors and dealers an opportunity to review all systems of working and become more efficient and competitive. Thus, while we are going through difficult days, I believe we will emerge stronger and fitter in the future,” Maruti Suzuki chairman R.C.Bhargava said, addressing stakeholders.

    The market leader had posted losses for the first time in about two decades, as the April-June 2020 quarter showed nearly Rs 250 crore loss. Net sales had declined to less than Rs 4,000 crore, compared to nearly Rs 19,000 crore from the period in the previous year.

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    Maruti Suzuki – Future Plans

    In an alliance with Toyota, Maruti Suzuki will be targeting the Hyundai Creta space with a midsized SUV in 2022, and this vehicle will be based on the current Brezza architecture. A C-segment MPV in 2023 is also planned, and both vehicles are likely to be produced at Toyota’s factory in Bidadi.

    Unlike the re-badged Baleno, Ciaz and Ertiga, which will be shared by Maruti and Toyota in India till 2022, the SUV and MPV under development are likely to have distinct characteristics or differentiation to ensure that both companies gain from India’s growing preference for utility vehicles.

    “With over a dozen SUVs planned by its rivals, Maruti Suzuki knows it has to have competitive offerings to retain its 50% overall share. The exit from diesel makes compact UVs a challenge, but a 1.5-litre diesel engine is not yet ruled out,” said one of four executives aware of Maruti’s plans. “Plus, Maruti will be relying on the localised hybrid solutions from Toyota to spruce up its future portfolio.”

    The utility vehicle segment is expected to overtake the humble hatchback segment in India, as an increasing number of buyers prefer the tall and high-seating SUVs and MPVs that cost as low as Rs 5 lakh and as high as Rs 1 crore. According to vehicle forecasting firm IHS Markit, utility vehicle sales will close 2019 at 38%, a tad behind the hatchback segment, before overtaking the latter in 2020. The share of entry-car or mini-car segment, once Maruti’s mainstay, today accounts for just 10% of the overall market as against 25% share it enjoyed 5-7 years ago.

    Apart from bringing in the petrol versions of Vitara Brezza and S-Cross, Maruti created an entrylevel SUV with S-presso. Maruti expects a significant number of its Swift, Dzire, Ciaz, and Ertiga buyers to eventually upgrade to a bigger SUV and MPV.

    Maruti Suzuki – FAQs

    Who is the owner of Maruti Suzuki?

    The company is a subsidiary of Suzuki Motor Corporation of Japan.

    Which country company is Maruti Suzuki?

    Maruti Suzuki India Limited (MSIL), formerly known as Maruti Udyog Limited, a subsidiary of Suzuki Motor Corporation of Japan, is India’s largest passenger car company, accounting for over 50 per cent of the domestic car market.

    Where is the head office of Maruti Suzuki?

    Maruti Suzuki India Limited, formerly known as Maruti Udyog Limited, is an Indian automobile manufacturer headquartered in New Delhi.

    Who is the CEO of Maruti Suzuki?

    Kenichi Ayukawa is the current CEO of Maruti Suzuki.

  • Why the demand for used cars is increasing?

    This Pandemic has brought many changes in our lifestyles and hence the market. One such change is the drastic increase in demand for a used car. But strangely, it’s much before the pandemic that the demand for a used car was so high. This pandemic has just fueled it more.

    After India entered the BS-VI era in auto-industry from April 2020, the value proposition of the used cards is growing stronger. People in India have always been price-conscious. They are expecting cars to become expensive due to additional technology costs. Which has led them to opt for used cars rather than the new ones? And why not? When they are getting a better option for the same price as that of the new car !!

    As per the MD and CEO of Mahindra First Choice Wheels (MFCW), companies are gradually focusing on reducing the production of diesel cars. After Maruti Suzuki decided to exit the diesel car segment by April 2020, the demand for compact diesel cars in the used car market showed a steep growth. Unless of course, there is a backlash against diesel cars.

    The markets are dominated by the major players like OLX, Mahindra First Choice Wheels, Cars24, Maruti True Value, Hyundai H Promise, and others.

    Some Factors, that affect the growth of the used cars in the market are:

    • Organized Channel Expected to Register Higher CAGR
    • Growing demand for luxury cars
    • Competitive Landscape
    • Increased Reliability
    • Reduction of the Ownership period
    stacked up used cars
    stacked up used cars

    Organized Channel Expected to Register Higher CAGR

    In the Indian market, the organized phase is anticipated to witness a CAGR growth of 22.79% throughout the forecast amount.

    This marketplace for used automotive has seen vital growth over the last 3 years. This growth increase is especially driven by sales of used cars in railway system cities and an increase in online sales platforms, like CarDekho, Cars24, Droom, etc.

    The majority of the OEMs have already entered the used automotive market. and people WHO didn’t enter the used automotive market at the initial stage entered the market throughout the last 5 years. Renault started the pre-owned automotive business in 2015 and Nissan had entered the business in 2017.

    Significant OEMs in the Asian country, like Maruti Suzuki, Mahindra, Hyundai and Toyota, and luxury automotive makers, like BMW, Audi, and JLR, have their used automotive network.
    The sales have enlarged since 2017.

    Consumers like safety, transparency, convenience, and low risk, whereas buying a second-hand automotive. that ought to act in favor of the organized sector. nevertheless, the unorganized sector occupies nearly eightieth of the whole market than the organized sector.

    sales in organised sector vs un-organised sector
    sales in organised sector vs un-organised sector

    Growing Demand for Luxury Cars

    One of the main reasons for the rise in the used automotive business is the demand for luxury cars. Before, owning a luxury automotive was accustomed to being a dream for the bulk, chiefly owing to money issues. however, this can be step by step dynamic, because the shoppers should buy used automotive.

    Some major factors driving the expansion of the used luxury cars are as follows –

    • luxury cars have a high rate of depreciation worth,
    • youth driving towards higher model on low value
    • in urban cities, deprivation in finance management, and want quality product.
    • increase in the online marketplace for used automotive.

    One of the major reason for the increase in used car business is the demand for luxury cars. Before, owing a luxury car was used to be a dream for the majority, mainly because of financial problems. But this is gradually changing, as the consumers can buy used car.

    Reduction of Ownership period

    Owners of the posh cars tend to unload their vehicles within a year or two. As they need for upgraded and higher models.
    A few years ago , the possession amount was of 6-7 years for many cars. It’s currently reduced to around four years and is predicted to dip additional to 3.5 years by 2021.
    This directly impacts the availability of used cars in market and additionally in good shape. That additional has led in accessibility of alternative for the shoppers.

    Competitive Landscape

    Online Presence

    Opening of on-line platform could be a major force behind a rise within the numbers of the used vehicles business. Conversion has conjointly been instrumental in organizing the used automotive business on-line that historically been aloof from the net area.

    With the existence of on-line portals, customers are able to flick through variety of used cars that work into their budget. It’s conjointly created the purchasers aware and able to search full regarding their future purchases yet.

    Organised Players

    The marketplace for used automotive in Asian country is generally commanded by major players like OLX, Mahindra 1st alternative Wheels, CARS24, Maruti True worth, and Hyundai H Promise. They have the biggest share of the market due to their business models and enlarged variety of pre-owned automotive shops.

    Quikr, Honda automobile Terrace, Ford Assured, Toyota U-Trust, etc., are within the method of increasing their shops and operations within the native market.

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    Increase in responsibleness

    Due to the increasing technological advances in the automobile sector, cars have gotten a lot of reliable.
    A well-maintained automotive can simply run, not bothering for years. This means, even the second owner of the vehicle, will be assured of a hassle-free driving possession expertise.
    Manufacturers are providing long pledge periods up to 7 years in some cases. This offer gives rise to the preference of shopping for a second user automotive. They get the advantage over manufacturing defects which will be treated with no overhead prices.

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    Statistics

    • The used automotive market in the Asian country was valued at USD 24 billion in 2019. And it’s expected to register a CAGR of fifteen.12% throughout the amount (2020-2025).
    • The demand for used luxury cars has been growing at some thirty-fifth – four-hundredth year-on-year basis.
    • OLX’s report shows, the used luxury vehicles whose value was Rs 15lakh or more were the foremost most popular alternative among the shoppers.
    • Every month over 55,000 luxury cars are listed. The provision for premium cars jumped by over fourfold in 2017.
    • According to the OLX automobile Note report, 38th% of the 4-wheeler listing consisted of top-end sedans and luxury cars.
    • Mahindra 1st alternative Wheels has recorded sales growth of four-hundredth throughout 2018-19. that registered a revenue of Rs 148 crore.
    • It is sold-out over 250,000 used cars throughout 2018-2019.
    • CarDekho has been in the number 1 position. Within the on-line used automotive market recording a Year-on-Year rate of regarding 100 percent over the last 3 years.

    With COVID-19, folks are following social-distancing. While they’re attempting to urge back to their family, folks are preferring personal transport over the public. and during this time of crisis, the economic resolution is to shop for a second-hand automotive