Maruti Udyog Limited (MUL)

“What it (MUL) did to Premier Automobiles Ltd. and Hindustan Motors is now being done to
it.”

- AN MUL Rival.

History
MUL was a joint venture created in February 1981 between Japan’s Suzuki Motor Company and
the Indian Government when the latter decided to produce small, economical cars for the masses.
The intention from the beginning was to produce a ‘people’s car’. To get the project off the
ground MUL took over the assets of the erstwhile Maruti Ltd., which was set up in 1971 and
closed in 1978.

On December 14, 1983, MUL launched the first Maruti vehicle – the Maruti 800. The first model
was the SS80, a 796cc hatchback car priced at Rs. 47,500. Subsequently, in spite of price hikes,
the car remained within the reach of the Indian middle class and became a runaway success.
Available in vibrant colours when India’s passenger car population comprised mainly
Ambassadors and Fiats in black and white, M800 gave Indians the first taste of global quality
and reliability.

In the years that followed, MUL consolidated its position with a line of Indian classics, such as
the eight-seat Omni, the rough-terrain Gypsy, and, in October 1990, a 3-box Maruti 1000. MUL
took the lead in the green drive by launching its CNG-run Omni and Maruti 800 in 1999.

MUL redefined the premium compact segment with the launch of the Zen in October 1993. It
was the company’s first ‘world car,’ selling across multiple markets. A year later, the Zen had
won several awards, including ‘No. 1 car in Europe’ (Auto Week, 1994), ‘No.1 import in
Europe’ (1997) and ‘most fuel-efficient car’ (ADAC). Since its launch, the Zen has sold over
624,979 units. This ‘true Indian globetrotter’ was followed by 1300cc Esteem, which was an
exact replica of the Maruti 1000 – since discontinued – with more power and a new exterior.

In the late1980s, Suzuki increased its equity stake in MUL from 26% to 40% and further to 50%
in 1992, converting Maruti into a non-government company. In May 2002, Suzuki took
management control of Maruti. Earlier, a series of time-consuming negotiations between the
government and Suzuki led to delays in introducing new models giving competition time to
nibble at MUL’s commanding market share. As Maruti Suzuki’s share declined from 65% in
1999 to 52% in 2000, the company realised that it had to make up for lost time.
In 1999, MUL launched Baleno and WagonR. Baleno targeted the premium mid-segment while
WagonR was positioned as a multi-activity vehicle. In 2000, MUL announced that it would
launch a new model every six to twelve months. Accordingly, in 2000, Maruti Suzuki introduced
Alto – a premium small car targeting the export market – and in October 2001, Versa, a
multipurpose vehicle.

As competition intensified, MUL launched various initiatives to improve customer service. In

1999, it established a chain of model workshops and soon after, set up customer call centres in
the metros. Traffic on Maruti Suzuki’s interactive website, which provided information and
practical help to customers, increased three-fold by March 2002.

In April 2003, MUL rolled out its latest offering, the Grand Vitara XL-7, a luxury SUV imported
from Suzuki Motor Corporation. The Grand Vitara was a concept that was radically different
from the models that comprised the bulk of MUL’s sales. Since its launch, Suzuki Grand Vitara
has sold over 157 units.

Market

The Indian car market is one of Asia’s largest and most competitive. Over 1,030,068 passenger
cars, multi and sports utility vehicles were sold during 2003/04, growing the market by 32%
(Source: Society for Indian Automobile Manufacturers – SIAM).

With models in every segment of the automobile market, Maruti Udyog Limited (MUL), is well
positioned to see how demand is shifting. Due to drop in prices and low interest rates there has
been a sharp migration of car buyers to the compact car or ‘B’ segment from the entry-level ‘A’
segment. This segment now accounts for 52% of the total passenger car market (excluding
MUVs/SUVs). Compact car sales have raced ahead in January 2004 by 82% to touch 40,649
units. This is more than 22,297 units sold in December 2003. These segments are two of the
success stories for the car industry.
Achievements
In the 1980s, the Maruti 800 (M800) was India’s first ‘people’s car’. It caught the fancy of the
middle class. Maruti Suzuki has never looked back since. In fact, in 2004, MUL will mark its
21st year of leadership in the Indian car market. The M800, first manufactured in

1983, has sold over 2.1 million units. Even though competition predicts that the ‘A’ segment is
dying, the M800 continues to sell an average 12,000 units per month.

It is not just the M800 that has kept MUL at the top of the car market; the versatility of the Omni
has also made it an attractive buy in Kenya, Mozambique, Cyprus and Nepal. The rugged Gypsy
is a front-runner in the 4WD segment in Africa, and the Alto in Europe has won several awards
overseas. Recently conferred the ‘Business Standard Motoring Jury Award 2004′ for its latest
offering, the Grand Vitara XL-7, MUL has proved that it can straddle two extremes – from a tiny
796cc commuter to a large V6-powered flagship.

MUL has made great strides in customer satisfaction. It is the only car company in the world to
be ranked highest in customer satisfaction for the fourth year in a row (Source: J.D. Power Asia
Pacific – India Customer Satisfaction Index Study, 2000/03).

The company’s latest offering, the Grand Vitara XL-7, heralds a new era in safety, customer
value and driving comfort. It is the first car in its class to offer an intelligent protection system
comprising a high-tensile steel ladder-box frame, three-point outboard seatbelts, dual airbags,
anti-lock brakes, side-impact beams and front/rear crumple zones for total passenger protection.

Product
MUL manufactures leading models in all segments of the car market. Maruti 800 rules the ‘A1′
segment. In the ‘A2′ segment, it has the Zen, WagonR and Alto, whose combined sales rose to
176,132 units in 2003/04, up 46% as compared to 2002/03. In the ‘A3′ segment, it offers the
Esteem and Baleno, while Omni and Versa stake out MUL’s presence in the MUV market. The
Gypsy King marks Maruti Suzuki’s presence in the rough-terrain sector, and up a couple of
notches in the luxury SUV market is the Grand Vitara.

MUL PRODUCT LINE

CARS
Maruti 800 Omni Maruti Alto

 Maruti 800 STD BS III  5 seater Maruti Omni  Alto

 Maruti 800 AC BS III  8 seater Maruti Omni  Alto Lx
 Maruti 800 Duo  LPG Maruti Omni  Alto Lxi

Maruti Zen Estilo Wagon R Versa

 Maruti Zen Estilo Lx  WagonR Lx  5 seater

 Maruti Zen Estilo Lxi  WagonR Lxi  8 seater ( DX & DX2)
 Maruti Zen Estilo Vxi  WagonR Vxi
 WagonR Ax
 WagonR Duo

Maruti Esteem Baleno Swift

 Maruti Esteem Lx  Baleno Sedan VXi  Swift LXi

 Maruti Esteem Lxi  Baleno Sedan LXi  Swift VXi
 Maruti Esteem Vxi  Swift ZXi
 Swift Diesel’Ldi’
 Swift Diesel ‘Vdi’

Maruti Gypsy Maruti SX4 Maruti Zen Classic

 Hard top  Maruti SX4 Vxi

 Soft top  Maruti SX4 Zxi

Grand Vitara Swift DZire

COMMERCIAL VEHICLES
AMBULANCE
Omni Ambulance
AWAITED MODELS
Maruti Escudo Maruti Kazshi Maruti Suzuki Splash
Maruti A-Star

Recent Developments
MUL recently enhanced its product range with the introduction of the new Zen, new WagonR,
Grand Vitara, Versa and Baleno models. The strategy is based on meeting customer needs. In the
last 21 years, the company has launched twelve models and over 50 variants.

A striking new look featuring a more daring approach to design began with the launch of the Zen
Predator and has been gradually rolled out to encompass key models in the Maruti Suzuki
family. Keeping in mind the NFO Report, which illustrates that the key reasons for car purchase
today are brand image and price, the Zen Predator has been designed to give a perception of
greater width and lower slung to highlight the ‘strong, sleek and sexy’ image.

In addition to cosmetic changes, the Grand Vitara XL-7 boasts of a 2.7 litre V6 engine that
churns out a massive 166 bhp, making it ‘the

most powerful SUV in the Indian market’. Baleno Lxi, which went on sale in January 29, 2004,
was launched in response to customer feedback for ‘a big, safe car, which delivers on
performance and is priced below Rs. 6 lakhs’. WagonR, which has sold 100,000 units, now
features redesigned clear head lamps, clear tail lamps and a flowing chrome grille with provision
for front fog lamps.

Another significant development is MUL’s entry into the used car market in 2001, allowing
customers to bring their vehicle to a ‘Maruti True Value’ outlet and exchange it for a new car, by
paying the difference. Maruti Suzuki has also taken the lead in other customer related benefits.
For instance, Maruti Insurance is a hassle-free way for customers to have their cars repaired and
claims processed at any Maruti dealer workshop in India. Maruti Finance is a tie-up with eight
major finance companies which allows customers to choose from amongst standardised
financing options. Maruti N2N is a fleet management service. Maruti provides complete end-to-
end service including insurance, leasing, maintenance, registration, emergency assistance and
accident management. The company also provides assistance in fleet re-marketing.

Promotion
MUL strongly believes in attribute-oriented advertising. In an attempt to reposition M800 as a
choice for those upgrading from a two-wheeler, MUL’s campaign of a child playing with a toy
M800 drives home the fuel-efficiency factor: ‘the car never stops because the fuel never
finishes’. The future communication strategy that MUL has envisioned for M800 is a snap of a
typical middle-class family commuting on their two-wheeler. Next to them is another family
except that this one is comfortably ensconced in a Maruti 800.

One of MUL’s most ambitious television campaigns launched the Zen Predator. Positioning it as
‘strong, sleek and sexy,’ the commercial showcases the variant’s new styling through the theme
of predator and prey in the context of ‘a modern jungle.’ The theme is one of a chase that ends in
willing surrender, brought home in the baseline: ‘Surrender to the new Zen.’

The Zen Predator is being aggressively promoted in print. MUL bought the entire advertising
space on The Week’s first issue of 2004. Additionally, MUL is the first Indian automobile
corporate to utilise the internet for a complete branding exercise, using ‘interactive’ and ‘page
domination’ techniques.

Recently, MUL has turned its marketing focus to corporate TV commercials to promote its entire
range of vehicles. The company has rolled out a new corporate TV campaign, featuring the
‘Maruti Puttar’. The rationale behind a second TVC featuring the same child model as the M800
campaign is to leverage the brand recall of the earlier commercial, driving home the point that ‘A
Maruti Suzuki family is a happy family’.

MUL is involved in a wide range of sponsorship activities, placing particular emphasis on motor
sports. It was the founding sponsor of ‘Raid De Himalaya,’ and in its fifth year continues to be
closely involved with it. The company regularly holds car rallies for amateur drivers and aspiring
rallyists. MUL now has plans to host golf and polo events.

Brand Values
In 1983, Brand Maruti Suzuki was defined as ‘the people’s car’. These values have remained
consistent ever since.

Over the years, MUL has set the stage for the successful launch of Suzuki’s international range
in the Indian market, all backed by the inherent value proposition of high quality, fuel efficiency
and, compared with competition, low price. This formula has been largely responsible for a new
generation of Indian car users swearing by the Maruti Suzuki brand name.

Maruti Versa improper positioning

Associating with a star, however big he or she may be, in itself does not guarantee sales. The
most it can do is generate interest in the product or create a buzz around it. Take the case of
Maruti Versa, which was launched amidst a lot of fanfare about three years ago. In spite of
Maruti signing up superstar Amitabh Bachchan and his son Abhishek Bachchan as brand
ambassadors for Versa, the brand’s sales remained sluggish. To be fair, the Big B magic did
work and the ads created significant interest, drawing people into the showroom. But perhaps the
positioning itself was faulty as people were expecting a larger than life car, just like the brand’s
ambassador. Last year, we saw Versa being re-positioned as a family car, with the core
proposition being, “the joy of travelling together.” In the words of Ravi Bhatia, General Manager
of Marketing at Maruti, Versa has started doing well and has witnessed an upswing since the
new positioning. Last year, the average sales were 80-100 vehicles a month. Now they are selling
450 vehicles a month.