Maruti Suzuki - Emerging Stronger than Ever

Sarika Anand Sarika Anand
Dec 9, 2020 9 min read
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 Β the needs of almost all the segments from the middle class to high class through wide range of products

Maruti Suzuki - Revenue and Growth

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 strongerβ€”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.

β€œThe 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.

β€œWith 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. β€œPlus, 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.

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