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Old 21st November 2011, 08:03   #1
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Default Competition, Strikes Hitting Maruti Suzuki's Market Share

Times of India, Bangalore has come with an article on that Competition, Strikes hit Maruti's market share.

Maruti's share skids on strikes, competition - The Times of India

The article is posted below
Quote:
NEW DELHI: After enjoying over 50% market share in the country for a long time, Maruti Suzuki now stares at challenging times as frequent strikes and rising competition have weakened its grip on customers. The country's biggest carmaker's market share has dipped significantly in the last two years as newer models from companies like Toyota, Ford and Volkswagen have hit its dominance in the small car market. The company also had to deal with a fall in output due to strikes at its Manesar factory, the hub for the key model Swift hatchback.
Clearly Maruti needs to ensure that their portfolio is current and all their global models are sold in India. For too long they took the Indian customer for granted and short changed us on the global models. India is their largest market by far and apart from A-Star there have been no new global launches from cars built for the Indian market. They should kill the M800, OMNI (both do not meet safety/emission requirements) and also the Estilo. Introduce all their global models here and give India what it deserves.

Competition are all driving in with their global models. Maruti needs to meet India's aspiration that cars sold in India and are also currently sold abroad. When one travels abroad and see the same car, believe me your self esteem goes up. You feel that you too are progressing

Cheers

KPS

Last edited by GTO : 21st November 2011 at 14:27. Reason: Keeping fair usage practices in mind, it's best to only include an excerpt + link to original article
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Old 21st November 2011, 08:19   #2
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Default Re: Competition, Strikes Hitting Maruti Suzuki's Market Share

Ever since Maruti was started, some people always wanted to "kill" it due to personal interests, hence the stikes and other related issues.

Maruti is a balance of price vs performance vs luxury and is made for the common man, hence its destruction is necessary for some others - one man's meat is anothers poison.
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Old 21st November 2011, 08:32   #3
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Default Re: Competition, Strikes Hitting Maruti Suzuki's Market Share

^^ I find that funny considering that Maruti is in existence for some 25 Years + in India, was well protected by government of india ( as a PSU ) using Us tax payers money in a monopolized market for good 15 first years or so and now that same market is open and they are facing competition, you come up with statement like people want to "kill" it. reality is they need to buckle up and face the competition and set their own house in order. Strikes and all are very common in MSIL, has the management wondered why the workers are going on strike at first place. IMO they need to do some soul searching .

As for common Man thing goes, market is filled with such cars which are a perfect blend of so called "price vs performance vs luxury" for common Man. need of the hour for Maruti is to take competition head on. customer has matured now , he wants bang for his buck , gone are times when one has to wait for 3 years to get that phone connection. customer has choices. he has been liberated of license raj in today;s free economy and they must adapt / perform or perish . no third option. IMO they has;t Innovated like others. other than Swift and alto , nothing sells for them and here also they are facing fresh competition from Like of Hyundai and Others. they need to innovate . Here also, swift is selling B,cause of Diesel Heart and good economy. they still don;t have their Own Diesel engines. till how far can they live on borrowed engines is anybody;s guess..

Last edited by .sushilkumar : 21st November 2011 at 08:41.
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Old 21st November 2011, 08:59   #4
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Default Re: Competition, Strikes Hitting Maruti Suzuki's Market Share

1) Bringing in International models is a bit tough. Would we love paying higher cost for the same ? Also, lets agree ( only upto some extent ) that Suzuki is a bit small company which is not having many products which they can bring in India. In Japan they have Kei cars, Wagon R ,Alto are such products. Lets say a CKD or high local content Kizashi priced lower, but still would we pay for Maruti brand the way we do for Honda and Toyota ?

At the same, cars like APV should have been here since long. Suzuki is playing it too safe here and eventually paid the price.

2) Strikes. Since long this has been issue. Remember when Alto was launched in LX and VX versions ? There was a strike too. I wonder who is responsible for this, but overall the pay grade in Maruti are not that bad.
The most difficult to digest thing is the repetitive strikes. Its called off and then again in a very short span of time Strike is again there.

3) To the best of my knowledge, M800 is coming in new avatar, Ertiga is coming soon and so is the new Dzire. Maruti is having its hands pretty full. What Maruti missed out is Jimmy, and bigger diesel units.

4) Suzuki is not that big a company, and is still not able to develop its own diesel engine line up. That is the biggest weakness they have globally now where the diesel is sure to go up ( mainly in Asia and EU ). We have to accept that the size of company is small and is not heavily ( or was not heavily ) backed by Government, unlike Hyundai which had a lot of government support.

Re-orientation towards new engine lineup, higher overall quality can help Suzuki in longer run.

Last edited by aaggoswami : 21st November 2011 at 09:03.
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Old 21st November 2011, 10:15   #5
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Default Re: Competition, Strikes Hitting Maruti Suzuki's Market Share

Thanks to the monopoly Maruti enjoyed for almost 2 decades, (almost) everything they made turned into gold - 800, Zen, Omni, Esteem, Gypsy are all examples of how these products became a part of the classic Indian family.

And this gave them the liberty to make cars of whatever shape, quality and with whatever features they so thought and yet they were huge hits.

Now that the market is so much mature and there's competition for every segment and every car, Maruti is feeling the heat for want of a best-seller. There's Eon for 800/Alto, i10, Brio for Zen etc.

It's about time Maruti stopped resting on it's laurels and gave the market something that's worthy.

Don't know about strikes but if Maruti doesn't delivering world class cars, competition will surely dethrone it real soon. They've got cheap spares and an unbeatable network of A.S.S. as their main advantages and it won't take long for the competition to work on theirs.
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Old 21st November 2011, 11:08   #6
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Default Re: Competition, Strikes Hitting Maruti Suzuki's Market Share

Quote:
Originally Posted by aaggoswami View Post
...unlike Hyundai which had a lot of government support.
I know this is a bit OT, but could you elaborate on the above statement.

Do you meant to say that Hyundai is supported by the Indian govt or the Korean govt ?

I am asking just out of curiosity, don't mean to pick on anything you wrote.

Rohan
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Old 21st November 2011, 11:15   #7
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Default Re: Competition, Strikes Hitting Maruti Suzuki's Market Share

Quote:
Originally Posted by rohan_iitr View Post
I know this is a bit OT, but could you elaborate on the above statement.

Do you meant to say that Hyundai is supported by the Indian govt or the Korean govt ?

I am asking just out of curiosity, don't mean to pick on anything you wrote.

Rohan
he could be referring to parent country of Hyundai ( korea ) Indian govt do not give any support to any manufacturer now nor do they hold any equity anywhere except for MSIL .
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Old 21st November 2011, 12:06   #8
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Default Re: Competition, Strikes Hitting Maruti Suzuki's Market Share

I guess this is OK and quite fine. Why would we as Indian's even want a single foreign manufacturer in India to have 50 or even 40% market share. I believe a max of 30% for the largest manfacturer is good for us.

Do remember that this is Suzuki from Japan not TATA, M&M or Bajaj from India. Govt has given up most of it's stake in the company. It is as Indian as say Hyundai from Korea. It is listed in India but that is about it.

Even 40% market share implies an imbalanced compeition within India, and from the point of view of our own good it is ideal that we have multiple brands beyond 10% market share and yet few or just 1 or 2 beyound 20%. If even 2 brands have 25% share each then half the market is taken up and that is not an Ideal situation from the long term point of view. With newer and better vehicles being introduced by the competition the Indian consumer is only served better and better.

Yes Suzuki employees a lot of Indian's in the India plant but then so do Hyundai and VW and GM and Ford to lets move on over this fixation.

That said just as Hyundai, Samsung and LG to some extent reflect the dominance of Korea in the global market and it's coming to age I would wish that M&M, TATA and Bajaj and Hero take India Global and do well in it's own home market.

Suzuki actually is after Toyota, Honda, Nissan & Mitubishi even it's home market so it should not be too much of a surprise to seem them loose share in India as better options become available. I believe for Suzuki India is a very important part of Suzuki global sales (possibly close to half) and that should have been enough motivation for Suzuki to get ALL their latest models into India rather than have us manage with 3 generations of the same cars at the same time.
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Old 21st November 2011, 17:19   #9
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Default Re: Competition, Strikes Hitting Maruti Suzuki's Market Share

I remember one had to pay premium to buy a Suzuki that too 800 when it was launched, the days of black marketing is thankfully gone. Even till last year Suzuki was continuing with queues for Wagon R, Swift, Ritz and Eecho that is before the strike began. If they had enhanced capacity probably they could have maintained their market share.

After the strike and petrol price increase the situation drastically changed, there is a marked preference for diesel cars and Suzuki is finding itself stumped by the change of scenario. The only advantage that Suzuki currently enjoys is that it has the largest service network for cars and spares are reasonably priced. Tatas and Hyundai are fast catching up and nibbling at their market share.
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Old 21st November 2011, 17:35   #10
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Default Re: Competition, Strikes Hitting Maruti Suzuki's Market Share

Agreed they are not the largest car manufacturing company in the world right now, but if I am not mistaken, they are considerably larger than TATA! So if TATA can produce their own engines [both petrol and diesel] with hardly 12-13 years of experience, what stops suzuki from doing so? So you can rule out size being a reason for Suzuki not coming out with a diesel. You ask me, and I'd say its arrogance. Same for Honda. Just because it feels it doesn't "feel" like manufacturing diesel engines doesn't mean the market is going to agree.

As for Maruti being value for money, we own a swift and although we are satisfied with the overall package, we are reminded often "you get what you paid for". The black colour requires polishing every 3-4 months or else it turns grey. The car has started to rust in just a little of 3 years. This surprises me a our previous car, a TATA Indica non-turbo version, hardly a 5 year old product had absolutely no rust on it when it sold off after being with us for more than for 4 years.
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Old 22nd November 2011, 07:55   #11
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Default Re: Competition, Strikes Hitting Maruti Suzuki's Market Share

Here is the link of the Suzuki Global Sales in 2010 as released by SMC

Suzuki Media - Auto - SUZUKI REPORTS INCREASE IN 2010 GLOBAL AUTOMOBILE SALES VOLUME FIGURES

Clearly India is their largest market by far. Surely they should have invested more to bring out contemporary models. We have been witnessing that car models are normally refreshed after 4-5 years and a new platform comes in 8-9 years. Maruti has never followed the same. Luckily for us the emission and safety norms have forced some of their products out

Since they kept dishing out outdated models are low prices, I feel Maruti has lost it ability to price their products at the higher range like what Hyundai has been successfully able to do. Products like Baleno, Versa, Vitara and now Kizashi which were priced as premium cars all have not take off to achieve sustainable numbers. Even the SX4 has had quite a struggle as people expected this to be a replacement for Esteem/Baleno and thus the price range expectations were much lower.

Cheers

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Old 22nd November 2011, 19:02   #12
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Default Re: Competition, Strikes Hitting Maruti Suzuki's Market Share

Guys, lets cut Maruti some slack and not pay undue attention to this "sensational" article. Yes, Maruti's marketshare is hit, but the primary reason is the labour trouble it is currently experiencing. There is no dearth of demand for its cars, amply evidenced by the 100,000 bookings of the new Swift, or the several month long waiting period for the Dzire. The Ritz is also doing better than before, touching 7000 units in some months, and the WagonR sold over 13,000 in September alone.

Let the labour troubles be sorted once and for all, and we'll see Maruti bounce back. I do think that the company's best days are still ahead of it. So many more segments just waiting to be tapped (diesel Alto, new Maruti 800, a diesel UV etc.).

Quote:
Originally Posted by .sushilkumar View Post
using Us tax payers money
Maruti has been profitable since the early days. Thus, as a part-owner, the Government received splendid returns on their investment in Maruti. Talk of tax payer's money when its going down the tubes in loss-making organisations. Over the last 25 years, Maruti has paid more tax, invested more and hired more people of this country than any other car company.
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Old 22nd November 2011, 19:29   #13
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Default Re: Competition, Strikes Hitting Maruti Suzuki's Market Share

Quote:
Originally Posted by GTO View Post
Guys, lets cut Maruti some slack and not pay undue attention to this "sensational" article. Yes, Maruti's marketshare is hit, but the primary reason is the labour trouble it is currently experiencing. There is no dearth of demand for its cars, amply evidenced by the 100,000 bookings of the new Swift, or the several month long waiting period for the Dzire. The Ritz is also doing better than before, touching 7000 units in some months, and the WagonR sold over 13,000 in September alone.

Let the labour troubles be sorted once and for all, and we'll see Maruti bounce back. I do think that the company's best days are still ahead of it. So many more segments just waiting to be tapped (diesel Alto, new Maruti 800, a diesel UV etc.).
I didn't find that article anywhere sensational & anyways Maruti is not Bollywood actress that they can get more circulation by sensationalizing it , nobody is interested in their sale no;s anyways other than Us and trade analysts who get paid for analyzing them .

As for labour trouble goes, I see it happening Again in near future . call me sadist but the way they have settles with union leader like Sonu ( By paying money ) i see more Sonu;s growing up and creating labor unrest .

they might launch Diesel Alto & All but at what price. After negotiating with others for diesel engines . what If others do not agree ? . Why they are not developing their Own engine ? . economics is in their favor already .

Quote:
Originally Posted by GTO View Post
Maruti has been profitable since the early days. Thus, as a part-owner, the Government received splendid returns on their investment in Maruti. Talk of tax payer's money when its going down the tubes in loss-making organisations. Over the last 25 years, Maruti has paid more tax, invested more and hired more people of this country than any other car company.
Well , Maruti hasn;t done any favor . Initial Investment by Suzuki was just 26 % , to top it they were provided excise benefits / land on very low rates. govt has nursed it with tax payers money to be where it is today . they only increased equity to 40 % in 1987 and to 50 % in 1992. it;s high time now that we get over this mentality( In bold Above )that they have done us a favor by hiring people and generating employment. it;s a give and take and most probably they are surviving today in japan purely on the basis of their Indian operations, which contribute northward of 50 % of their global revenue IMO .

In return what they have given to Us other than hiring people and setting up few local industries , that too to benefit their own operations . they has;t been able to give us one indigenous research and development center till date ( they are setting up now ) . they have deliberately kept that in japan so that they can pay royalties to them . compare that to any other indian manufacturer ( Tata / Mahindra ) and still is their so called sacrifice for us poor indian justified anywhere ?
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Old 22nd November 2011, 19:48   #14
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Default Re: Competition, Strikes Hitting Maruti Suzuki's Market Share

Well this was bound to be published soon, what with all the labor strikes which made for good articles in the earlier months,now gone, they've reported about falling market share.

The fall in market share is MAINLY due to the strike, Maruti has been doing rather well in the segment where competitors' cars are mentioned. Swift leads the segment by a huge margin.

Plus, this was expected to happen with more competition, a few years back say 2005 when the Swift was launched there were very few cars competing with it than as of 2011. A few customers are bound to go to other brands, and hence Maruti lost market share.

The competition has only done good to the end-customer thus far. Let's hope the competition keeps MSIL on its toes and we get better products in the market.
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Old 22nd November 2011, 23:46   #15
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Default Re: Competition, Strikes Hitting Maruti Suzuki's Market Share

If i remember correctly from a news channel 88% of maruti bookings are for diesel (where option is for petrol and diesel i.e in Swift , Dezire ,SX4) .Wonder what will maruti do if Fiat pulled out for Engines.
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