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Old 18th January 2014, 15:23   #16
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Default Re: Business Today: How Maruti bounced back after the 2012 labour strife

Maruti looks unbeatable as of date. It's quite an accomplishment to sell the most cars, and still have the highest customer satisfaction rankings.

The quality of their cars has also noticeably improved (e.g. old vs new Swift). Their petrol engine - the K12 - is an absolute jewel; fast, efficient, revv-happy and driveable.

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Originally Posted by saket77 View Post
Maruti definitely has the early mover advantage in India but one cannot deny that they have never been complacent regarding their top position in market share.
Now, this is where I disagree. While Maruti has done a lot of things right, they have definitely portrayed complacency.

- The Ertiga was phenomenally designed & positioned. But, except for the Ertiga, Maruti has stuck to the traditional hatchback & sedan bodystyles.

- Where is their compact SUV, a segment that is absolutely bursting at its seams?

- It's surprising that a company selling 30,000 - 40,000 diesel cars a month (that is more than the total production of the no.2 player, Hyundai) and 100,000 cars overall still runs on a "borrowed" diesel engine. C'mon, after all these years and the mammoth revenue numbers, are you trying to tell me Maruti couldn't make one or two 4-cylinder diesels?

- Due to poor products, planning or both, success in the 10+ lakh segments remains elusive to Maruti. The Grand Vitara was too cheap, small & lacked a diesel engine. The Kizashi was over-priced and again, lacked a diesel engine. Maruti has had one failure after another here. And don't for a moment think Maruti doesn't care about the 10+ lakh categories. It's important to keep customers (upgrading) within the family, the money isn't too bad (400 Elantras a month = 700 crore in revenue a year) and there's a massive advantage in terms of branding.

- Absolutely no innovation, despite holding 40% of the market!!! No direct-injection turbo-petrols, no quick dual-clutch gearboxes and nothing really new in terms of features. After decades, the single time I heard of Maruti doing something "different" is the recent AMT development.

- Cheap Diesel automatic? This is hugely untapped demand, and the cheapest diesel automatic you can buy in India is the Verna AT. Imagine the potential of a Swift 1.3L AT? Dzire diesel AT? Mr. Pareek says every drop counts. I'm pretty sure the Swift, Dzire & Ertiga diesel ATs can bring in another 1,000 - 2,000 monthly sales (at the minimum).
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Old 18th January 2014, 15:45   #17
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Default Re: Business Today: How Maruti bounced back after the 2012 labour strife

There is no doubt that Maruti has been not innovative. It has done everything but groundbreaking. This is especially true because it is the company best placed to do something innovative.

I admire Maruti the way it has built its repute over years, be it their cars or excellent after sales, but I am also most vocal against a few things that Maruti could have done for the Indian automotive scenario. First, since they have been ruling the roost and the industry; they should have lead it more responsibly too, rather than just being another car-seller. They could have produced safer cars, with proper safety equipment in place. That would have polished the image of Maruti and it would have earned a lot of respect from the critics too. They could have offered things what no body in the competition can afford to offer.

For eg. a base model with an option of airbags+abs. As of now, to get all the safety features, in most cars, one has to opt for the topmost model which is out of reach of many. But there are people who could afford a base version and at the same time want to travel in safer cars. There are people who still prefer airbags over power windows. Hence, such a model would have made sense. And again, more than sense, it would put Maruti under the light of being a responsible manufacturer leading the industry by an example. Maruti has failed in this area. Even I remember, MPFI technology was bedded in Maruti cars only after when rival cars like Daewoo Matiz started threatening the manufacturer by carrying fuel injection technology under their hood.

All the points that Rush has written above are absolutely true, but probably that is the 'Maruti philosophy' to sell vehicles - catering to mass market and this is where most of the money to Maruti has come in the past. The near future looks solid too, but you never know when the tide changes, if Maruti chooses to remain wary of the above.

Regards,
Saket

Last edited by saket77 : 18th January 2014 at 15:52.
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Old 19th January 2014, 19:10   #18
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Default Re: Business Today: How Maruti bounced back after the 2012 labour strife

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Originally Posted by GTO View Post
Now, this is where I disagree. While Maruti has done a lot of things right, they have definitely portrayed complacency.
The points put down by you are bang on and that's a major contributor for their success in sales and customer satisfaction. I mean, they just do the routine tried and tested stuff. Playing extremely safe.

Almost nothing coming out of their R&D and lesser said about the capabilities and design flair of their in-house design team.

If you look deeper, Maruti-Suzuki is the most successful Car Assembler in India. There's nothing wrong in it. But they gotta be doing much much more to be called a great Car Maker.

For the kind of volumes and money Maruti-Suzuki India generated, are they in a position to call themselves to be forerunners in anything for Suzuki globally?
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Old 19th January 2014, 19:59   #19
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Default Re: Business Today: How Maruti bounced back after the 2012 labour strife

If Suzuki hadn't entered India at that time, I bet it would have stopped making cars long back. India is definitely the only country where you can see sales at a consistent high. Is there any country where suzuki is doing so well? I don't think so. Correct me is there is. Hence, it is definitely not doing justice to our market. As GTO pointed out, they have a very conservative approach towards bringing in new tech. Upon that we get cars stripped of features and safety kits. At least due to the effect of the aggressive competition, I just hope they improve. If maruti get agressive on technology and design, I bet they can wipe any competition out. However if they still try to sell by the brand name, it wont be long until their legacy ends here too. Hyundai has also started entering the rural markets. So is Tata(thats another case but) and I think hyundai can gain more market share in sometime if not other manufacturers.
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Old 19th January 2014, 20:36   #20
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Default Re: Business Today: How Maruti bounced back after the 2012 labour strife

I am ecstatic to see Maruti perform so well in our country. This shows the amazing potential the market has, and how well good service and products can reward you. Being one of the fastest growing markets, companies can either make or break. With their excellent dealer network, extremely positive attitude and history and an even better product lineup, Maruti carved the road to the top.

Despite being one of the best companies in the world, VW and Toyota haven't even managed to go into double digit percentages where Maruti holds close to 50% of the share. This shows how hard it is to break into our Automobile sector and how trust and reputation hold a very important role in the success of a company. Kudos to Maruti for getting India on 4 wheels, and I hope they continue to grow and even touch 50+% of our Market's share.

I hope that VW understand the importance of transparency and product adaptation in such a demanding market. Even the Swift can be bought in Europe, but it doesn't break down because of the climatic conditions. VW needs to remember that the Indian market is the only way for them to get on top of the ladder, and neglecting it, unlike Toyota, will definitely make them slip.

Quote:
Originally Posted by saket77 View Post
There is no doubt that Maruti has been not innovative. It has done everything but groundbreaking. This is especially true because it is the company best placed to do something innovative.

I admire Maruti the way it has built its repute over years, be it their cars or excellent after sales, but I am also most vocal against a few things that Maruti could have done for the Indian automotive scenario. First, since they have been ruling the roost and the industry; they should have lead it more responsibly too, rather than just being another car-seller. They could have produced safer cars, with proper safety equipment in place. That would have polished the image of Maruti and it would have earned a lot of respect from the critics too. They could have offered things what no body in the competition can afford to offer.

For eg. a base model with an option of airbags+abs. As of now, to get all the safety features, in most cars, one has to opt for the topmost model which is out of reach of many. But there are people who could afford a base version and at the same time want to travel in safer cars. There are people who still prefer airbags over power windows. Hence, such a model would have made sense. And again, more than sense, it would put Maruti under the light of being a responsible manufacturer leading the industry by an example. Maruti has failed in this area. Even I remember, MPFI technology was bedded in Maruti cars only after when rival cars like Daewoo Matiz started threatening the manufacturer by carrying fuel injection technology under their hood.

All the points that Rush has written above are absolutely true, but probably that is the 'Maruti philosophy' to sell vehicles - catering to mass market and this is where most of the money to Maruti has come in the past. The near future looks solid too, but you never know when the tide changes, if Maruti chooses to remain wary of the above.

Regards,
Saket
The fact still remains that Suzuki vehicles still score very high in Euro-Ncap tests. The Swift for instance scores a full five in the test, and so does the Dzire.
To my surprise, the Laura that was selling last month just scored a 4 star rating
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Old 19th January 2014, 21:28   #21
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Default Re: Business Today: How Maruti bounced back after the 2012 labour strife

The punch line of the corporate advertisement of Maruti Suzuki says it all " India comes home in Maruti Suzuki". They will hold on to the tag of market leader for years to come. Ever since the inception of the company, it has maintained its leadership position in the Indian market. It has ensured that any product they launch remains in the market and sustain its position. The company still retains the tag of being the most affordable car manufacturer in the Indian market. It also offers value for money proposition.

MS has been slow in adding features and product upgrades. Their initial product upgrades were mere cosmetic changes. They have now realised that a product upgrade means adding new features and new designing. This helps them in creating market excitement.

With all new launches lined up in the coming months they are going to give tough time to the competitors.
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Old 20th January 2014, 00:50   #22
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Default Re: Business Today: How Maruti bounced back after the 2012 labour strife

However, though they are realising that they should pack in more features, the prices are going a bit overboard. A good example for that is the stingray. They added too less of equipment and had too much of an increase in price. And the result is that the car bombed. A person from MSIL told that the stingray was brought to counter the grand i10 Honestly there is no comparison between the two. I dont think its selling really well. For the same price I would have expected something more than projector headlamps and some touches to interior and exterior. Hence now whatever features they may give, the prices shouldn't be increased by a considerable amount. Sacrificing profit margins won't affect their overall profits since number of sales will be high
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Old 20th January 2014, 11:26   #23
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Default Re: Business Today: How Maruti bounced back after the 2012 labour strife

Quote:
Originally Posted by GTO View Post
Now, this is where I disagree. While Maruti has done a lot of things right, they have definitely portrayed complacency.

- It's surprising that a company selling 30,000 - 40,000 diesel cars a month (that is more than the total production of the no.2 player, Hyundai) and 100,000 cars overall still runs on a "borrowed" diesel engine. C'mon, after all these years and the mammoth revenue numbers, are you trying to tell me Maruti couldn't make one or two 4-cylinder diesels?
Here i guess Maruti has approach "Why fix something if it isn't broken". Maruti is very successful today and we can't deny fact that it has huge contribution from this one engine. So Maruti must be very cautious here, rightly so. They knows that lots of their numbers (volume & profit) are dependent on this engine alone. So why change that? Also we have to appreciate Maruti about tuning of this engine. They have tuned it the best way. Tata, Fiat also has the same engine, but it feels way better in Maruti cars. I have personally experienced this. So in my opinion, if Maruti is getting success with this engine and want to continue with it, nothing wrong in it. In fact i will be happy if they continue with this engine.

There is old saying, "Their is no harm in taking good things from others, even if he is your Enemy". Here in this case its just a business, pure business, so why not? Also important to note that customers are happy with it, they are not complaining. There are still many people in this country who don't know that its a borrowed engine and not from Maruti

At the end of the day, if Maruti is earning crores of Rupees with that, i guess its fine, no harm in it
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Old 20th January 2014, 17:08   #24
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Default Re: Business Today: How Maruti bounced back after the 2012 labour strife

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There is old saying, "Their is no harm in taking good things from others, even if he is your Enemy". Here in this case its just a business, pure business, so why not?
In fact, I am still worried what show the Maruti-bred diesel engines will do. No harm in borrowing an engine and reaping profits, but if their own diesel engines fail to impress, their sales will be bombed for sure. The swift cant get the three cylinder 1.2l engine nor can a WagonR get a cylinder less than the swift If that happens I bet not many will like the dip in refinement and performance.
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Old 20th January 2014, 17:13   #25
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Default Re: Business Today: How Maruti bounced back after the 2012 labour strife

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In fact, I am still worried what show the Maruti-bred diesel engines will do. No harm in borrowing an engine and reaping profits, but if their own diesel engines fail to impress, their sales will be bombed for sure. The swift cant get the three cylinder 1.2l engine nor can a WagonR get a cylinder less than the swift If that happens I bet not many will like the dip in refinement and performance.
Yes, you are right. But MUL is very clever. They will not put their engine in all their cars from day 1. They will surely put it in one car first & see the response. If response is positive then only they will put same in other cars. Specially with cars like Swift / DZire, they will not try new engine first. They will test it in other car & then only will go ahead with other cars one by one IMHO. MUL has vast experience in India & they will play very safe. They will not discard Multijet engine at one go.
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Old 13th February 2014, 13:12   #26
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Default Re: Business Today: How Maruti bounced back after the 2012 labour strife

Another reason for a resurgent Maruti Suzuki in India is strong presence in rural India, where Maruti is synonymous with motor car these days. In fact 5 years ago the company sold 60k units in rural India, which increased to 280k units in 2013. Thereby the share of the rural market in company's annual sales increased from 3.5% to 31% over last 5 years.

More details here:

http://timesofindia.indiatimes.com/b...w/30315161.cms

I would say this is excellent on the part of the company to correctly identify target growth market & reaping fruits of the marketing effort.
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Old 13th February 2014, 19:49   #27
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Default Re: Business Today: How Maruti bounced back after the 2012 labour strife

I was casually checking the revenues of Suzuki. Its about $27 Billion USD. And the revenue of Maruti Suzuki is about $7.8 billion . Now here is a subsidiary that only sells in the Indian subcontinent contributing a healthy ~30% to its parent (which sells its product all over the globe). The article shared is an excellent read on how process and efficiency driven the company is. I have always owned a Maruti since bought my first car 8 years go. In all probablity, my next car would also be a Maruti, Simply because, everything is hassle free here.

Maruti has seen competitors from all over the globe for decades but never lost its ground.Till today, no one, not a single company has been able to take the bull by its horns. Maruti's service level is unparalleled. Its amazing to wonder how they have been able to implement a uniform code of conduct across the entire (massive) dealer network. Anywhere you go, you get the same excellent level of service.

They have generated immense goodwill. But are they using it responsibly? Now thats the flip side of the coin. I still have to pay for climate control, audio system and all the jazz which I may or may not want ,if I need a pair of airbags and ABS, because its only available on Zxi. Maruti may be an highly efficient and reputed company, but in my books its not a 'responsible' organization, at least not yet. They should use their muscle to be a pioneer in safety and technology. Imagine they start selling the safety package as an option in every variant of Swift. Within a month, every other competitor would be literally forced to follow suit.
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Old 13th February 2014, 23:02   #28
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Default Re: Business Today: How Maruti bounced back after the 2012 labour strife

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They should use their muscle to be a pioneer in safety and technology. Imagine they start selling the safety package as an option in every variant of Swift. Within a month, every other competitor would be literally forced to follow suit.
Maruti Suzuki has a car from 2L to 13L price bracket which satisfies every customer who enters the showroom and none go out disappointed. This the best part that I like of the company. I agree that the safety is lacking but the mass market doesn't respond well to the safety features here.

The Swift should be fully loaded with safety features in the L & V variant with no choice given to the customer. Choices like intermittent wipers, ACC, Tachometer, Alloy wheels can be skimped for the safety features to keep the costs down.

Anurag.
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Old 22nd July 2015, 18:28   #29
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Default Re: Business Today: How Maruti bounced back after the 2012 labour strife

Just happened to see this on TOI, Maruti Overtakes parent Suzuki in market value!!:

http://timesofindia.indiatimes.com/b...w/48170950.cms
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