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Old 23rd December 2014, 15:36   #1
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Default Maruti to become bigger than Suzuki's global operations

Despite the rising competition in the Indian automobile industry, Maruti Suzuki has consistently managed to sustain its market share. Not only that, the company is growing at a healthy rate annually too.

An article by ET Auto mentions that R. C. Bhargava, Chairman, MSIL, boasts how Maruti is on the path to become a bigger company than its own parent company's global operations if it reaches sales of 2 million units. He also mentions that Suzuki's long term growth and future interests depends upon Maruti's growth. The automobile production ratio (as per 2013 reports) at 1.86:1 is more favorable to overseas production than domestic (Japanese) production, with India being Suzuki's biggest operation in the world.

At the moment, Suzuki Motor Corp holds 56.2% stake in Maruti Suzuki India. Maruti and Suzuki have been two of the world's fastest growing brands (year-on-year) in June 2014 - Maruti's sales grew by 27% while its parent company's sales improved by 23.5%.

Suzuki's overseas net sales have increased year-on-year primarily due to India and Europe (as per Suzuki's financial reports for FY2014 second quarter). The Swift hatchback sold 4 million units after 9 years and 9 months of its debut in 2004. India alone accounted for 50% of the global Swift sales while Europe sales were 19% and sales in Japan were 11%.

Recently, MSIL joined the elite club of companies with a market capitalization of Rs. 1 lakh crores. As of today, Maruti Suzuki exports cars from India to more than 125 countries including several European nations.

The company is now eying the lucrative SUV segment, which captures 20% of the passenger vehicle market. It is now aggressively targeting a 50% market share in India, with annual sales targeted at 2 million units. Currently, Maruti enjoys a market share of 47.87% in India.

Last edited by S2!!! : 23rd December 2014 at 15:41.
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Old 23rd December 2014, 16:51   #2
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Default Re: Maruti to become bigger than Suzuki's global operations

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As of today, Maruti Suzuki exports cars from India to more than 125 countries including several European nations.
I don't think Maruti exports to any European nations now. Suzuki's Hungary plant caters to the European demand as far as I know.
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Old 23rd December 2014, 17:43   #3
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Default Re: Maruti to become bigger than Suzuki's global operations

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I don't think Maruti exports to any European nations now. Suzuki's Hungary plant caters to the European demand as far as I know.
Yes, I did read that exports to Europe are now from Thailand and other Suzuki plants while India will focus primarily on emerging markets. The A-Star was the last car to be exported to Europe. However, Maruti Suzuki's website still indicates that it exports cars to many European countries. Having said that, India is once again likely to be the export hub for the YRA premium hatchback to European nations.
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Old 23rd December 2014, 21:09   #4
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Default Re: Maruti to become bigger than Suzuki's global operations

One should really appreciate Maruti's long term strategies and plan to overcome competitions. They definitely had earlier mover advantage but in such situations it is easy to slip. But they kept the heat on the competition and fought well to keep their turf intact. Whenever they were pushed back, they came up with winning products. Hats off to them
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Old 23rd December 2014, 21:26   #5
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Default Re: Maruti to become bigger than Suzuki's global operations

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Having said that, India is once again likely to be the export hub for the YRA premium hatchback to European nations.
That is an interesting development if true. Initial spy shots of YRA seems to have come from foreign soil and I'm not sure what changed for them to prioritize India over Japan and Hungary in the current model.

YRA looks like a Swift replacement (next generation) for the European markets. I still feel the Hungary plant would be used for the same primarily and may be in case they need additional capacity, India might be acting as a hub to cater the extra demand.
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Old 26th December 2014, 10:42   #6
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Default Re: Maruti to become bigger than Suzuki's global operations

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He also mentions that Suzuki's long term growth and future interests depends upon Maruti's growth...with India being Suzuki's biggest operation in the world.
Good article.

If it weren't for Maruti, Suzuki would have been languishing globally. They'd either have been acquired (like Nissan), desperate for a partnership (Isuzu, Mazda etc.) or closed down. Without Maruti, Suzuki would be too small to continue as an independent organisation. Forget Suzuki, even BMW & Honda (much bigger manufacturers globally) keep fighting to remain independent.

India is the only market where Suzuki is so strong. They packed up in the USA & Canada, sell barely 250,000 units a year in China, and continue to lose market share in Europe (currently 150,000 units a year).

Osamu Suzuki's move to partner with the Indian Government in 1982 turned out to be the best decision he ever took!
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Old 26th December 2014, 14:05   #7
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Default Re: Maruti to become bigger than Suzuki's global operations

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India is the only market where Suzuki is so strong. They packed up in the USA & Canada, sell barely 250,000 units a year in China, and continue to lose market share in Europe (currently 150,000 units a year).

Osamu Suzuki's move to partner with the Indian Government in 1982 turned out to be the best decision he ever took!
Even now, we see Suzuki developing a new technology first for JDM or Europe and then tweaking it for India later, instead of developing something that would suit India as well from the beginning. The result is that we get that technology by the time it is already starting to look obsolete in other places.

I'm not sure if Suzuki still gives the respect that Maruti really deserves. If it was Suzuki's technology that helped Maruti attain such a market share, then the same should have been seen elsewhere in Europe/US/China. Certainly, there are things that Maruti has done on their own, without Suzuki's directions which helped them reach where they are now.
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Old 26th December 2014, 17:16   #8
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Default Re: Maruti to become bigger than Suzuki's global operations

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One should really appreciate Maruti's long term strategies and plan to overcome competitions.
Oh yeah! What long term strategy? Pardon my saying this but Duster has invented mini SUV segment in India as far back as 2012. Two years on, Maruti is not even announcing when it will launch Alpha XA. Instead it is busy launching more and more hatchbacks. Estilo bombed, A-Star bombed, so did Stingray and Celerio will soon be on its way out, I'm sure. Imagine if Duster from an unknwon brand like Renault could do this, then had Maruti launched a mini-SUV back in 2012, that car would have been crawling all over the nation by now. But no, they just had to launch more and more dumb looking hatchbacks, as though their present number were not enough. But save Swift, none looks good. Contrast this with Hyundai, which in single swoop transformed their ugly i10s and i20s into Grands and Elites.
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Old 26th December 2014, 18:21   #9
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Default Re: Maruti to become bigger than Suzuki's global operations

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Oh yeah! What long term strategy?
Strange comment this. Maruti has been focussing on the hatchback segment since that is their bread and butter. For all of Duster's success, it is the only selling model from Renault. Them and Nissan have failed massively in their plans for India for all it seems.

Ertiga was launched and is a grand success; Ciaz was launched and it seems to have succeeded at least in the beginning stages. They now have a foothold in the C segment sedans and are a leader in the people mover segment.

The compact SUV will come once the plan/strategy is finalized. Ecosport started off big but has waned big time.

It is not about who does it first but who does it the best. I hope Maruti takes cues from the launched models to come with a winner.

BTW, Hyundai also doesn't have a compact SUV or a MPV in its lineup consisting predominantly of hatches.
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Old 26th December 2014, 18:32   #10
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Default Re: Maruti to become bigger than Suzuki's global operations

@pgsagar:

I am not defending Maruti here. It is true Maruti seems to have missed time to market concepts in many products. You should also give credit to other manufacturers who carve out a segment for themselves to sustain in the market. Duster is one such success.

If you look back it was Tata who had created sub-four meter cars and created a segment. But now Maruti is still ruling that segment with Dzire, which had withstood fierce competition. Most probably Maruti strategy would have been to protect their turf - hatch back segment and they created many products to sustain growth. Sure they paid less attention to other segments and took their own time in brining new products like Ciaz or Alpha XA.

But on the whole their strategy has worked which can be observed by the market share they sustain and top selling cars they have in their portfolio.
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Old 26th December 2014, 22:58   #11
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Default Re: Maruti to become bigger than Suzuki's global operations

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Maruti has been focussing on the hatchback segment since that is their bread and butter. For all of Duster's success, it is the only selling model from Renault.
Exactly my point. If an unknown Renault brand could score so much with a mini-SUV, imagine what Maruti would have done if they had one. Hatchbacks are their bread and butter? Then why are they experimenting with sedans? Baleno failed. SX4 did not do well. And they went on to Ciaz. Right now it may be selling because of novelty but I doubt it can make any big dent. A hundred hatchbacks and 3 sedans ( that is after leaving M1000 and Esteem) and yet not a single mini SUV? Ok. They showcased XA Alpha way back in 2012 itself, even before Duster arrived. What on earth is taking them so long? Even glaciers move faster. If this is how things work at Maruti, then it won't be long before Hyundai zooms past it. Right now, I find nothing exciting in Maruti stable except Swift. It may be scaling new heights as far as nos. are concerned but I wonder if they are at their all time best right now and things will only slide from here.
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Old 26th December 2014, 23:10   #12
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Default Re: Maruti to become bigger than Suzuki's global operations

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Right now, I find nothing exciting in Maruti stable except Swift. It may be scaling new heights as far as nos. are concerned but I wonder if they are at their all time best right now and things will only slide from here.
You do have a point here. Maruti's sales are mostly defined by 4 cars (or 3 if you the Dzire is counted as a Swift) - Alto, Swift, and the Wagon R . Each of these is a sufficiently old model in the market, with the latter two not even having undergone any major design change since inception.

However, to their credit, it isn't like Maruti isn't trying - their recent attempts including Ciaz and AMT (Celerio) alongside the upcoming launches do indicate their awareness of long term growth concerns
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Old 27th December 2014, 01:19   #13
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Default Re: Maruti to become bigger than Suzuki's global operations

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It may be scaling new heights as far as nos. are concerned but I wonder if they are at their all time best right now and things will only slide from here.

I think you are making a mountain out of a molehill. Duster is not a new car. It was already being sold under a different brand in Europe. Whereas the mini SUV is a new car for Suzuki/Maruti. 2 years is not a big time in terms of product's conception.

I know a lot of Auto Manufacturers who would give an arm and leg to have Maruti's portfolio and sales numbers. It is not as easy as it seems it is. To attain #1 position is one, but to continuously stay in it requires effort which is not lacking on Maruti's part.

For all the sounds about Hyundai, they have 5 hatchbacks, 1 sub 4m sedan and one normal sedan before jumping into the million rupee category. Their presence is yet to be there in the people mover segment (Ertiga) nor the one you are accusing Maruti about, mini SUV.

As for things sliding, it has been predicted time and again when new models are launched from other manufacturers. "This will be the car taking the fight to Maruti'.

Other than the Elite i20, no other car has a sniff of the best sellers from Maruti. They know the Indian market better than anyone and they strive to support it unlike a few foreign brands.

If you really want to see a stale Indian manufacturer, please look at Tata/Mahindra. Zest/Bolt may be new, improved models but their Vista DNA is very evident from the side profiles. XUV500 is a good model and they have done well with the Scorpio. But Quanto is a failure, Bolero is a decade old model. I don't think we need to even touch upon the Verito disaster.

Last edited by SchumiFan : 27th December 2014 at 01:25.
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Old 11th May 2015, 18:48   #14
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Default Re: Maruti to become bigger than Suzuki's global operations

Maruti Suzuki contributes to Suzuki's consolidated net sales of this fiscal year (April 2014 to March 2015) increased by 77.2 billion (2.6%) .

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The Japanese domestic net sales decreased by 38.1 billion (3.4%) to 1,094.6 billion year-on-year owing to the decrease in the automobile sales. However, the overseas net sales increased by 115.3 billion (6.4%) to 1,920.9 billion year-on-year mainly owing to the increase in the automobile sales in India.
In terms of the consolidated income, the operating income decreased by 8.3 billion (4.4%) to 179.4 billion year-on-year. Although the decrease in the income in Indonesia and Thailand were covered by the increase in the income in India
Forecast for the Next Fiscal year.
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As for the next fiscal year, although the decrease in the demand of minicars in Japan is expected, the Company forecasts increase in sales and income compared to this fiscal year mainly owing to the increase in the overseas sales including India
http://www.globalsuzuki.com/globalnews/2015/0511a.html
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Old 22nd July 2015, 08:18   #15
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Default Re: Maruti to become bigger than Suzuki's global operations

Maruti is on a roll - Now overtakes Japanese parent Suzuki in market value.
Recently, it ousted Tata Motors as India's most valuable automotive company.

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Maruti Suzuki has achieved a feat no other Indian company with a foreign parent has ever done. The nation's No. 1 automaker has outgrown Suzuki Motor in market value.
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Its stellar operational and financial performance and rosy outlook in a sluggish automobile market have driven Maruti's stock rally. On the other hand, Suzuki had a bumpy ride in recent years with sales weakening in all major markets except Asia.
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For the Japanese company, the brightest spot is the Indian unit, which has turned into its biggest money-spinner, accounting for a quarter of revenue and a chunk of profit.
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Maruti has been given a free hand to develop business in Africa and Latin America by using the existing dealer network of Suzuki. Maruti is now making inroads into those markets, not only by selling small cars but also the bigger ones: it started selling the Ciaz sedan in South Africa.

Suzuki invested in developing a diesel engine to cater to the demand Maruti was facing in India. More importantly, Suzuki's design team has started developing products targeted mainly at the Indian buyer, a major shift from its policy of collaborative development. Utility vehicle Ertiga was the first product designed primarily for the Indian market.
http://auto.economictimes.indiatimes...value/48167731
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