PREFACE
Project work is one of the most important activities of Professional curriculum at every level irrespective of degree or diploma. This provides us an opportunity to apply our knowledge, skills and aptitude in real life. It also provides an opportunity to work in a group and share responsibilities.
The purpose of practical training for management students is to keep them understands the management of working organization in all it’s aspects especially in the area specialization. It also helps them to broaden their horizon and in efficiency grasping the intricacies in good stand when they are actually in management position in an organization . It also intends to integrate the theoretical concept with the practical working of an organization.
The project should include relative information and details of the market so that it is easy to draw inference from it about the current market situation . Proper execution of plans and projects are responsible for the economic growth of the country
1 CONTENTS
Sl. No. Titles I Chapter 1- Introduction
. Objective
. Research Methodology
. Significance of the Topic
. Limitation
. Conclusion II Chapter 2 – Conceptual Frame Works
. Whole Study of the Topic III Chapter 3 – Significance & Relevance
. Whole Study significance & relevance IV Chapter 4 – Review of Literature V Critical Analysis of the Study VI Scope of the further Study VII Conclusion VIII Bibliography
2 INTRODUCTION
OVERVIEW OF INDIAN AUTOMOTIVE INDUSTRY
The automobile industry has changed the way people live and work. The earliest of modern cars was manufactured in the year 1895. Shortly the first appearance of the car followed in India. As the century truned, three cars were imported in Mumbai (India). Within decade there were total of 1025 cars in the city.
3 The dawn of automobile actually goes back to 4000 years when the first wheel was used for transportation in India. In the begining of 15th century Portuguese arrived in China and the interaction of the two cultures led to a variety of new technologies, including the creation of a wheel that turned under its own power. By
1600s small steam-powered engine models was developed, but it took another century before a full-sized engine-powered vehicle was created.
The actual horseless carriage was introduced in the year 1893 by brothers
Charles and Frank Duryea. It was the first internal-combustion motor car of America, and it was followed by Henry Ford's first experimental car that same year.
One of the highest-rated early luxury automobiles was the 1909 Rolls-Royce
Silver Ghost that featured a quiet 6-cylinder engine, leather interior, folding windscreens and hood, and an aluminum body. It was usually driven by chauffeurs and emphasis was on comfort and style rather than speed.
During the 1920s, the cars exhibited design refinements such as balloon tires, pressed-steel wheels, and four-wheel brakes. Graham Paige DC Phaeton of 1929 featured an 8-cylinder engine and an aluminum body.
The 1937 Pontiac De Luxe sedan had roomy interior and rear-hinged back door that suited more to the needs of families. In 1930s, vehicles were less boxy and more streamlined than their predecessors. The 1940s saw features like automatic transmission, sealed-beam headlights, and tubeless tires.
The year 1957 brought powerful high-performance cars such as Mercedes-
Benz 300SL. This was the Indian automobile history, and today modern cars are generally light, aerodynamically shaped, and compact.
CAR MANUFACTURERS IN INDIA
4 The reason behind the immense growth of the India Car Industry can be attributed to the availability of car loans, affordable rates of interest, smooth repayment facilities and the deductions offered to the customers by the retailers.
The constant changes in the existing car models with regard to design, innovation, technology, and colors, have led to a fiercely competitive market. Now that technology and innovation are not alien concepts for Indian car makers, Indian cars are becoming increasingly sleek, stylish, and luxurious.
Major players in the Indian Car Industry:
Fierce competition among the major car players can be witnessed in the Indian
Car industry. The India car industry is being dominated by the following major players:
• HINDUSTAN MOTORS
• MARUTI UDYOG
• REVA ELECTRIC CAR CO
• DAIMLER CHRYSLER INDIA PRIVATE LTD
• FIAT INDIA PRIVATE LTD
• FORD INDIA LTD
• GENERAL MOTORS INDIA
• HONDA SIEL CARS INDIA LTD
• HYUNDAI MOTORS INDIA LTD
• TOYOTA KIRLOSKAR MOTOR LTD
• SKODA AUTO INDIA PRIVATE LTD
• AUDI AG
• BMW
5 • CHEVROLET
• FORCE MOTORS
• NISSAN MOTOR CO. LTD
• PORSCHE
• ROLLS-ROYCE MOTOR
• CAR COMPANIES IN INDIA
CAR SEGMENTATION
With the expansion of Indian Automotive market over a period of time the segmentation of car models came in to existence based on cars defining characteristics namely:
• Size
• Performance
• Price
However with continuing growth of market SIAM ( Society of Indian
Automotive Manufacturers) implemented the segmentation of cars on the basis of length of the cars.
6 CHANGES IN CAR INDUSTRY IN INDIA
The latest developments in the car market in India:
In Agra, a car manufacture plant has been established as a result of a joint venture of Renault and Mahindra & Mahindra to manufacture a comparatively cheap cars (at US$ 9,700), mainly targeting the Indian middle classes, the youth, and the affluent classes in rural India. Tata Motors has plans to launch a luxury car with an engine of 33 horsepower. The recent reduction in the excise duty of the small cars from 24% to 16% will definitely prove to be a boon for the India car industry.
Technical advancements in the Indian Car Industry:
The latest technical advancements in the car market in India include the following features
• Power Steering
• Radial Tires
• Anti-lock Breaking Systems
• Tip-tronic Transmission
The varied car markets in India:
The market for small cars now occupies a substantial share of 70% out of the annual production of 1 million cars in India. Maruti Udyog, with its legendary Maruti
-800 is the leader in the small car market. A number of manufacturing plants are coming up for advancements in the field of small cars. The recent launches in the small car market in India are:
• Getz Prime by Hyundai Motor Co.
• Tata Magic by Tata Motors Tata Magic
7 • Palio Stile byFiat India Pvt. Ltd
Mid-sized cars are normally cars ranging from Rs. 3-8 lakh and generally meant to be 4 seaters. The mid-sized car section has recently moved beyond the 1 lakh target. The recent launches in the mid-size car market in India are:
• 1.4 SXI Duratorq by Ford Motor Co.
• Indigo XL by Tata Motors
Luxury cars and premium cars are quite expensive and they are purchased for their design, innovation, and technology. They are usually priced over Rs. 20 lakh and have many takers in India. The recent launches in the premium car market in India and the luxury car market in India are:
• Sonata Embera H-Matic by Hyundai Motor Co.
• Nissan Teana by Nissan Motor Co. Ltd
Sports Utility Vehicles (SUVs) have also become very popular in India as they are considered advantageous due to their ability to accommodate more passengers.
They are ideal for trips with the whole family. The Sport Utility Vehicle market in
India is the most booming market in India presently and SUVs have become the fastest selling cars of India.
8 OBJECTIVE OF THE STUDY
• To get overview of sales scenario of the automobile industry
• To know how much customers are satisfied with the services provided to them
by Hyundai and Maruti Bareilly.
• To give suggestions for improvements on the points where they are lacking on
the basis of feedback from the customer.
These objectives were achieved by following a well thought out plan and defining the problem for each objectives separately.
9 RESEARCH METHODOLY
Research methodology is a way to systematically solve the research objective. It may be understood as a science of studying how research is done scientifically.
In it we study the various steps that are generally adopted by researcher in studying his research objective along with logic behind it. It is necessary for the researcher to know not only the research methods/ techniques but also the methodology. Researcher not only need to know how to apply particular research technique, but also need to know which of these methods or techniques are relevant and which are not and what would they mean and indicate and why. All this means that it is necessary for the researcher to design his methodology for his objective under study as the same may differ objective to objective.
Thus when we talk of research methodology we not only talk of the research method but also consider the logic behind the methods we use in the context of a research study and explain why we are using a particular method or techniques and so that research results are capable of being evaluated.
10 SOURCES OF DATA COLLECTION
Data collection methods are credible with validated surveys and/or other methods are clearly described such as observational strategies, the data or information is current.
The data collection is focused on a limited sample of population and has minimal application in terms of generalizing the findings.
• Primary Data: It can be collected directly or indirectly. It was done through a
well structured and designed questionnaire which contain 16 number of
questions which were asked directly to the customers of Sachin Hyundai
Bareilly showroom and Koral Motars.
• Secondary Data: It refers to data which have been collected and analyzed by
someone else. It consists of internet and books etc. Secondary data has also
been collected through the Hyundai Sales training handout.
• Sample Size: A sample size of 40 respondents was taken to conduct the study
of Questionnaire
Statement of the Problem
Today’s customers are an important element in every business so to retain a customer and make the loyal company is a great challenge.
This is what made me to take up this project on “A STUDY
ON SALES PROMOTION OF MAHINDRA & MAHINDRA AND
MARUTI”.
Purpose of the Study
11 The purpose of the study on customer satisfaction regarding after sales services and to know any suggestions to improve the
Atmaram automobiles service centre, Agra.
Scope of the Study
In this competitive world retaining the customers has become important part and parcel of the business activity, since in these arena the people who adopt to changes and new technologies will survive.
This study will help to understand customer need, preference and what they require from the service station and this study will not only help me as a student but it will also the Atmaram automobiles to improve its service standard.
LIMITATION OF THE STUDY
The educational & awareness level of the respondents with
respect to the questionnaires is low. Hence they respond one
question in affirmative, but same interrelated question has
been responded in negative.
12 The sample – plan is too small to give the research a wide
coverage with reference to their opinion.
Sample – plan is Agra specific. Hence it may show imbalances
of urban elite perceptions.
The respondent include those people who has car (but not a
specifically a B Segments car) and hence, their opinion could
be based with the lower income group.
The respondents are not interested to reveal their income
level. Causing a hurdle in finding out the price as a buying
decision.
CONCLUSION
According to my survey majority of the customers are not satisfied with overall service provided by Atmaram Automobiles, they expect management should provide:-
Sophisticated tools and techniques.
Genuine spare parts.
Reduction in labor charges.
Timely delivery of vehicle.
So Management should concentrate on these aspects to satisfy their customers.
13 14 INTRODUCTION
MARUTI UDYOG LIMITED
Maruti Udyog Limited, a subsidiary of Suzuki Motor Corporation of Japan, has been the leader of the Indian car market for about two decades. Its manufacturing plant, located some 25 km south of New Delhi in Gurgaon, has an installed capacity of
3,50,000 units perannum, with a capability to produce about half a million vehicles.
The company has a portfolio of 11 brands, including Maruti 800 ,Omni, premium
15 small car Zen, international brands Alto and WagonR, off-roader Gypsy, mid size
Esteem, luxury car Baleno, the MPV, Versa, Swift and Luxury SUV Grand Vitara
XL7.In recent years, Maruti has made major strides towards its goal of becoming
Suzuki Motor Corporation's R and D hub for Asia. It has introduced upgraded versions of Wagon R, Zen and Esteem, completely designed and styled in- house.Maruti's contribution as the engine of growth of the Indian auto industry, indeed its impact on the lifestyle and psyche of an entire generation of Indian middle class, is widely acknowledged. Its emotional connect with the customer continues
Maruti tops customer satisfaction again for sixth year in a row according to the J.D.
Power Asia Pacific 2005 India Customer Satisfaction Index (CSI) Study. The company has also ranked highest in India Sales Satisfaction Study. The company's quality systems and\practices have been rated as a "benchmark for the automotive industry world-wide" by A V Belgium, global auditors for International Organisation for\Standardisation. In keeping with its leadership position, Maruti supports safe driving and traffic management through mass media messages and a state-of-the art driving training and researchinstitute that it manages for the Delhi Government. The company's service businesses including sale and purchase of preowned cars
(TrueValue), lease and fleet management service for corporates (N2N), Maruti
Insurance and Maruti Finance are now fully operational. These initiatives, besides providing total mobility.
When it comes to Indian auto industry, the first brand that comes to Indian customer mind is Maruthi. In our paper we are attempting to identify the future of Maruthi
Udyog Ltd which is currently the market leader. The main questions we will be addressing are,
• Can it sustain its market share
16 • Will their be a decline in profits
• What can it do to keep its growth rate?
• How can it compete in the highly competitive small car segment
• What are its strategic alternatives
We will analyze the competitors briefly concentrating more on TATA motors, one of the fast growing Indian auto manufacturer. Maruti Suzuki India Limited is a publicly listed automaker in India. It is a leading four-wheeler automobile manufacturer in
South Asia. Suzuki Motor Corporation of Japan holds a majority stake in the company. It was the first company in India to mass-produce and sell more than a million cars. It is largely credited for having brought in an automobile revolution to
India. It is the market leader in India. On 17 September 2007, Maruti Udyog was renamed to Maruti Suzuki India Limited. The company's headquarters remain in
Gurgaon, near Delhi.
HISTORY OF THE COMPANY
Maruti Udyog Limited (MUL) was established in February 1981, though the actual production commenced in 1983. Through 2004, Maruti has produced over 5
Million vehicles. Marutis are sold in India and various several other countries, depending upon export orders. Cars similar to Marutis (but not manufactured by
Maruti Udyog) are sold by Suzuki in Pakistan and other South Asian countries.
Around 1970, Sanjay Gandhi, political advisor and younger son to the then
Prime Minister of India, Indira Gandhi, envisioned the manufacture of an indigenous, cost-effective, low maintenance compact car for the Indian middle-class. Indira
Gandhi's cabinet passed a unanimous resolution for the development and production of a "People's Car". Sanjay Gandhi's company was christened Maruti Limited. The name of the car was chosen as "Maruti", after a Hindu deity named Marut.
17 At that time Hindustan Motors' Ambassador was the chief car, and the company had come out with a new entrant, the Premier Padmini which was slowly gaining a part of the market share dominated by the Ambassador. For the next ten years, the Indian car market had stagnated at a volume of 30,000 to 40,000 cars for the decade ending 1983.
Sanjay Gandhi was awarded the exclusive contract and licence to design, develop and manufacture the "People's Car". This exclusive rights of production generated some criticism in certain quarters, which was directly targeted at Indira
Gandhi. Over the next few years, the company was sidelined due to the Bangladesh
Liberation War and emergency. In the early days under the powerful patronage of
Sanjay Gandhi, the company was provided with free land, tax breaks and funds. Till the end of 1970s, the company had not started the production and a prototype test model was met with criticism and skepticism. The company went into liquidation in
1977. The media perceived it to be another area of growing corruption. [4]
Unfortunately, Maruti started to fly only after the death of Sanjay Gandhi, when
Suzuki Motors joined the Government of India as a joint venture partner with 50% share.[5] .
After his death, Indira Gandhi decided that the project should not be allowed to die. Maruti entered into this collaboration with Suzuki Motors, The collaboration heralded a revolution in the Indian car industry by producing the Maruti 800. The car went on sale on December 14, 1983. It created a record by taking 13 months time to go from design to rolling out cars from a production line. By the year 1993 the company had sold up to 1,96,820 cars, mostly by selling its chief product the Maruti
800s. By March 1994, it produced one million vehicles, becoming the first Indian
18 company to cross this milestone. It reached the two million mark in October, 1997 and rolled out its 4 millionth vehicle, an Alto-LX, on April 19, 2003.
Suzuki Motor Company was chosen from seven prospective partners worldwide. This was due not only to their undisputed leadership in small cars but also to their commitment to actively bring to MUL contemporary technology and Japanese management practices(which had catapulted Japan over USA to the status of the top auto manufacturing country in the world). A licence and a Joint Venture agreement was signed between Govt of India and Suzuki Motor Company (now Suzuki Motor
Corporation of Japan) in Oct 1982. MUL launched its first car Maruti800 on
December 14,1983 at initial price of Rs.47,500.
19 BRAND HIERARCHY OF THE COMPANY
20 Bundle of competencies
Technology
Maruthi always introduces the best technology into its product line, in addition to all its features which are almost standard in most cars. They introduced 16* 4
Hypertech engines across the entire Maruti Suzuki range. These are 4 valve engines powered by 16 bit chip. This gives an ideal combination of power and performance.
They also introduced electronic power steering system (EPS) which gives better maneuverability. Their latest introduction Swift has all the technology like surround protection (SSP). This includes ABS, dual front airbags, collapsible steering column, crashworthy structure etc. They also has additional features like brake force distribution, key less entry system. The six microprocessors are connected in a high speed canbus. This controls engine, EBS, EPS, Auto AC, Security and dead lock and air bag. Automatic climate control, rally based suspension system and above all the dynamic design is what the latest entrant offers its customers. Maruti also uses latest in IT for its operations. It uses the oracle based packages for CRM and employee feed back. Maruti also uses oracles ERP packages for its operations. ATFCAN and Maruti are collaborating on Canadian CNG conversion technology.
Design and development
Maruti Suzuki is outsourcing its design and development activities to India. They are looking towards India as their design hub. Among the company's product development challenges, the need for shorter cycle times is always at the top.
Management wants to be able to launch new models faster and reduce the time required for minor changes and development of product variants. Another challenge is co-development. Maruti's goal is to collaborate closely with its global teams and suppliers on the development of new platforms and product freshening. Other
21 challenges include streamlining the process of vehicle localization and enhancing quality and reliability.
These challenges pointed directly to a product lifecycle management (PLM) solution with capabilities for information management, process management, knowledge capture and support for global collaboration; a PLM solution directly addressing
Maruti's business challenges. For example, PLM's information management capabilities address the issue of the many platforms, local variants and export destinations. Process management permits concurrent development and faster change management and provides a platform for other process improvements - for faster vehicle development. Knowledge capture increases innovation and also reduces costs by increasing part re-use. PLM's collaboration capabilities permit global development by ensuring fast and accurate dissemination of product information. For this Maruti uses one of the leading PLM software package by UGS.
At Maruti, styling is a cross-discipline function that requires designers, engineers and model makers to pool their resources in a multitude of activities that have to be performed in order to transform creative ideas into finished products. These styling- related activities include storyboarding, conceptualizing, rendering, tape drawing, model making, feasibility analysis, CAD data generation and Class-A surfacing. In addition, Maruti designs new accessories and adds value to its products’ interiors and exteriors by designing/developing fabrics, colors and graphics. Some of the most recent examples of Maruti styling are seen in change programs for the Zen, Wagon R and
Esteem product lines. Other Maruti styling efforts are in various stages of development. Maruti used to employ a variety of software for its styling programs,
22 including SCAD (Suzuki CAD), Alias, Unigraphics and Catia. However, today
Maruti’s styling and engineering functions are doing almost all their work in UGS’
NX solutions.
Manufacturing
Markets
Maruti has a strong domestic market presence in India. It has a market share of 47% in the domestic market. The current market share of Indian car industry is given below, Maruti Exports Limited is the subsidary of Maruti Udyog Limited with its major focus on exports and it does not operate in the domestic Indian market. The first commercial consignments of 480 cars were sent to Hungary. By sending a consignment of 571 cars to the same country Maruti crossed the benchmark of 3,
00,000 cars. Since its inception export was one of the aspects government was keen to encourage. Angola, Benin, Djibouti, Ethiopia, Europe, Kenya, Morocco, Sri Lanka,
Uganda, Chile, Costa Rica and El Salvador are some of the markets served by Maruti
Exports.
23% MUL 46% Hyundai Tata 17% Others 14%
Maruti also has markets in other countries depending on export demand. Suzuki is selling cars similar to Maruti in Pakistan and South Asian countries. They have a major non European market which grew 78% in 05- 06. Loss of sales in Europe is due to stoppage of Alto which accounted for 80% of their exports and introduction of
23 Swift. Algeria has emerged as Maruti's largest overseas market with sales growing from a few hundred in FY02 to over 6,500 (FY06). The company says it may cross
9,800 this year.
Maruti is quite bullish on markets like, Chile, Morocco, Egypt and Sudan apart from the neighbouring countries. The auto major expects its exports to Chile and Morocco to go above 5,900 and 2,300, respectively, this year. Its volumes from there have moved from under 700 in FY02 to 3,115 (FY06) and exports to Sudan was nil two years back. "In Egypt, our numbers are estimated to grow to over 2,000 and 2,700 this year," according to Mr Khattar. In FY07 it was under 200 few years back.
Meanwhile, Maruti is also reporting a high on current year exports to the neighboring countries is on a high too. The company expects to export 9,200 units to Sri Lanka this year, a growth of over 50%, 1,200 units to Nepal, over 1,175 to Bhutan and 700 to Bangladesh. Maruti, which saw exports dip by 29% last fiscal, also plans to launch a new export model during '08-09, which will target the European market. The company targets to export 1, 00,000 units of the model annually.
Overall passenger car market registered 24.86% growth
Sales of compact cars jumped by 31.2%
Mid-size car segment grew slower at 14.7%.
The Government's small car policy seems to be yielding results, with the share of compact cars increasing to 68.25 per cent in the April-July 2006 period compared with 64.9 per cent in the same period last year.
Not surprisingly, compact cars emerged as the main driver of passenger car growth in the period. While the overall passenger car market increased by 24.86 per cent to
3,24,671 units, sales of compact cars jumped by 31.2 per cent to 2,21,598 units in the
April-July 2006 period. In fact, all the three major carmakers (Maruti Udyog,
24 Hyundai Motor, and Tata Motors) saw a sizeable jump in their compact car sales in the period.
Customer segmentation and value proposition
Segmentation
Under Rs. 3 • Maruti 800, Alto, Omni
Lakhs • Reva
• Ambassador
• Fiat Palio
• Hyundai Santro, Getz
• Chevrolet Opel Corsa Rs. 3-5 Lakhs • Maruti Zen, Wagon R, Versa, Esteem, Gypsy
• Ford Icon & Fiesta
• Tata Indica, Indigo
• Mahindra Bolero
25 COMPANY PROFILE
HISTORY OF HYUNDAI
The beginning of Hyundai Motor Company dates to April 1946 when founder, Ju-
Yung Chung established Hyundai Auto Service in Seoul, South Korea at the age of
31 years. The name Hyundai was chosen for its meaning which in English translates to “modern.” The Hyundai logo is symbolic of the company's desire to expand. The oval shape represents the company's global expansion and the stylized "H" is symbolic of two people (the company and customer) shaking hands.
Hyundai Motor Company was founded by Ju-Yung Chung and younger brother Se-
Yung Chung in December 1967. In 1968 the company entered into a contract with
Ford motor company to assemble the Ford Cortina and Granada for the South Korean market and continued to produce them until 1976. Hyundai completed construction of the Ulsan plant in six months and achieved the shortest groundbreaking to first commercial production of any of Ford’s 118 plants. The eight year journey provided
Hyundai with assembly knowledge, blueprints, technical specifications, production manuals, and trained Hyundai engineers.
26 Hyundai founder, Ju-Yung Chung
The leader of the Hyundai-Kia Automotive Group was changed by founder, Ju-Yung
Chung in 1999 after the Asian financial crisis and government mandated breakup of the Hyundai Group. Previously the automotive group was being managed by the founder's brother. His son, Mong-Koo Chung had performed well managing
Hyundai's after-sale service and dealerships. Mong-Koo was the catalyst of an extreme turnaround for the company. During the 80s and 90s, his uncle focused on
Hyundai Automotive's growth and producing as many cars as possible. Product quality and customer satisfaction suffered. From his experience working with
27 dealerships and angry Hyundai customers, Mong-Koo knew well the damage to the
Hyundai reputation and the high cost of warranty repairs.
When Mong-Koo began broadcasting his intention to turn Hyundai into a top-five automaker, few outside the company took him seriously. Hyundai, like many family- controlled Korean companies, was ultra-hierarchical and slow to change. Managers rarely cooperated with one another and division chiefs ran their operations as personal fiefdoms. "When a problem occurred, each division would blame other divisions," says Lee Hyun Soon, Korean head of R&D.
Mong-Koo's first step was to replace members of top management with engineers.
He formulated a strategy to challenge Toyota for quality. Extensive work with consultants, J.D. Powers, and benchmarking of the world's best automotive companies followed. He also sent teams to America to study weather, road conditions, and driver habits. Quality control staff increased tenfold to 1,000 and they reported directly to him. Employees were encouraged and rewarded to offer suggestions. One example that is told is that a worker reported the Sonata and XG350 sedans had differently shaped spare tire covers. Sharing the cover saved Hyundai about $100,000 per year.
There are reports that the Korean government requested that Mong-Koo step down as
Hyundai Automotive's chairman in 2000 so that it could be led by a non-family member. Mong-Koo refused, arguing that he was best qualified to lead the company.
Mong-Koo Chung has earned a reputation for an obsession with quality. The new
Sonata's launch in Korea was delayed for two months for 50 items management wanted fixed. Employees in the Asan factory worked feverishly to correct items such
28 as a tiny error in the size of the gap between two pieces of sheet metal near the headlight. The problem was not visible to the human eye and was narrower than 0.1 millimeter. Numerous managers and employees worked on the problem for 25 days before it was solved.
The Hyundai Group spent most of its history operating as one of South Korea's largest chaebols, or conglomerates. The group displayed spectacular growth since its founding in 1947 and its rapid expansion--to a point where its interests included car manufacturing, construction, shipbuilding, electronics, and financial services-- reflected the achievements attained during South Korea's economic miracle. The
South Korean economy took a turn for the worse during the late 1990s, however, which prompted President Kim Dae Jung to launch a series of reforms aimed at dismantled large, often corrupt, chaebols. By 2001, much of the Hyundai Group had been dismantled. Roh Moo Hyun, elected President in 2002, continues to reform the
South Korean business sector.
Hyundai's growth was linked inextricably to South Korea's reconstruction programs following World War II and the Korean War as well as to the state-led capitalism that resulted in a polarization of the country's corporate structure and the domination of the economy by a number of conglomerates. World War II left the country devastated, and the small recovery Korea had been able to make following this conflict was reversed during the Korean War, which lasted from 1950 to 1953. The chaebols, which are similar to Japan's zaibatsu, worked with the government in rebuilding the economy and formed an integral part of Korea's economic strategy and its drive to build up its industrial base.
29 One man, Chung Ju Yung, stood at the center of Hyundai's progress from 1950 until he died in 2001. Chung, considered a founding father of the Korean chaebol structure, left school at an early age and developed what has been described as an autocratic and unconventional management style. He noted those areas of industry that the government had selected as crucial to economic development and structured the group accordingly.
HYUNDAI MOTOR COMPANY
• Founded in 1967
• Brand value of US $ 4.45 billion- 2007 ( Business Week)
• Hyundai’s brand ranking improves by 3 places in best Global Brands Survey
2007( 75 to 72)
• Sale of 3.7 million units world wide- 2005 (including the Kia brand)
• 6th largest auto manufacturer in the world- Hyundai- Kia Automotive Group
• Sold in 193 countries through a network of over 5000 dealership
• 2006 Ideal Vehicle Brand- Hyundai- Auto Pacific USA
• Official sponsor and vehicle supplier- FIFA World Cup, Germany- 2006
Challenges for Hyundai Motor in the 1980s
30 The 1980s were to prove equally eventful for Hyundai Motor Company. After the oil shock of 1979, the government took steps to protect the industry, which had by then made large investments in plants and equipment. It kept a tight grip on the development of this sector and in 1981 divided the market, restricting Hyundai to car and large commercial vehicle manufacture. These regulations were revised in 1986 following the recovery of the market, and Hyundai was able to resume manufacture of light commercial vehicles.
By the middle of the decade, Hyundai had taken Canada by storm. Its Pony subcompact vehicle became Canada's top-selling car less than two years after entering the market. Hyundai's sales in Canada, where it was also selling the Stellar, shot from none in December of 1983 to 57,500 units in the first nine months of 1985, topping those of Honda and Nissan combined. Total production in 1985 had risen to 450,000.
In 1985, the company announced plans to build a car assembly plant at Bromont, near
Montreal, and at the same time decided to enter the U.S. market. The entry into the
U.S. market, begun in 1986, proved an immediate success. Its low-priced Excel model was well received, and of the 302,000 cars exported in that year, 168,000 were sold in the United States, where sales were to increase to 263,000 the following year.
Hyundai's initial success in the United States, though, faded before the end of the decade when sales began to flag. Problems in the company's key overseas market were attributed to the lack of new models, increasing competition in the weakened
U.S. car market, and the severe strikes that hit the company in the latter part of the
1980s and in 1990.
Hyundai decided to move up market with the introduction of the Sonata, a four-door sedan, in late 1988; initial sales, though, proved disappointing. A year later, this car
31 was being manufactured at the Bromont plant, following the opening of the factory in
1989. In the same year, Hyundai signed a deal with Chrysler Corp. to build 30,000 midsize, four-door cars for the U.S. company, starting in 1991. Chrysler was linked to
Mitsubishi Corporation, which in turn was affiliated with Hyundai, in which it held a
15 percent stake.
Hyundai planned to increase production at the Canadian plant to 100,000 by the time the Chrysler deal came into effect. Export sales, which were also hit by the appreciation of the won and the depreciation of the yen, remained sluggish. Increased wage costs also affected the group but had the advantage of boosting domestic sales that, for the industry as a whole, increased 50 percent to 356,000 units in 1989.
Hyundai in the Early 1990s
The group became intent on reducing its dependence on the U.S. markets. By 1990, the domestic market was proving increasingly important to the essentially export- oriented group. Both the car and construction markets were enjoying strong demand at the end of the decade. This situation helped Hyundai Engineering & Construction, like the vehicle operations, to take up the slack created by declining markets abroad, particularly in the Middle East. The group had accumulated experience in a broad range of plant construction, including Korea's first nuclear power plant. Meanwhile exports in the shipbuilding sector were showing a marked improvement.
Following the creation in 1983 of Hyundai Electronics, Hyundai stepped up its presence in the electronics field and produced semiconductors, telecommunication equipment, and industrial electronic systems. The company, which focused on
32 industrial markets, sought to increase its presence in consumer electronics, despite formidable competition from domestic companies such as Samsung and Goldstar.
The group as a whole had proved itself capable of taking diverse markets by storm and was determined to maintain and expand its markets by stepping up research-and- development spending. However, the country's drive towards democracy brought new uncertainties. In the changing economic and political environment, the group faced a labor force seeking higher wages, a less competitive currency, and increasing competition in the all-important overseas markets.
Faced with this changing political scene and a less favorable international rate of exchange, Hyundai shifted gears in the early 1990s. In automaking, its largest enterprise, it worked to regain lost ground in the United States, where demand for its low-priced Excel and somewhat higher-priced Sonata models slumped in the wake of widespread consumer complaints and a depressed entry-level market. Hyundai's new
Elantra sedan, selling for $9,000, was to be its lead item in the U.S. market. The group's chairman at that time, Chung Ju Yung's younger brother, Chung Se-yung, was expecting a new day for the group, as Korea itself matured with new labor and political freedoms.
As Korea's second-largest conglomerate, with 1990 revenues estimated at $35 billion,
Hyundai Group was clearly to play an important role in the new Korea. Indeed, the
Hyundai founder and chairman, Chung Ju Yung, chose personally to play a new, political role in that development, founding a new political party early in 1992 with a view to promoting open-market policies. Chung's Unification National Party (UNP) promptly won 10 percent of National Assembly seats; Chung himself then retired from his Hyundai chairmanship to set his sights on the Korean presidency. The
33 Hyundai conglomerate, already forced by the government to pay billions in back taxes, came under even more severe government pressures after Chung formed his party. Regulators charged illegal political contributions by one Hyundai company and accused others of tax evasion. In addition, Hyundai's ability to finance its operations was threatened by other government actions. In return, Hyundai, at this time headed by Chung Se Yung, threatened to withhold huge investments planned for the coming year. In 1993, having finished third in South Korea's presidential election, Chung Ju
Yung reportedly said that he would resume chairmanship of the Hyundai Group and would reorganize the corporation into many specialized, independently run companies. In 1995, his second-eldest son, Chung Mong Koo, was named chairman of the group while Chung remained honorary chairman.
In auto and personal-computer sales, Hyundai companies moved aggressively. In mid-
1992, Hyundai's new Motor America president, Dal Ok Chung, took over in the
Fountain Valley, California, headquarters. Among other marketing devices, Hyundai offered generous rebates and free two-year service warranties that covered even windshield wiper blades. By early 1993, Hyundai was offering the first auto engine it had designed and made itself, as opposed to the Japanese-made Mitsubishi engines that were used in its earlier models. More than ever committed to the smaller vehicle,
Hyundai was selling autos in more than 100 countries.
In personal computers, Hyundai in mid-1992 took a drastic step when it moved its entire electronics operation to the United States, the world's largest computer market.
Hyundai Information Systems had already entered the direct personal-computer market, cutting prices and offering toll-free telephone support and sales. The new operation, based in San Jose, California, had entirely American leadership, headed by
34 IBM veteran and former CompuAdd president Edward Thomas. The California advantage was mainly proximity to the market, which meant lessened inventory requirements. These developments showed the Hyundai Group to have the same innovative and energetic approach that had characterized its earlier ventures.
The Dismantling of Hyundai
The latter years of the 1990s brought with them economic turmoil for South Korea. In order to restore the nation's financial health, President Kim Dae Jung, who took office in 1998, launched a series of restructuring programs designed to reform the chaebols, many of which had become heavily debt-burdened. His reforms included changing the ownership, business, and financial structures of the region's large conglomerates. By this time, the Hyundai Group was responsible for approximately 20 percent of Korea's
GDP. As such, its financial health was directly related to South Korea's overall economic condition.
As a result of government pressures, Hyundai and other South Korean chaebols, including the Daewoo Group, set plans in motion to sell off many of their businesses in order to pay down debt and shore up profits. Hyundai's concentration remained on autos, electronics, heavy industry, construction, and finance. Even as the group struggled under its debt load, it strengthened its holdings with the purchase of Kia
Motors Co. Ltd. and LG Semiconductor.
Despite the government's involvement, Hyundai was slow to comply with restructuring demands. Its questionable accounting practices often made it the target of negative publicity. Rivalries between members of the founder's family also led to bad press, leaving many investors anxious about the future of the group and its
35 member companies. Indeed, many Hyundai affiliates, including Hyundai Engineering
& Construction and Hyundai Electronics, were nearing bankruptcy as debt continued to spiral out of control. By 2001, total group debt reached W35.87 trillion ($25.59 billion).
Hyundai Motor Co., on the other hand, was prospering as Korea's largest car maker.
The auto concern officially separated from the Hyundai Group in September 2000, signaling the start of sweeping changes that led to the eventual dismantling of what was once South Korea's largest conglomerate. In August 2001, nine core Hyundai companies, including Hyundai Engineering & Construction and Hynix Semiconductor
Inc. (formerly known as Hyundai Electronics Industries), left the chaebol. The separation cut Hyundai Group's assets to just $20.8 billion and left it in control of 18 member companies. Hyundai continued to be pared down the following year.
South Korea had bounced back from its economic crisis of 1997 and 1998 to become a leading global force in the technology sector. By 2003, foreign investors owned over a third of the shares of companies listed on Seoul's stock exchange. During 2002,
Roh Moo Hyun was elected president of South Korea. Feeling the pressure from foreign investors, he maintained that harsh reform would continue within South
Korea's chaebols. A May 2003 Business Week article supported the efforts of the new president, who stated that "slowly and steadily, good governance has been asserting itself in Korea." Indeed, it appeared as though the powerful, family-run Korean chaebols were a thing of the past. While this marked an end to the Hyundai Group's history, it pointed to a fresh start for many companies bearing the Hyundai name.
HYUNDAI MILESTONES
36 • 2000 Hyundai Motor company founded
• 2001 Licensing agreement signed with Ford
• 2002 “Pony”- Korea’s first independently designed and manufactured model
• 2003 First Pony exported to Ecuador
• 2004 “ Excel” launched
• 2005 Entered US market with “ Excel”
• 2006 “Sonata” launched
• 2007 Developed first proprietary engine 4- cylinder Alpha
• 2008 Cumulative exports surpass 4 million units, Cumulative production
surpass 10 million units.
• 2009 “Grandeur XG” launched, Grand opening of Chennai plant in India,
Acquired Kia Motors Corp.
• 2010 “ Santa Fe” launched
• 2011 Cumulative exports surpass 10 million units
HYUNDAI’s BRAND COMMUNICATION
Drive your way is corporate slogan which represents our pledge to become a leading
Global brand. Our foremost priority is to both inspire and satisfy our customers.
37 Therefore, the customers’ lives (“your way”) become more confident (“Drive”) and that we will always stand by the side.
BENEFITS OF A STRONG HYUNDAI BRAND
A strong brand leads not only the improvement of corporate image, but is also the source of long term profit.
38 39 HYUNDAI MOTORS INDIA LIMITED
The Start- 1999
• HMIL (Hyundai Motor India Limited) was established in 1996
• State of the art plant at Irrungattukottai near Chennai, constructed at a total
cost of $ 614 million.
• Installed capacity to make 2 lakh 50 thousand cars per annum and 1 lakh 30
thousand engine transmission units per annum.
• In process to increase capacity to 6 lakh units per annum by 2007
The Start- 2000
• Production commences.
• Localization of 70%, which is one of the highest, amongst all car
manufacturers.
New Horizon 2001
• The Santro was launched.
• Creates history by becoming one of the best selling compact cars.
• Hyundai becomes India’s second largest car manufacturers in six months.
New horizon 2002
40 • The accent is launched.
• Santro wins Business Standard Motoring “Car of the year award”.
New horizon 2003
• 100000th cars roll out.
• Santro zip drive launched.
• Export of santro and Accent started.
• Santro and Accent bag JD Power Asia Pacific Award.
New Horizon 2004
• Sonata was launched.
• Santro wins Business Standard Motoring “Car of the year award” again.
• 200000th cars roll out.
• 2001 “IQS” and “APEAL” honours from JD Power.
New Horizon2005
• 300000th cars rolls out.
• Accent Viva launched.
41 New Horizon 2006
• HMIL awarded “Manufacturer of the year” by CNBC Auto Car India.
• HMIL declared car maker of the year at ICICI overdrive awards.
• 400000th cars roll out.
• The Santro Xing launched.
• The Terracan was launched.
New Horizon 2007
• 1500 exported to Europe under model name Atos.
• 500000th vehicles roll out.
• The Getz was launched.
• The Elantra was launched.
New Horizon 2008
• The Tucson was launched.
• The Sonata Embera was launched.
New Horizon 2009
• The all new Hyundai Verna was launched.
42 New Horizon 2010
• The sonata Embera CRDi VGT was launched.
• Santro crosses the 10 lakh mark.
• Getz Prime was launched.
• Automatic variant of the Sonata Embers CRDi VGT launched.
• Santro CNG launched
• Fastest 15 lakh cars roll out.
• Hyundai i10 was launched.
Milestone-400,000 th Car Exported
Hyundai Motor India has achieved another significant milestone with the shipment of its 400,000th Atos Prime to its overseas markets in New Delhi on august 6, 2007.
In October 2006 it exported its 300,000th car. The milestone achievement of exporting the next one lakh car in less than a year makes Hyundai’s 400,000th overseas sale the fastest export shipment in the industry.
Currently, Hyundai Motor India is exporting Santro, Getz and the Accent model to around 67 countries across Europe, Africa, Latin America and Middle East.
Export Milestones
43 Export Roll-Out Year 1,00,000th car October, 2008 2,00,000th car October, 2009 3,00,000th car October, 2010 4,00,000th car August, 2011
CAR DETAILS
MODEL NET COMPLETE PERMANENT 3RD YR ON ROAD
PRICE INSURANCE REGIST. EXT.WTTY. PRICE Santro Non AC (S) 2,72,290/- 8,468/- 7,800/- 1,975/- 2,90,533/- Santro Non AC (M) 2,75,879/- 8,566/- 7,900/- 1,975/- 2,94,320/- Santro GL (S) 3,41,099/- 10,345/- 9,500/- 1,975/- 3,62,919/- Santro GL (M) 3,44,691/- 10,443/- 9,600/- 1,975/- 3,66,709/- Santro GLS (S) 3,60,176/- 10,866/- 10,000/- 1,975/- 3,82,927/- Santro GLS (M) 3,63,764/- 10,963/- 10,100/- 1,975/- 3,86,802/- Getz GLE 4,02,156/- 12,011/- 11,050/- 3,025/- 4,28,242/- Getz GVS 4,33,897/- 12,877/- 11,850/- 3,025/- 4,61,649/- Getz GVS (175 tyre) 4,41,264/- 13,078/- 12,030/- 3,025/- 4,69,649/- Getz GVS (1.3) 4,51,098/- 13,346/- 12,280/- 3,025/- 4,79,749/- Getz GLS (1.3) 4,72,098/- 13,919/- 12,800/- 3,025/- 5,01,842/- Getz GLX (1.3) 5,06,194/- 14,849/- 13,660/- 3,025/- 5,37,728/- Getz CRDI 5,72,350/- 16,654/- 29,620/------6,18,624/-
COLOURS
Solid: (1) Ebony Black (EB), Noble White( NW)
Mettalic: Brite Silver (QO), Real Earth (H2), Passion Red (Or), Space Silver (5s),
Sky Blue, Blue Onyx (2), Dynastey Red (AE), Midnight Grey(2m), Orange Lango are
available only in Santro.
44 CAR DETAILS
COLOURS:- Ebony Black (EB), Noble White (NW), Brite Silver (QO), Space Silver MODEL NET COMPLETE PERMANENT 3rd Yr ON
PRICE INSURANCE REGISTRATION EXTRA ROAD
WARRANTY PRICE Accent GLE 5,07,941/- 14,897/- 13,700/- 4,120/- 5,40,658/- Verna-I 6,56,819/- 19,789/- 17,420/- 4,235/- 6,98,263/- Verna-XI 6,75,299/- 20,317/- 17,880/- 4,235/- 7,17,731/- Verna-XXI 7,33,414/- 21,976/- 19,340/- 4,235/- 7,78,965/- Verna-XXI- 7,53,454/- 22,548/- 19,840/- 4,235/- 8,00,077/-
ABS Verna-CRDI 7,71,906/- 22,099/- 39,600/- 9,035/- 8,42,640/- Verna-CRDI 7,93,948/- 22,700/- 40,700/- 9,035/- 8,66,383/-
ABS Verna-CRDI 8,22,130/- 23,469/- 42,100/- 9,035/- 8,96,734/-
SX Verna-CRDI 8,44,175/- 24,071/- 43,200/- 9,035/- 9,20,481/-
SX ABS (5S), Real Earth (H2), Midnight Grey (2M), & Sky Blue (only in Accent) & Passion
Red (OR), Dynasty Red (AE), Kyara (AG) only in Verna.
PROFORMA INVOICE
CAR DETAILS
MODEL NET COMPLETE PERMANENT 3rd Yr ON
PRICE INSURANCE REGIST. EXTRA ROAD
45 Wtty PRICE I-10 D-Lite (S) 3,47,747/- 10,527/- 9,700/- 2,500/- 3,70,474/- I-10 D-Lite (M) 3,51,361/- 10,625/- 9,800/- 2,500/- 3,74,286/- I-10 Era (S) 3,84,156/- 11,520/- 10,600/- 2,500/- 4,08,776/- I-10 Era (M) 3,87,770/- 11,618/- 10,700/- 2,500/- 4,12,588/- I-10 Magna (S) 4,08,286/- 12,178/- 11,200/- 2,500/- 4,34,164/- I-10 Magna (M) 4,11,900/- 12.277/- 11,300/- 2,500/- 4,37,977/- I-10 Magna (option 4,78,491/- 14,094/- 12,960/- 2,500/- 5,08,045/- pack)(S) I-10 Magna (option 4,82,104/- 14,192/- 13,050/- 2,500/- 5,11,846/- pack)(M) I-10 Magna(option 4,93,710/- 14,509/- 13,350/- 2,500/- 5,24,069/- pack with sun roof) (S) I-10 Magna (option 4,97,321/- 14,607/- 13,430/- 2,500/- 5,27,858/- pack with sunroof) (M)
COLOURS: -
Solid: Electric Red, Vartual Yellow.
Mettalic: Alpine Blue, Oyster Gray, Sleek Silver, Blushing Red, Champaign Gold,
Deep Ocean Blue, Crystal White, Stone Black.
SANTRO
• The Santro id India’s largest exported car under the name Atos.
• Santro is produced exclusively in India and exported around the world to over
65 countriesincluding advance markets like North America and Europe.
Milestones
• Santro was launched in 1998.
• Euro-II version launched ahead of schedule.
• Santro Zip Drive launched in May 2000.
46 • In Jan 2001 Ventilated Disc brakes added on all variants of Santro.
• In July 2001 facelift of the Santro launched.
• In October 2001 the LP version was launched (Zip Value).
• In March 2002 Santro Zip Plus with improved 1.1 L Engine launched.
• Santro Xing launched in 2003.
• eRLX engine and new variants launched in2005.
• Santro crosses the 10 lakh mark in sales with over 7 lakh Indian customers and
3 lakh units exported.
• Santro CNG launched.
• New variants launched in September 2007.
Variants
Santro is available in the following variants:-
• XK Non-AC
• GL
• GLS
Dimensions
Overall Length 3565 mm Overall Width 1525 mm Overall Height 1590 mm Wheelbase 2380 mm Turning Radius 4.4 mtr Ground Clearance 164 mm i10
• Compete in the high volume mid compact segment.
• Most awarded car of the year.
47 Code name PA Model name i10 Design & Creation Hyundai- Kia R&D centre, Korea International Debut India Launch Time November 2007 Body Style 5 Door hatchback Power Source 1.1 L iRDE engine Competing Segment Compact
Variants
• D- lite
• Era
• Magna
• Magna (option pack)
• Magna ( option pack with sunroof)
Dimensions
Overall Length 3565 mm Overall Width 1595 mm Overall Height 1550 mm Wheelbase 2380 mm Ground Clearance 165 mm Track- Front 1400 mm Rear 1385 mm
Getz Prime
• Awarded “ Car of the Year 2005” by both CNBC Autocar and BS Motoring.
Milestones
• International Debut on 3rd May 2002
• European launch in 2003
• Launched in India in 2004
• New Getz Prime launched in April 2007
48 • Getz CRDi launch sept. 2007
Variants
Getz Prime is available in the following variants:
Petrol
• 1.1 GLE
• 1.1 GVS
• 1.1 GVS OPT
• 1.3 GLS
• 1.3 GLX
Diesel
• 1.5 GVS
Dimensions
Overall Length 3825 mm Overall Width 1665 mm Overall Height 1515 mm Wheelbase 2455 mm Turning Radius 5.0 mtr Ground Clearance 160 mm ACCENT
• Launched in India October in 1999.
• Tried and tested product.
• Choice of over 1.5 lakh Indian customers.
Milestones
• Awarded as number 1 in IQS by JD Power Asia Pacific in India in 2001.
• Awarded as BSM Jury awarded by Business Standard Motoring in 2002.
• Awarded as No.1 Mid size diesel car by TNS Automotive in 2005.
49 Dimensions
Overall Length 4250 mm Overall Width 1670 mm Overall Height 1370 mm Wheelbase 2440 mm Turning Radius 5.0 mtr Ground Clearance 172 mm
VERNA
• Over 25,000 Indian customers in just 10 month since launch.
• Widest choice of colours in segment (l2)
• One of the India’s largest service networks
Milestone
• Awarded as “Car of the year 2007”- Overdrive
• Awarded as “ Best value for Money Car 2007”- CNBC Autocar
Variants
• i
• Xi
• XXi
• CRDi VGT SX
50 SONATA EMBERA
• 5th Generation Car- Approx. 150,000 sold in U.S in 2006
• One of the widest in segment
• One of the India’s largest network
Milesstone
• Awarded as “Ideal Vehicle Award”- Auto Pacific (USA)
• Awarded as “Most reliable car” by Time Magazine
Variants
• 2.4 M/T
• 2.4 A/T
• 2.0 CRDi M/T
• 2.0 CRDi A/T
Dimensions
Overall Length 4800 mm Overall Width 1832 mm Overall Height 1475 mm Wheelbase 2730 mm Turning Radius 5.46 mtr Ground Clearance 170 mm
51 ELANTRA
Milestones
Award By / Country Year Best passenger car Automobiliski, Yugoslavia 2000 Top Honours VSS (Vehicle Auto Pacific Inc, USA 2003
Satisfaction Score) Best Value Small Car- Total Strategic Vision, USA 2003,2004
Value Index Five star for safety NHTSA, USA 2004 Best Value for Money Car CNBC TV18-Autocar Award, India 2005
Variants
Elantra is available in following variants:
• GT
Dimensions
Overall Length 4525 mm Overall Width 1725 mm Overall Height 1450 mm Wheelbase 2610 mm Turning Radius 5.06 mtr Ground Clearance 185 mm
TUCSON
• Over 2 lakh cars were sold world wide in2006
• Back up: One of India’s largest service network
Milestone
• “SUV of the year 2006”: NDTV Profit- Car& Bike (India)
52 Dimensions
Overall Length 4325 mm Overall Width 1830 mm Overall Height 1730 mm Wheelbase 2630 mm Turning Radius 5.4 mtr
53 54 Hyundai i10
Pros:
1. International car made in India. Meets international safety and quality
standards and will be sold globally.
2. Fantastic interiors which is comparable to large and expensive cars.
3. Gearshift on dash which is a category first. It is smooth too. Tilt adjustable
steering.
4. Good quality and build. Best in segment. (Especially the doors give a thud
sound when shut unlike clanky noise by few other cars)
5. Supposed city mileage of around 13-15 Km/L. (On highway, close to 20 Km)
6. It’s not a Santro upgrade, this is a fresh design, though reminiscent of the
Santro.
55 7. Delightful to ride in the city. Best in class.
8. Good stability on highway. Good road grip.
9. AC is good.
10. Decent rear seat space. Feels comfortable.
11. Tubeless 80 profile tyres.
12. The space between driver and front passenger has a good utility area.
13. High end safety features like dual airbags, ABS and frills like sun roof in
Magna O variant (expensive though).
Cons:
1. A new version, but performance is same as Santro.
2. The boot looks deep. Will have difficulty in handling luggage.
3. Priced around 30-40 K more.
56 Maruti Suzuki
Estilo
Pros:
1. Maruti after sales service.
2. Decent boot space.
3. Maintenance is less.
4. Large service network.
Cons:
1. Gets nervous at high speeds.
57 2. Not for the highway.
3. Dash looks a decade old.
4. The old Zen was a better car.
Maruti Suzuki
Wagon R
Pros:
1. Spacious.
2. Large boot space.
3. High seat positioning.
4. Factory fitted LPG in the Duo version.
58 5. Maruti after sales service.
6. Maintenance is less.
7. Tall boy design good for elders to enter in.
8. Large service network.
Cons:
1. Box typed design.
2. Gets nervous at high speeds.
3. Plans to phase out petrol version.
4. Not for the highway.
59 Structure
Ownership
MUL India's leading automobile manufacturers and the market leader in the car segment, both in terms of volume of vehicles sold and revenue earned is a public sector initiative. 18.28% of the company is owned by the Indian government, and
54.2% by Suzuki of Japan. The Indian government held an Initial Public Offering of
25% of the company in June of 2003.
60 Ownership
Govern ment others Government IPO Suzuki
IPO
others Suzuki
Main divisions(brand equity)
The major services offered are,
Sales of Automobiles
Authorized Service Stations
• Maruti is one of the companies in India which has unparalleled service
network. To ensure the vehicles sold by them are serviced properly Maruti had
1545 listed Authorized service stations and 30 Express Service Stations on 30
highways across India. Service is a major revenue generator of the company.
Most of the service stations are managed on franchise basis, where Maruti
trains the local staff. Other automobile companies have not been able to match
this benchmark set by Maruti. The Express Service stations help many
stranded vehicles on the highways by sending across their repair man to the
vehicle.
Maruti Insurance
• Launched in 2002 Maruti provides vehicle insurance to its customers with the
help of the National Insurance Company, Bajaj Allianz, New India Assurance
and Royal Sundaram. The service was set up the company with the inception
of two subsidiaries Maruti Insurance Distributors Services Pvt. Ltd and Maruti
61 Insurance Brokers Pvt. Limited. This service started as a benefit or value
addition to customers and was able to ramp up easily. By December 2005 they
were able to sell more than two million insurance policies since its inception.
Maruti Finance
• To promote its bottom line growth, Maruti launched Maruti Finance in
January 2002. Prior to the start of this service Maruti had started two joint
ventures Citicorp Maruti and Maruti Countrywide with Citi Group and GE
Countrywide respectively to assist its client in securing loan. Maruti tied up
with ABN Amro Bank, HDFC Bank, ICICI Limited, Kotak Mahindra,
Standard Chartered Bank, and Sundaram to start this venture including its
strategic parnters in car finance. Again the company entered into a strategic
partnership with SBI in March 2003. Since March 2003, Maruti has sold over
12,000 vehicles through SBI-Maruti Finance. SBI-Maruti Finance is currently
available in 166 cities across
Maruti TrueValue
• Maruti True Value is a service offered by Maruti Udyog to its customers. It is
a market place for used Maruti Vehicles. one can Buy, Sell or Exchange used
Maruti Vehicles with the help of this service in India.
N2N Fleet Management
• N2N is the short form of End to End Fleet Management and provides lease
and fleet management solution to corporates. Its impressive list of clients who
have signed up of this service include Gas Authority of India Ltd, DuPont,
62 Reckitt Benckiser, Sona Steering, Doordarshan, Singer India, National Stock
Exchange and Transworld. This fleet management service include end-to-end
solutions across the vehicle's life, which includes Leasing, Maintenance,
Convenience services and Remarketing.
Maruti Driving School
• As part of its corporate social responsibility Maruti Udyog launched the
Maruti Driving School in Delhi. Later the services were extended to other
citites of India as well. These schools are modelled on international standards,
where learners go through classroom and practical sessions. Many
international practices like road behaviour and attitudes are also taught in
these schools. Before driving actual vehicles participants are trained on
simulators.
Key personnel
Initially R.C.Bhargava, was the managing director of the company since the inception of the joint venture. Till today he is regarded as instrumental for the success of Maruti
Udyog. Joining in 1982 he held several key positions in the company before heading the company as Managing Director. Currently he is on the Board of Directors. After completing his five year tenure, Mr. Bhargava later assumed the office of Part-Time
Chairman. The Government nominated Mr. S.S.L.N. Bhaskarudu as the Manging
Director on August 27, 1997. Mr. Bhaskarudu had joined Maruti in 1983 after spending 21 years in the Public sector undertaking Bharat Heavy Electricals Limited as General Manager. Later in 1987 he was promoted as Chief General Manager, 1998 as Director, Productions and Projects, 1989 Director, Materials and in 1993 as Joint
Managing Director.
Production Milestones
63 ➢ 1st vehicle produced, December 1983
➢ 1,00,000 vehicles produced by August, 1986
➢ 5,00,000 vehicles produced by June, 1990
➢ 10,00,000 vehicles produced by March, 1994
➢ 15,00,000 vehicles produced by April, 1996
➢ 20,00,000 vehicles produced by October, 1997
➢ 25,00,000 vehicles produced by March, 1999
➢ 30,00,000 vehicles produced by June, 2000
➢ 35,00,000 vehicles produced by December 2008
➢ 40,00,000 vehicles produced by April, 2009
➢ 45,00,000 vehicles produced by April, 2010-11
OTHER PRODUCTS OF MARUTI SUZUKI
Maruti
• Maruti 800 STD BS III
• Maruti 800 AC BS III
64 Omni
• 5 seater Maruti Omni
• 8 seater Maruti Omni
• LPG Maruti Omni
Maruti Alto
• Alto
• Alto Lx
• Alto Lxi
Maruti Zen
• Maruti Zen Lx
• Maruti Zen Lxi
• Maruti Zen Vxi
Wagon R
• WagonR Lx
• WagonR Lxi
• WagonR Vxi
• WagonR Ax
Versa
• 5 seater
• 8 seater ( DX & DX2)
65 Maruti Esteem
• Maruti Esteem Lx
• Maruti Esteem Lxi
• Maruti Esteem Vxi
Baleno
• Baleno Sedan VXi
• Baleno Sedan Lxi
Brands and models
Till recently whenever we think of Maruthi we think of it as 800 due to the huge sales it achieved. It was like a symbol of luxury for the middle class. Nowsituations are changing and people are looking at Maruthi stable for the wide range of products they are offering. The various models and brands that are sold by Maruthi in the order of their launch are,
• Maruti 800: Launched 1983. India’s largest selling car till 2004.
• Maruti Omni: Launched 1984.
• Maruti Gypsy: Launched 1985.
• Maruti 1000: Launched 1990
• Maruti Zen: Launched 1993.Modified 2003.Production to be halted
2006New generation Zen (First generation MR Wagon in Japan) to be
introduced 2006
• Maruti Esteem: Launched 1994
66 • Maruti Wagon- R: Launched 1999 Modified 2006
• Maruti Baleno : Launched 1999
• Maruti Alto: Launched 2000. Currently the largest selling car in India
• Maruti Grand Vitara: Launched 2003
• Maruti Grand Vitara XL-7
• Maruti Versa: Launched 2004
• Maruti Swift: Launched 2005
BRAND PORTFOLIO OF THE COMPANY
YEAR CLASS BRAND NAME SLOGAN INTRODUCED Change your life Maruti 800 1983
Let's go Maruti Alto 2000
Shape your world City Car Maruti Zen Estilo 2005
Stop @ nothing Suzuki Alto (A-star) 2008
Upcoming model Suzuki Splash in 2009 Super mini Maruti Wagon-R 1999 For the smarter race
Car Maruti Suzuki Swift 2005 You're the fuel
Compact Maruti Suzuki SX4 2007 Men are back
Car Maruti DZiRE 2008 The heart car Play it your way Sports Suzuki Grand Vitara 2007 Utility King Maruti Gypsy 1985 Vehicle
67 Maruti Omni 1984 Fits all Microvan The joy of travelling Maruti Versa 2003 together
68 CHAPTER 4 – REVIEW OF LITERATURE
Study of Automotive Industry - Economics Research Paper The automotive industry is one of the key industries in the United States and is a large segment of the overall U.S economy. The automotive industry has witnessed tremendous transnational growth during the last decade because of changes in consumer preferences, political and business policies and changing economic conditions. High growth has continued into the new millennium with the second highest total sales on record being achieved in
2001 as indicated by the Economist Intelligence
vivek singh (2008) - The Indian car industry can be classified on the basis of price, into lower end small car or economy segment, higher end of the economy segment (Rs0.25-0.45mn) mid-size segment (Rs0.45-0.8mn), luxury/premium car segment (above Rs0.8mn). The lower end of the economy segment includes cars like Maruti 800, Maruti Omni and Premier Padmini.
The higher end will include models like Maruti Zen, Matiz, Hyundai Santro and
Telco Indica. The mid-sized segment currently includes models like Ford Ikon,
Hyundai Accent, Maruti Esteem, Cielo and Honda City. The luxury segment of the car market includes such models as Mitsubishi Lancer and Mercedes
E220.
"On the financial front, Ford Motors has entered into a definitive agreement to sell its Jaguar and Land Rover operations to Tata Motors. The
Indian auto giant has agreed to pay approximately $2.3 billion for full ownership of the flagship luxury brands. As part of the transaction, Ford will continue to provide engineering support, including research and development,
69 plus information technology and accounting. The company will certainly feel the financial benefits of the deal, as in the wake of the economic downturn
Ford has experienced combined losses of over $15 billion during the past two years. (MW 2) This is an attempt at Ford at capitalizing upon the globalization of the industry."
The response of Tata Motors India to recession and macroeconomic factors are discussed in this paper, which comprises four research tasks: identification of the macroeconomic factors affecting sales, an examination of the impact of forecasting by the World Bank and IMF, how macroeconomic developments will affect performance, and what steps should be taken to guard against adverse conditions. The pressures of inflation, levels of unemployment and interest rates, the expansion or retraction of the economy, favourable prices for oil and raw materials – the fundamental factors influencing Tata manufacturing are clearly set out by the analyst. GDP growth in India and the Far-East (but stagnation in Western markets) are also considered, as is the issue of aversion to risk.
Automobile Industry There is no industry more present in the world- wide community than the automobile industry. The automobile has changed the lives, culture, and economy of the people and nations that manufacture and demand them. Ever since the late 1800s when the first "modern" car was invented by Benz and Daimler in Germany, the industry has grown into a billion dollar industry affecting so many aspects of our lives. There are more than 400 million passenger cars alone on the roads today. During the early part of the twentieth century, the United States was home to more
70 than 90 percent of the worlds automotive industry, but has shrunk to about
20 percent in todays world.
This drastic change has occurred by the booming economies in such nations as Japan, Germany, Canada, France, Italy, and other nations. The
US auto industry "sales totaled $205 billion, or 3.3 percent of the total
Gross Domestic Product." (Tardiff 394) By the end of 19th century, there were about 500 auto manufacturers, but that number dropped sharply to 23 by 1917, and today the Big Three dominate the market. Ford, General
Motors, and Chrysler make up the Big Three which account for 23 percent of the worlds motor vehicle production in 1997, with the Japanese industries coming in second, producing 21 percent. Germany produces 9 percent, Spain, France, South Korea, and Canada each produce 5 percent of the international market in 1997. In the US alone, the auto industry, which includes its 500,000 car-related businesses, create 12 million jobs.
The automobile is clearly an oligopoly, but each companys control of the market has gradually diminished because of rising foreign competition. The
US has three main auto manufacturers, Japan has five major producers as does Germany. Each of these companies produce differentiated versions of the same product, have control over their products prices, and rely heavily on non-price competition. Each company produces a new line of cars for each model annually. There are many different types of cars, like sedans, station wagons, Sport Utility Vehicles (SUV), two-doors, and four-doors, but by comparing models between two competing companies, you can see how great the similarities are.
71 The auto industry can still thrive even though its products are so similar because the demand for cars is immense and continuous. People rely on cars for so many things that life without one seems impossible, especially in the US which registered 141 million cars in 1988, whereas
Japan, the second highest, only registered 30 million. The creation and production of a new car starts about three to four years before it is released to the public. The initial planning stage begins in the companys corporate headquarters with ideas for the car from product planners and company officials. Automotive designers draw prospective sketches of the new car, and once approved, model makers create small scale models of the car in fiberglass or clay, then forge life size models also in clay or fiberglass.
Automotive engineers then develop each part of the car, and mock- up builders create those indigenous parts of the new car. Test drivers check over the entire system, analyzing how it runs, and then gives suggestions on improving the vehicle. Automotive engineers test all the new, specialized parts of the car, and after all the parts are tested, plant engineers plan how to best mass-produce the new car. Of all the people working in the automobile industry, most will be found in this next industry which is the assembly plant. In the United States, the majority of these assembly plants can be found in the Michigan, Great Lakes area, and it, on average, takes about ninety minutes on the assembly line for an entire car to be produced.
When planning a new car model, the company tries to create what the consumer wants.
72 This is very difficult because as stated earlier it take between three and four years to develop a car. When General Motors begins developing a new product, it starts by assembling a new team to coordinate the production. After this team is assembled, millions of dollars are spent on dispensing and analyzing public surveys, private firms own research, government research, and past car sales to determine what the consumer wants. These specifications include physical dimensions, cost, fuel efficiency, comfort, market price, appearance, and performance. GM then would go on to begin producing the car. The most time consuming step when creating a new model is supplying the specialized pieces of the new model. Some of the parts can be carried over from previous models or other cars, but many times the company has to either create the new pieces themselves or buy them from a large scale supplier, like ITT
Automotive. The company then looks for the supplier that will supply the parts the cheapest.
After the model car has been created and approved, the plans are made for it to be made on the assembly line. The car is then ready to be sold to the public through private dealerships which, in the US, are not linked with any major automobile manufacturer. GM would then sell its cars to whichever dealership is willing to buy from them. In many Japanese firms, like Toyota, a new system has been created and has been coined lean production. The basic manufacturing ideas are the same, but it emphasizes developing relationships between the company and those it deals with.
73 When Toyota begins developing a new car model, it already has a team assembled which has worked on previous models. The Toyota team then collects the same information about what the public wants just like the
GM team but has a much cheaper way of going about it. Unlike the GM firm, Toyota has formed business ties with car dealerships, and in some cases even owns them. These dealerships use a new set of techniques to sell their cars, called "aggressive selling," in which a very permanent, personal, and hopefully life-long relationship is created between the company, the dealer, and the buyer. Since the company keeps ties to its consumers, it already knows what the consumer wants, and the consumer is more willing to buy from the company. Toyota continues developing and producing its car, and it comes across the same problem as the GM team of not having all the specialized parts it needs. Like with the dealerships,
Toyota has formed many symbiotic relationships with car part suppliers.
These suppliers work hand in hand, with the Toyota team and develop any products that Toyota needs for its new model.
The past decade has seen many interesting fluctuations within the automobile industry. Overall the auto industry fluctuates with the normal business cycle, for motor vehicles are an elastic demand to consumers.
The more the price for cars goes up, the less people buy cars. For many years, the automobile industry has seen very large profits because the demand and necessity for cars has increased significantly. Recently, large foreign competitors and steadily increasing prices in motor vehicles have reduced these surplus profits within the ...
74 75 Critical Analysis of Study
1. Which kind or segment of Car do you have?
25 30
45
Premium Utility Entry
76 2. Which company’s Car do you have?
25 35
10
30
Matuti Hyundai Honda Other
77 3. What is your main purpose of using a Car?
15 25
20
40
Personal Business Status Leisure
78 4. Which factor would you consider the most while buying a Car?
5 5
Fuel Eff. 15 35 Img. & Brd Resale V. Look & Stl. Mnt. 20 Av. of product
25
79 5. What are your main preferences while buying a Car?
15 20 Brand
10 Price Dealer's Adv. Features Service 25 20 Prom. Schemes
10
80 6. Which facilities would you expect while buying?
Low Price 10 25 10 Aft. Sale Srv. Incentives
Other 55
81 7. Which mode of payment would you prefer while buying a Car?
30
Lump-sum Installment
70
82 8. Are you satisfy with the after sales service by dealer?
15
Yes No
85
83 Scope of the Further Study
• At Sachin Hyundai customers are highly satisfied with the range of product
and sufficient colour choice availability.
• Customers are highly satisfied with the way products are displayed to them.
• Customers are satisfied with the kind of information provided to them about
different cars by the sales executives.
• Customers are satisfied with the kind of attention they get at Maruti
Showroom.
• Customers are satisfied with the type of test drive facility provided to them.
• Customers are satisfied by the way all the documents and services are
explained to them.
• Commitment of delivery of vehicle to its customers is appreciated by them.
• Customers are satisfied with the delivery process at Sachin Hyundai.
84 SUGGESTIONS
• Reception is the first point where customer will get the first impression about
Sachin Hyundai showroom and there need to be some improvements at
reception as customers are not properly attended over there.
• Maruti showroom at Bareilly should arrange more space for display
• Customers are not satisfied with the after sales services so there should be
some improvements in order to engage more customers.
• By improving their rest of the services they can convert their unsatisfied
customers into satisfied customers.
85 CONCLUSION
Car makers are making greater inroads into rural markets with industry majors reporting 50-100 per cent rise in sales in such regions in the current fiscal.
Market leader Maruti Suzuki's rural sales more than doubled to 1.16 lakh cars in April-December. Others such as Hyundai, GM and Mahindra & Mahindra have also seen higher growth.
For Maruti the share of rural sales this year increased to 16 per cent from 9 per cent last year.
Hyundai, the second major player, noticed that the shares of its tier-2 and tier-
3 markets' sales – largely rural and semi-urban – grew to 29 per cent from 23 per cent.
Both manufactures together hold 70 per cent of the Indian car market.
“We did better than the car industry in general, largely because of our rural focus. The contribution of rural India in our overall sales is growing year by year,” said Mr Mayank Pareek, Executive Officer, Maruti Suzuki.
Maruti has loosely classified areas beyond the top-80 cities as rural market and has been carrying out sales promotion activities in tie-up with schools, panchayats and local clubs.
Holding on to its rural focus, the company recently launched the multi purpose vehicle Eeco at an attractive Rs 2.6-3 lakh price range.
86 “Our sales in the top-10 markets have declined from 53 per cent to 46 per cent.
However, in tier-2 and tier-3, we are growing,” said Mr Arvind Saxena, Senior Vice-
President, Sales & Marketing, Hyundai Motor India Ltd.
The easy ride of car makers, whose combined sales this fiscal is 25 per cent up at 16 lakh units, has got a strong push from rural India and this bears testimony to the rising income in villages.
“The Indian car makers have identified a ‘prosperous rural customer segment',” said Mr Kapil Arora, Partner, Automotive Practice, Ernst and Young India.
“In relation to its size, rural India still remains largely under-penetrated, and clearly demand is growing there. Aspirations are growing along with rising prosperity. The macro-economic factors such as easy credit and improving road connectivity in interiors also contribute to the sales growth,” he said.
87 BIBLIOGRAPHY
• Hyundai Sales Training Handout
• www. Google.com
• www. Indianautomobileindustry.com
• www. Hyundai.co.in
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