Case study # 2
Before independence the Indian car market was considered as a market for imported vehicles. The earlier period was very tough for growth of Indian automobile sector due to strict licensing, restrictive tariffing structure. With an objective to modernize the Indian automobile Industry Maruti Udyog Limited was incorporated in February 1981. In October 1982 the company signed license and Joint venture agreement with Suzuki Motor Corporation of Japan. After collaboration, in December 1983, the company launched its most awaited Maruti 800. The company launched its multi purpose vehicle; Omni in November 1984. ...view middle of the document...
There was no R&D department in India and the main focus was to produce a small car at a reasonable price within the reach of middle class Indian. There was commitment to target delivery. There was a lot of focus on distribution. The employees had a freedom to innovate and a lot of avant-garde work was done.
The market share was approx. 80 %
There were whole lot of challenges for the MUL in the 90’s. The market situation was gradually changing. With the lot of new competitors jumping inn, ( Hyundai, Toyota, Tata and others) the market share rapidly start falling. There came the whole new attractions for the customers with low cost financing and easy payments. The car prices were reduced with the excise duties reduction. This was the critics predicted the fall of MUL because of its farewell to monopoly.
New Strategies were introduced to counter the market situation .With more liberalized approach as compared to the conservative approach. The focus was changed from distribution to product diversification. Between the period of 1998 to 2001 there were 5 new models of car were introduced.
The network was expanded by opening new dealerships across the whole country. The priorities of MUL were revised to that of customer, profit and new recruitment.
As the competition in the market segment was increasing there were whole new lot of challenges that were emerging. There was no import of new technology as the R&D was only conducted in the Suzuki motor corporation in japan. There was no growth oriented planning at all.
The transition to new millennium.
The millennium started with some major economic slump. The loss of $ 41.54 million as compared to the profit of $44.60 million of 1999-2000. If that was not enough the organization faced labor strike for high –remunerations. After three and a half month strike the company introduced the...