How Suzuki Entered Into The Indian Automobile Industry?

Maruti Suzuki is ruling the Indian Automobile Industry for the past 39 years. It has been the first choice of most of the Indian customers.

It is India’s largest passenger car company, accounting for over 50 percent of the domestic car market.

The name of the company comes from the combination of both words Maruti and Suzuki. Maruti is the name of the Hindu God Hanuman and Suzuki is the Japanese auto manufacturing company.

In this article, we will look upon the Inception of Maruti Suzuki in India, its ownership structure, and the products and services offered by them.

History

After Independence from the British, Indians were regaining their glory and looking out ways to lead an elegant lifestyle.

Auto manufacturing companies like Hindustan premier and Padmini dominated the Indian Automobile Industry. But those were a luxury during that time and an average middle-class person can’t afford them.

It all started in the year 1971 when then government proposed the production of people’s car for an average middle-class Indian.

In the month of June, Maruti Motors was incorporated under the company act, and Sanjay Gandhi was made the Managing Director. But for political reasons and the situation of the country the government couldn’t focus on Maruti.

Finally in the year 1981 after the death of Sanjay Gandhi, Maruti Udyog was incorporated and started functioning effectively.

For the collaboration with Maruti Udyog, both Volkswagen and Suzuki were approached.

But when Suzuki came to know that it was in competition with Volkswagen for the partnership. Suzuki did everything to throw Volkswagen out of the race to produce India’s first people’s car.

Inception

In October 1982, Maruti Udyog merged with Suzuki and Maruti Suzuki was formed.

The same year, a production facility was also set up in Gurgaon, Haryana.

In the beginning, the goal was to use 33% indigenous parts which upset the local manufacturers. There were also concerns that the Indian market was a bit small to absorb the large production by Maruti.

Even at a point in time, the government was also considering adjusting the petrol tax and excise duties with the intention to boost sales.

In the year 1983, Maruti Suzuki launched Maruti 800, which changed its fate in the Indian automobile Industry. It became an instant hit.

Its popularity grew to an extent that in the mid-1980s the car Maruti 800 became synonymous with the company Maruti Suzuki.

Post Market Liberalization

By 1991, 65 percent of the components, for all vehicles produced, were made in India.

After the liberalization of the Indian economy in 1991, Suzuki increased its stake in Maruti to 50 percent.

Right from the beginning, Maruti brought to India, its Japanese philosophy ‘smaller, fewer, lighter, shorter and neater’.

From the Japanese work culture, they implemented simple practices like an open office, a common uniform, and a common canteen for everyone, daily morning exercise, and quality circle teams.

In India, from the very beginning, Maruti Suzuki was made for middle-class people.

People also bought Maruti for its affordable price and low maintenance cost. But, Maruti Suzuki decides to break and launch some luxury vehicles into the Indian market with its Suzuki Grand Vitara XL-7 and Suzuki Kizashi.

Both of the luxury vehicles failed in India and they were removed from the Indian market.

In the year 2015, New Exclusive Automotive Experience or the NEXA platform was introduced by the company to launch premium cars in India.

Introducing a brand for premium cars was a wise choice as the company failed to attract customers through the normal channel.

More than half of vehicles sold in India are of Maruti Suzuki. As of July 2018, it had a market share of 53% of the Indian passenger car market.

Maruti Suzuki exports across the globe to over 100 countries and the focus has been to identify new markets. Some important markets include Latin America, Africa, and Southeast Asia.

Ownership Structure

Maruti Suzuki was born as a government company, with Suzuki as a minor partner, to make a people’s car for middle-class India.

Over the years, its product range has widened, ownership has changed hands and the customer has evolved.

The success of the joint venture led Suzuki to increase its equity from 26% to 40% in 1987, and to 50% in 1992, and further to 56.21% as of 2013.

As of today, Maruti Suzuki is a 56.21% owned subsidiary of the Japanese automotive manufacturer Suzuki Motor Corporation.

Other Products And Services

Along with the automobile manufacturing business, Maruti Suzuki provides its other services and products such as Maruti Insurance, Maruti Finance, Maruti True Value, Maruti Driving School, etc.

In 2020, Maruti Suzuki has announced a new subscription program named as Maruti Suzuki Subscribe across Delhi, NCR and Bengaluru. This program allows customers to use new Maruti cars without actually owning it.

Conclusion

In this article, we have discussed the Maruti Suzuki, how it got started, its ownership structure, and the other products and services offered by it.

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