1.

1 INDUSTRY PROFILE

The automotive industry in India is one of the largest in the world with an annual production of
23.96 million vehicles in FY (fiscal year) 2015–16, following a growth of 2.57 per cent over the
last year. The automobile industry accounts for 7.1 per cent of the country's gross domestic product
(GDP). The Two Wheelers segment, with 81 per cent market share, is the leader of the Indian
Automobile market, owing to a growing middle class and a young population. Moreover, the
growing interest of companies in exploring the rural markets further aided the growth of the sector.
The overall Passenger Vehicle (PV) segment has 13 per cent market share.

India is also a prominent auto exporter and has strong export growth expectations for the near
future. In FY 2014–15, automobile exports grew by 15 per cent over the last year. In addition,
several initiatives by the Government of India and the major automobile players in the Indian
market are expected to make India a leader in the Two Wheeler (2W) and Four Wheeler (4W)
market in the world by 2020.

Market Segmentation of Automobile Industry

TWO WHEELERS

THREE WHEELERS

COMMERCIAL VEHICLES

PASSENGER VEHICLES

0 20 40 60 80
Commercial
Passenger Vehicles Three Wheelers Two Wheelers
Vehicles
Series1 15.96 3.95 3.6 76.49

Automobile Technology in India

Automobile Technology or automotive technology refers to the technologies that are incorporated
in automobiles or vehicles. With the continuous advancement of technologies new inventions in
the field of automobile technology is only paving the way for more and more technologically
superior and sophisticated vehicles. Automobile technology is one of the most essential parts of
the automobile industry today. There are a number of vehicles available in the market all of which
require different technologies to support their smooth functioning.
Changes in Automobile Engines Technology
However the most important changes that has taken place in the automobile industry in India
pertains to the development of the engine. In the cars using petrol the carburetor engine has been
replaced by the Multi Point Fuel Injection (MPFI) engine. Similarly the engines running on
diesel have undergone a sea change from the time Rudolf Diesel to the Rail Direct Injection
(CRDI).
Multi Point Fuel Injection(MPFI)
This technology sticks to stricter auto emission norms and manages to squeeze out the maximum
benefit of the fuel by making optimum use of even the last drop of petrol or diesel
and providing the vehicle a good mileage.
Common Rail Direct Injection (CRDI)
If you have the benefit of a Common Rail Direct Injection engine fitted to your car you will know
that you have invested your money in the right place (CRDI) offers 25% more power than the
normal direct injection engine and also a soundless pick up with mileage of about 24 kilometers
to one liter of diesel.

Changes in Vehicles Technology

Along with the engine the vehicle has also undergone an enormous improvement in the form of:
Autopilot Cars:
Driverless cars also known as autopilot, autonomous vehicle or auto-drive car are intelligent
vehicles because of the simple fact that they drive themselves, to put it in a better way they
actually do not require drivers to drive them. These vehicles navigate the roads themselves and
give you a taxi experience.
Emission Standards:
With the help of the advancement in automobile technology a check can be put on the emission of
harmful pollutants like NO 2 , particulate matter (PM) or soot, carbon monoxide (CO) or volatile
hydrocarbons which would by far help to save the planet from global warming.
Automotive Engine:
Coming from the first steam engine built by Nicolas-Joseph Cugnot in 1769 the to the modern
day four stroke internal combustion engine, the automobile engine has survived a long journey. It
is simply the determination and power of the human mind that has kept improving the steam
engine and today excelled in making it a fast and smooth running engine.
Suspension Technology:
 The suspension system of a vehicle consists of springs, shock absorbers and linkages these together
connect the vehicle to its wheels. However the main function of the suspension system remains to
minimize jerks and to provide a smooth journey to its occupants
Apart from the above mentioned technologies steering technologies and safety technologies have
also helped the automotive industry to reach great heights.

Automobile Maintenance in India

Automobile Maintenance in India is one of the most necessary service related to the Indian
automobile market in India. All the vehicles need regular maintenance as only by this, one can
keep their vehicles secure. Moreover it also indicates the performance and longevity of the
vehicle.
Starting from car painting to looking after the auto-parts regularly, everything falls under the
policies of Automobile Maintenance in India. The automobile components directly related to the
performance of the vehicle. Some of the regular processes of Automobile Maintenance in India
are like checking the battery, changing the automobile oils, keeping a check on it, checking the
electrical system to identify a few of them.
Some of the most essential tips required for the owner and also the driver to follow seriously for
the well being of the vehicle and for a proper automobile maintenance in India are as under:
 to prevent deterioration of the engines, it is necessary for the engine to maintain the amount of
oil it receives, in order to prevent falling mileage
 to have an accurate knowledge of the fuse system which would save the vehicle from getting
stranded due to a blown fuse
 to focus the lights of the automobile properly
 to check the air pressure of all the tires regularly
 to change the water required for the engine
 to get the automobile serviced only at authorized and efficient service stations
 to check the engine oil level once every two weeks
 to check the coolant and water levels in the radiator and battery
 to use authentic and genuine spare auto parts always
 to provide the vehicle with anti-rust coating before the rainy season
Apart from these general tips on the automobile maintenance in India for safe drive the driver
should also follow some preventative automobile maintenance policies like to check the air-filter
every month, to be cautious while handling the battery, to check the brake fluid monthly, to get
the oil filter replaced with every oil change, and many others. To get a vivid idea about.

Top Automobile Companies in India

Tata Motors
Tata Motors is the largest automobile manufacturing companies in India. Established way back in
1945 Tata Motors is a multinational automobile company with its headquarters in Mumbai.
Previously known as Telco TATA Engineering and Locomotive Company Tata Motors belongs
to Tata Group. This company manufactures compact medium sized utility vehicles. Over the last
few decades it has stood as the undisputed leader in the commercial vehicles segment. It is also
the third largest producer of passenger cars in India. This automobile company in India is listed on
both the Bombay Stock Exchange and the New York Stock Exchange. The revenues earned by
Tata Morts in 2010 accounted to $20.572 billion. Some of the well known cars manufactured by
Tata Motors are: Tata Indigo, Tata Indica, Tata Sumo.
Hindustan Motors Limited
Hindustan Motors Limited was founded in the year 1942 by B.M Birla. It is an operative subsidy
of the Birla Technical Services group. This company held the title of the biggest manufacturer of
cars in India before Maruti Udyog. Hindustan Motors was the pioneer in manufacturing
automobiles in India. The company accounted for a sales turnover of Rs 150.66 crore in 2010.
Some of the important cars and multi utility vehicles manufactured by Hindustan Motors Limited
include; Mitsubishi Lancer, Trekker, Contessa, Ambassador, Porter.
Ashoke Leyland
Ashoke Leyland is a leading commercial vehicle manufacturer in India. It was established in 1948.
The company over the years has become synonymous with the production of trucks, passenger
buses and emergency military vehicles. It happens to be the second largest commercial vehicle
producer in India holding a market share of almost 30 percent. The company holds a record for
selling almost 60, 000 vehicles and almost 7000 engines per years. Ashok Leyland accounted for
consolidated revenues of US$ 1.4 billion in 2009. Some of the popular products by this company
are; Panther BS-II Muti-axle Vehicles, Cheetah Bus-III, Tractors and Ecomet, Lynx BS-II, Diesel.
Maruti Suzuki India Limited
Maruti Suzuki India Limited was established in 1981. A part of this company is owned by Suzuki
Motor Corporation of Japan. It is the country's largest passenger car manufacturing company.
Credited for having brought in the automobile revolution in the country Maruti Suzuki India
Limited was known as Maruti Udyog Limited till 2007. With its headquarters in Delhi this
automobile company in India happens to be the largest producer and market share holder of cars.
The company accounted for consolidated revenues of US$4.8 billion in 2010. Maruti Suzuki India
Limited is credited for manufactures a variety of passenger cars SUVs, and Sedans. Some of
Maruti's most popular cars are: Alto, Gypsy, Omni, Wagon R, Swift,800.
Hyundai Motor India Limited
Hyundai Motor India Limited (HMIL) is owned entirely by Hyundai Motors of South Korea.
Hyundai Motors happens to be the largest car manufacturer in South Korea and the sixth largest
in the world. This automobile company in India is also the largest passenger cars exporter in India.
Established on May 6 1996 this company in a short span of time has taken the Indian automobile
industry by storm. Some of the popular cars manufactured by this company are; Santro, Getz
Prime, Hyundai i10, Hyundai i20 Accent and the Verna and Sonata
Bajaj Auto
Bajaj Auto is another important automobile manufacturing company in India. It is one of the India's
most trusted car manufacturers. It is an operative subsidy of the Bajaj Group. Bajaj Auto happens
to be the largest two and three wheeler manufacturer in India and also ranks in this field across the
globe. This automobile company was established on 2 November 1945. The company was then
known as M/s Bachraj Trading Corporation Private Limited. The company made a modest
beginning by importing and then selling two and three wheelers in India. Today Bajaj Auto has
become synonymous with two and three wheelers in the country. Some of its popular two wheelers
are; Pulsar 220DTS and Kawasaki Ninja 250R.

Company Name Market share

Maruti 40%

Hyundai 13.88%

Tata Motors 13.12%

Mahindra and Mahindra 7.89%

Toyota 6.46%

Honda 3.91%

Chevrolet 3.75%

Ford 3.20%

Volkswagen 2.95%

Nissan 2.08%
Skoda 1.71%

Fiat 0.50%

Renault 0.50%

HM-Mitsubishi 0.18%
 1.2 COMPANY PROFILE

Maruti Suzuki India Limited, formerly known as Maruti Udyog Limited, is an automobile
manufacturer in India. It is a 56.21% owned subsidiary of the Japanese car and motorcycle
manufacturer Suzuki Motor Corporation. As of July 2018, it had a market share of 53% of the
Indian passenger car market. Maruti Suzuki manufactures and sells popular cars such as
the Ciaz, Ertiga, Wagon R, Alto, Swift, Celerio, Swift Dzire, Baleno and Baleno RS, Omni, Alto
800, Eeco, Ignis, g S-Cross. The company is headquartered at New Delhi. In May 2015, the
company produced its fifteen millionth vehicle in India, a Swift Dzire.

HISTORY
Maruti was established in February 1981 with production starting in 1983 with the Maruti 800,
based on the Suzuki Alto kei car. As of May 2007, the Government of India, through Ministry of
Disinvestment, sold its complete share to Indian financial institutions and no longer has any stake
in Maruti Udyog.

Chronology
Under the Maruti name
In 1970, a private limited company named Surya Ram Maruti technical services private
limited (MTSPL) was launched on 16 November 1970. The stated purpose of this company was to
provide technical know-how for the design, manufacture and assembly of "a wholly indigenous
motor car". In June 1971, a company called Maruti limited was incorporated under the Companies
Act. Maruti Limited went into liquidation in 1977. Maruti Udyog Ltd was incorporated through
the efforts of V. Krishnamurthy.
Affiliation with Suzuki

In 1982, a licence and joint venture agreement (JVA) was signed between Maruti Udyog Ltd,
and Suzuki of Japan. At first, Maruti Suzuki was mainly an importer of cars. In India's closed
market, Maruti received the right to import 40,000 fully built-up Suzukis in the first two years, and
even after that the early goal was to use only 33% indigenous parts. This upset the local
manufacturers considerably. There were also some concerns that the Indian market was too small
to absorb the comparatively large production planned by Maruti Suzuki, with the government even
considering adjusting the petrol tax and lowering the excise duty in order to boost sales. Finally,
in 1983, the Maruti 800 was released. This 796 cc hatchback was based on the SS80 Suzuki
Alto and was India's first affordable car. Initial product plan was 40% saloons, and 60% Maruti
Van. Local production commenced in December 1983. In 1984, the Maruti Van with the same
three-cylinder engine as the 800 was released and the installed capacity of the plant
in Gurgaon reached 40,000 units.

In 1985, the Suzuki SJ410-based Gypsy, a 970 cc 4WD off-road vehicle, was launched. In 1986,
the original 800 was replaced by an all-new model of the 796 cc hatchback Suzuki Alto and the
100,000th vehicle was produced by the company. In 1987, the company started exporting to the
West, when a lot of 500 cars were sent to Hungary. By 1988, the capacity of the Gurgaon plant
was increased to 100,000 units per annum.

Market liberalisation

In 1989, the Maruti 1000 was introduced and the 970 cc, three-box was India's first
contemporary sedan. By 1991, 65 per cent of the components, for all vehicles produced, were
indigenized. After liberalization of the Indian economy in 1991, Suzuki increased its stake in
Maruti to 50 per cent, making the company a 50-50 JV with the Government of India the other
stake holder.

In 1993, the Zen, a 993 cc, hatchback was launched and in 1994 the 1298 cc Esteem was
introduced. Maruti produced its 1 millionth vehicle since the commencement of production in
1994. Maruti's second plant was opened with annual capacity reaching 200,000 units. Maruti
launched a 24-hour emergency on-road vehicle service. In 1998, the new Maruti 800 was released,
the first change in design since 1986. Zen D, a 1527 cc diesel hatchback and Maruti's first diesel
vehicle and a redesigned Omni were introduced. In 1999, the 1.6 litre Maruti Baleno three-
box saloon and Wagon R were also launched.

In 2000, Maruti became the first car company in India to launch a Call Center for internal and
customer services. The new Alto model was released. In 2001, Maruti True Value, selling and
buying used cars was launched. In October of the same year the Maruti Versa was launched. In
2002, Esteem Diesel was introduced. Two new subsidiaries were also started: Maruti Insurance
Distributor Services and Maruti Insurance Brokers Limited. Suzuki Motor Corporation increased
its stake in Maruti to 54.2 per cent.

In 2003, the new Suzuki Grand Vitara XL-7 was introduced while the Zen and the Wagon R were
upgraded and redesigned. The four millionth Maruti vehicle was built and they entered into a
partnership with the State Bank of India. Maruti Udyog Ltd was Listed on BSE and NSE after a
public issue, which was oversubscribed tenfold. In 2004, the Alto became India's best selling car
overtaking the Maruti 800after nearly two decades. The five-seater Versa 5-seater, a new variant,
was created while the Esteem was re-launched. Maruti Udyog closed the financial year 2003-04
with an annual sale of 472,122 units, the highest ever since the company began operations and the
fiftieth lakh (5 millionth) car rolled out in April 2005. The 1.3 litre Suzuki Swift five-door
hatchback was introduced in 2005.

In 2006 Suzuki and Maruti set up another joint venture, "Maruti Suzuki Automobiles India", to
build two new manufacturing plants, one for vehicles and one for engines. Cleaner cars were also
introduced, with several new models meeting the new "Bharat Stage III" standards. In February
2012, Maruti Suzuki sold its ten millionth vehicle in India. In July 2014 it had a market share of
more 45%.

Joint Venture and related issues

Relationship between the Government of India, under the United Front (India) coalition
and Suzuki Motor Corporation over the joint venture was a point of heated debate in the Indian
media until Suzuki Motor Corporation gained the controlling stake. This highly profitable joint
venture that had a near monopolistic trade in the Indian automobile market and the nature of the
partnership built up till then was the underlying reason for most issues. 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. In 1982, both the venture partners entered into an agreement to nominate
their candidate for the post of Managing Director and every Managing Director would have a
tenure of five years

Manufacturing Facilities

Maruti Suzuki has three manufacturing facilities in India. All manufacturing facilities have a
combined production capacity of 1,700,000 vehicles annually. The Gurgaon manufacturing
facility has three fully integrated manufacturing plants and is spread over 300 acres (1.2 km2). The
Gurgaon facilities also manufacture 240,000 K-Series engines annually.

The Manesar manufacturing plant was inaugurated in February 2007 and is spread over 600 acres
(2.4 km2). Initially it had a production capacity of 100,000 vehicles annually but this was increased
to 300,000 vehicles annually in October 2008. The production capacity was further increased by
250,000 vehicles taking total production capacity to 800,000 vehicles annually. The Manesar Plant
produces the Alto 800, Alto K10, Swift, Ciaz, Baleno, Baleno RS and Celerio. On 25 June 2012,
Haryana State Industries and Infrastructure Development Corporation demanded Maruti Suzuki to
pay an additional Rs 235 crore for enhanced land acquisition for its Haryana plant expansion. The
agency reminded Maruti that failure to pay the amount would lead to further proceedings and
vacating the enhanced land acquisition. The launch of the Dzire happened in the month of May
2017 and the variant is said to have good mileage

The Gujarat manufacturing plant became operational in February 2017. The plant current capacity
is about 250,000 units per year. But with new investments Maruti Suzuki has plan to take it to
450,000 units per year.

In 2012, the company decided to merge Suzuki Powertrain India Limited (SPIL) with itself. SPIL
was started as a JV by Suzuki Motor Corp. along with Maruti Suzuki. It has the facilities available
for manufacturing diesel engines and transmissions. The demand for transmissions for all Maruti
Suzuki cars is met by the production from SPIL.

Products and Services

Current models

Model Launched Category Image

Omni 1984–present Minivan

Gypsy King 1985–present Mini SUV

WagonR 1999–present Hatchback

 Swift 2005–present Hatchback

DZire 2008–present Sedan

Ertiga 2012–present Mini MPV

Alto 800 2012–present Hatchback

Celerio 2014–present Hatchback

Ciaz 2014–present Sedan

Baleno 2015–present Hatchback

 S-Cross 2015–present Mini SUV

Vitara Brezza 2016–present Mini SUV

Ignis 2017–present Hatchback

Discontinued models

Model Launched Discontinued Category Image

800 1983 2010 Hatchback

Gypsy E 1985 2000 Mini SUV

1000 1990 2000 Sedan

Zen 1993 2003 Hatchback

Esteem 1994 2010 Sedan

Baleno 1999 2007 Sedan

Alto 2000 2012 Hatchback

Versa 2001 2010 Minivan

Grand Vitara XL7 2003 2007 Mini SUV

Grand Vitara 2007 2015 Mini SUV

Zen Estilo 2007 2013 Hatchback

 A-star 2008 2014 Hatchback

SX4 2008 2014 Sedan

Swift Dzire 2008 2017 Sedan

Ritz 2008 2016 Hatchback

Kizashi 2011 2014 Sedan

Sales and service network

Maruti Suzuki has 1,820 sales outlets across 1,471 cities in India. The company aims to double its
sales network to 4,000 outlets by 2020. It has 3,145 service stations across 1,506 cities throughout
India. Maruti's dealership network is larger than that of Hyundai, Mahindra, Honda, Tata, Toyota
and Ford combined. Service is a major revenue generator of the company. Most of the service
stations are managed on franchise basis, where Maruti Suzuki trains the local staff. Other
automobile companies have not been able to match this benchmark set by Maruti Suzuki. The
Express Service stations help many stranded vehicles on the highways by sending across their
repair man to the vehicle.

NEXA
In 2015 Maruti Suzuki launched NEXA, a new dealership format for its premium cars.
Maruti currently sells the Baleno, Baleno RS, S-Cross, Ciaz and Ignis through NEXA outlets. S-
Cross was the first car to be sold through NEXA outlets. Several new models will be added to both
channels as part of the Company's medium term goal of 2 million annual sales by 2020.

Maruti Insurance
Launched in 2002 Maruti Suzuki 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 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 Suzuki launched Maruti Finance in January 2002. Prior
to the start of this service Maruti Suzuki 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 Suzuki tied up with ABN Amro Bank, HDFC Bank, ICICI Limited, Kotak Mahindra,
Standard Chartered Bank, and Sundaram to start this venture including its strategic partners 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 India.

Citicorp Maruti Finance Limited is a joint venture between Citicorp Finance India and Maruti
Udyog Limited its primary business stated by the company is "hire-purchase financing of Maruti
Suzuki vehicles". Citi Finance India Limited is a wholly owned subsidiary of Citibank Overseas
Investment Corporation, Delaware, which in turn is a 100% wholly owned subsidiary of Citibank
N.A. Citi Finance India Limited holds 74% of the stake and Maruti Suzuki holds the remaining
26%. GE Capital, HDFC and Maruti Suzuki came together in 1995 to form Maruti Countrywide.
Maruti claims that its finance program offers most competitive interest rates to its customers,
which are lower by 0.25% to 0.5% from the market rates.

Maruti TrueValue
Maruti True service offered by Maruti Suzuki to its customers. It is a market place for used Maruti
Suzuki Vehicles. One can buy, sell or exchange used Maruti or Non Maruti vehicles with the help
of this service in India. As of 10 August 2017 there are 1,190 outlets across 936 cities.
N2N Fleet Management
N2N is the short form of End to End Fleet Management and provides lease and fleet
management solution to corporates. Clients who have signed up of this service include Gas
Authority of India Ltd, DuPont, Reckitt Benckiser, Doordarshan, Singer India, National Stock
Exchange of India 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 Accessories
Many of the auto component companies other than Maruti Suzuki started to offer components
and accessories that were compatible. This caused a serious threat and loss of revenue to Maruti
Suzuki. Maruti Suzuki started a new initiative under the brand name Maruti Genuine
Accessories to offer accessories like alloy wheels, body cover, carpets, door visors, fog lamps,
stereo systems, seat covers and other car care products. These products are sold through dealer
outlets and authorized service stations throughout India.

Maruti Driving School

As part of its corporate social responsibility Maruti Suzuki launched the Maruti Driving School in
Delhi. Later the services were extended to other cities 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.

At the launch ceremony for the school Jagdish Khattar stated "We are very concerned about
mounting deaths on Indian roads. These can be brought down if government, industry and the
voluntary sector work together in an integrated manner.

Awards and Rewards

The Brand Trust Report published by Trust Research Advisory, a brand analytics company, has
ranked Maruti Suzuki in the thirty seventh position in 2013 and eleventh position in 2014 among
the most trusted brands of India
 1.3 ORGANISATIONAL STRUCTURE

Organization Structure Design At Maruti Suzuki

Maruti has a functional organizational structure with horizontal linkages. The activities are divided
based on the following functions finance, marketing, engineering and sales, spares, production,
material, parts inspection, quality assurance, human resource development, information
technology, new business and administration, The centralization is very low in Maruti as the
decision-making authority is quiet decentralized and disturbed across all levels. it is a very big
organization and further divided into smaller divisions. There are 29 divisions in Maruti and are
headed by one divisional head which is a functional post. These divisions are divided into 132
departments and which are headed by one departmental head which is again a functional post. In
Maruti the formalization is very high all the methods, procedures, standards are written down
formally. All the departments have department procedures which describe the role of work of the
department as well as their responsibilities and work flow. The procedures are approved by
divisional head and are also available for the concerned departments. In production shops the
standard operating procedures are displayed on the workstations and are known as Maruti
Operations standards.
The structure of Maruti is flat .Generally the employees are divided into six functional heads
namely workers and technicians, supervisors, executives, section manager, department manager
and division manager.
Changes in structure
In view of increasing competition the automotive sector Maruti has tried to use a project based
structure to handle the problems effectively. Around two year back in meeting of senior and middle
level executives to form teams which would focus on specific goals. Around 30 teams of about 8-
10 members are formed. These teams have specific mandates in terms of cost reduction and new
product development and were given resources and authority in order to implement the project.
Organization structure at Maruti
The organization structure of Maruti is somewhat inclined towards a mechanistic structure but it
cannot be called absolutely because of presence of high degree of decentralization. It has a
functional structure with horizontal linkages. The functional divisions finance, marketing, sales
focus on their respective functions. These divisions are further divided into 29 divisions. The
hierarchy consists of a divisional head and then a departmental head.
Mechanistic structure is suitable for those organizations which do not require frequent changes in
their processes and the environment is stable.
Features Of Organization Structure at Maruti
The division of employees at six functional levels and their further hierarchical divisions in
different divisions mean that the company wants to achieve perfection at each functional level.
Their production is car and production occurs on a large scale , it includes assembly line in which
parts are added to a product in a sequential manner using optimally planned logistics to create a
finished product.
The environment in the automobile sector is almost stable and hence the flexibility in the structure
is not required.
Each functional department tends to get perfection at its level. At horizontal level it involves cross
functional teams and sometimes direct contact in the form of a coordinator from each department
who can communicate the progress in their respective department.
Each function is separate at functional level and communication and co-operation among functions
are responsibility of someone at the top hierarchy.
Communication is mostly vertical from department to division and then directors.
Main decisions are taken by directors in respective functional divisions.
All these feature are in line with the mechanistic structures which are economies to scale, and are
designed to induce people to behave in accountable ways.

Maruti has a Flat and Decentralized structure

Structural elements
Specialization
As the Maruti have functional structure and division of labour so there is high degree of
specialization.
Centralization
Power is distributed within the hierarchy because there are various persons who play a very crucial
role in the organization.
Formalization
The instructions, procedures are written down formally in the organization and on the other hand
departments have their own formal procedures of doing work in an organization so that they can
achieve their objectives on time.
Complexity
Complexity arises because of structural complexity as there is goal incompatibility between
different departments.
Span of control
The span of control is generally at the top level is 3-6, 4-8 at the middle level management and 0-
8 at the lower level management. In production level at lower level the span of control is at40-50.
Problems faced by Maruti in the organization structure
Lower level managers take decisions understanding the big picture. While the top level managers
have low information about the local operations as compare to lower level managers.
In decentralization organization there is lack of co-ordination among the managers. This can be
reduced by defining the company policy and communicating throughout the organization.
Lower level managers have objective that are different from the objectives of the entire
organization. For example some mangers are interested in increasing the size of departments as
compare to profits. This problem can be overcome by defining the performance appraisal which
helps the managers in defining their problems.
It may be difficult to tell about innovative ideas in a decentralized organization. Someone in the
organization have the great idea which provide benefit to the organization but without a strong
central direction the idea cannot be shared with and adopted by others in the organization.

Flaws in the organization structure

The main flaw is that the employees are facing inter departmental friction in many areas-
Parts inspection vs. engineering
The Parts inspection department would consider the quality of existing and new products. On the
other hand managers in the Engineering department want to reduce cost by localizing the resources
or parts. The process of localization requires the sanction of parts inspection department and this
causes a conflict between both departments.
Marketing vs. others
The Marketing department mainly focuses on that the customer expectations with the company are
met or not. However the recommendations that it suggests are not communicated to the other
departments that is engineering. For Example- After analyzing the data from the customers surveys
the marketing department suggests that the audio systems in Maruti would be of the Blaupukt
barnd. This was turned down however Suzuki had formed a tie up with Pioneer to use its audio
systems.
Quality vs. Others
The role of the quality department mainly brings this department into conflict with other
departments mainly production and engineering departments. When the quality department
declares that the certain product or process is not matching with the quality requirements, the
concerned department who has not maintains quality will always protest against it as most of the
times such tests are marginal.

Changes in structure
Rewards
Rewards and compensation should be evaluated on a regular basis so that and which leads to
greater linkage to the employee performance and which also leads to increase the goodwill of the
company.
People
Frequent interactions with the different departments helps to resolve the problems if any in the
organization.
Processes
There should be more focus on quality assurance as they only focus on very stringent other
techniques.
Strategy
There strategy should be focused on more on changing needs of the customers and also the
changing scenario of the industry.
Structure
As the Maruti is following presently functional structure which has various conflicts in it so Maruti
has to change its structure according to their requirements so that there is no conflicts in future and
so that they will able to achieve organizational objectives efficiently and effectively.
One major point is that there is a need of horizontal integration between the various departments
at departmental level is required .The hierarchical level is is to be reduced because the level of
employees are quiet diversified which created a complicated hierarchy.
Conclusion
Maruti has been successful if the company will be able to get the comparative advantage .the flat
decentralized structure and the importance given to the employees go a long way in creating
harmonious and good working environment where everyone focuses on achieving the objectives
of the organization efficiently and effectively so the company can able to achieve profits in future.
 1.4 Review of Literature

Abhijeet Singh and Brijesh Kumar (2011) Hero Honda Motors Ltd, is running a program called
Good life Passport to Relationship Reward, with an objective to create an innovative
environment for interaction between Hero Honda and its customers. Members of this program
are given a magnetic card in which all information is stored and this card is swiped when using
any service at a showroom or workshop and it works like a loyalty benefit card.

Abhijeet Singh (2011) Tata Motors uses a customer relationship management and dealer
management system (CRM-DMS) which integrates one of the largest applications in the
automobile industry, linking more than 1200 dealers across India.CRM DOS has helped Tata
Motors to improve its inventory management, tax calculation and pricing. This system has also
proved to be beneficial to dealers because it has reduced their working capital cost.

Arvind Saxena (2010) Director and Board member (marketing and sales), Hyundai Motor
India (HMIL) “No company in automobile sector can fight competition on price. Companies
need to have the right product, distribution, CRM and after sales service network to grow.

Biswajit Mahanty and Virupaxi Bagodi (2006) The success of two wheeler manufacturers in
India depends on the competitive advantage gained by them through after sales service and
providing and maintaining customer satisfaction in the face of rapid changes in technology is
a difficult task, which can be overcome by timely addition of capacity and upgrading of
technical manpower and focusing on the CRM programs.
More than 55 million two-wheelers are moving on Indian roads. Accordingly, two-wheeler
service sector should have generated revenue amounting to INR 100,000 million per year, but
in reality, this has not been realised in the organised service sector, the Indian two-wheeler
service industry has not considered servicing as a line of business and providing conveniently
reliable services is most important in two-wheeler services in India to capture the market.
It is an era of customer delight for the two wheeler industry and the conventional measures
implemented by the service organizations tend to be inadequate to attract customers persistently.

Gordon Fullerton (2006), “Putting relationship in CRM”, that JEEP, a division of Daimler
Chrysler Automobile Company, has served a classic example of CRM program that provides a
considerable value to both the customers and the firm by developing a program exclusively for
jeep owners and fostered a community that is highly effectively committed to the product, the
brand and the customers.

Kevin Keller (2012) Caterpillar has become a leading firm by maximizing the total customer
value with the help of effective CRM , best after sales service in the industry and better trained
dealer. This allows the firm to command a premium price of 10% to 20% higher than competitors
such as Volvo, Komatsu etc.

Michael Cusumano, Steve Kahl and Fernaando Suarez (2008) in their research paper “A theory
of services in product industries”, has concluded that in many product oriented industries,
services have become increasingly important. In case of automobiles, many automakers generate
the vast majority of their profits from a service activity closely tied to their product activity. The
automobile industry overall generates a large portion of its profits from other product-related
service activities such as insurance and repairs. The authors argued that despite the seeming
importance of services, there is not much theory to help researchers or practitioners explain the
conditions under which services matter in product industries. The general view that emerges from
the services literature is that services tend to become important for manufacturing firms once
their industries reach a mature stage.

Milind Bade (2011) GM-Marketing, Bajaj Auto, has mentioned that Bajaj Auto Limited is
currently trying to move the industry from a commuter to a biker mindset and at present the
focus of the company is on keeping the sub brands and the mother brand different and the main
motive behind establishing individual brand is to create differentiation which would help Bajaj
auto, as an organization to develop relationship easily with its customers.

Mona J Fitzsimmons (2010) has concluded that the profitability of automobile manufacturers
depends on exploiting value added services for instance automobile manufacturers have
discovered that financing and after sales service can achieve significant profits.

Oyama (2012) Honda Motor wants to be number one in the Indian market and the company
wanted 30% of Honda’s global sales to come from Indian operations by 2020. HMSI have had
issues related to production in the past with most of its models having the longest waiting period
in the country, this reduced in Honda’s penetration in the rural market, which is less than a third
of Hero Moto Corp.
Pawan Chabra (2011) Nowadays every second bike sold in the premium segment is a pulsar and
this shows the dominance of Bajaj in the Indian market place, this was possible because the
company has been regularly making the alterations to make the motorbike look fresh at all times
and Bajaj today holds over 50% market in the premium segment (for FY 2010-2011) followed by
a distant second largest player Honda Motorcycle & scooter India with a 19% market share. He
has mentioned that the death knell off Bajaj’s scooters business was sounded when the company
officially stopped the production of its flagship Chetak in December 2002, to get cracking on its
ambition of becoming a credible motorcycle brand manufacturer, the company invested big in
R&D and product development, but the company faced challenges in the sales and distribution
because their dealers had little idea how to sell motorcycles, so the entire dealership network was
trained to sell motorcycles.

Philip Kotler (2012) Harley – Davidson dealers ranging from the CEO to the sales staff,
maintain personalized relationships with customers through face to face and social media
contact. Knowing customers as individuals and conducting ongoing research to keep up with
their changing expectations and experiences which helps Harley – Davidson to define their
customers needs better.

R K Garg (2011) CRM requires a seamless, single view of the customer with consistent cross-
channel interaction models and it is recommend that companies bundle all internal CRM
strategies into one comprehensive multi-channel strategy. More over if the two wheeler
manufacturer integrate CRM with SCM, then product design and production planning can be
aligned with the customer information available, to increase customer loyalty.

S.Saravan, N Panchanathan and S Pragadeeswaran (2009) concluded in their research paper

“Markets and Consumers- Consumer Behavior Towards Showroom Services of Two-Wheeler
with reference to Cuddalore District” that students and employees are more satisfied about
showroom service and age of consumer is an important factor while choosing the brand of bike
and all the consumers give importance all factors relating to buying a vehicle.
Shashank Srivastava (2012) GM Maruti Suzuki has mentioned that the consumer is price
conscious and the brand loyalty is diminishing because of the number of options in each segment
moreover the customers are ready to experiment today.

Steve Kahl and Fernaando Suarez (2008) in their research paper “Product, Process, and Service:
A New Industry Lifecycle Model”, has concluded that Existing models of industry lifecycle
evolution tend to focus on changes in the products and processes and largely overlook the
dynamics of services, but increasingly, the revenues of many firms are becoming dominated by
sales of services rather than products, or products sold with services to gain competitive
differentiation in markets marked by increasing product commoditization.

Susan Suffes (2006) Audi (UK), a leading manufacturer in the prestige automobile market
implemented CRM successfully and this helped Audi to develop a model to drive growth and
engineer a dramatic turnaround by creating a superior customer experience.

V.G. Ramakrishnan (2003) The vehicle servicing business in India is undergoing a

transformation. In early days, the servicing needs of the vehicles were undertaken mostly by
roadside mechanics and a few organized workshops. Companies need to focus on building a chain
of authorized service stations covering the entire country to service its vehicles. As the competition
in the market has intensified and profit margins squeezed, companies need to view servicing as a
money spinner for the entire operation. In the recent years, other players have entered in the field
and the creation of national chain of organized workshops is underway and that is likely to change
the nature of vehicle servicing market in India. The two-wheeler market that has seen an explosive
rise in sales over the last few years which created an opportunity for various companies to enter
the after sales business of two wheeler, Castrol, a company well known for its lubricants, has
entered into the motorcycle servicing business with the roll out of its first workshop 'Castrol
PrimaZona' and have plans to have pan India presence.CRM is not merely the response of the
times, but the necessity of the time as well it is the effective CRM which converts buyers into
profitable customers and then builds relations and retains them as a customer for life.
 About the Topic
A STUDY ON CUSTOMER PREFERANCE ON NEXA
Premium segment cars is broader than brand personality in real. A well-established brand has a
clear brand personality. It may remain unstated. But it can play a strategic role in brand ware.
Closely position brands may also acquire distinct personalities as a result of exposure to the
quality of the product, attraction in packing, service at the time of sale and after sale, word-of-
mouth and advertising strategies adapted by the company. Premium segment vehicles is thought
as being friendly, funny, caring stylish etc. consumer need to think of brands in human terms.
The ability of a brand personality comes through consistency.

Importance of the Study

Now a day’s all have used two wheelers. More than two members cannot travel in two wheeler.
So, for comfortable and family raiding people may often prepare cars

There are two types of situations

1. Consumption
2. Purchases situation
Consumption situation is the anticipated usage situation. It is the circumstance which prevails at
the actual place of consumption. In includes what is consumed? Where it is consumer? And by
whom it is consumed. Like consumption situation purchase situation also influences buyers brand
choice behaviour. It refers to the situation that is particular to the place where actual purchases are
being made.

Objectives
The overall objective of the study is to analysis the consumer preferences on NEXA.
The main objectives of the study are.
1. To study about consumer preference on brand
2. To study the socio-economic status of the consumer towards cars
3. To study out the reasons for the choice of cars.
4. To analysis the availability of car loans while purchasing of a car.
5. To understand the importance of media in choosing car
2. RESEARCH OBJECTIVES

2.1 Primary Objective

To Measure the satisfaction levels of consumers on various products and brands to find the
purchase behaviour of them

2.2 Secondary Objective

a) To study demographic profile of consumers.

b) To study factors affecting buyers decision.
c) To study most widely used product category among customers.
d) To study purchase pattern of customer.
e) To study brand preference for automobile industry.