Maruti Suzuki India Limited (MSIL) has been India's leading automobile manufacturer and market leader in terms of volume of vehicles sold and revenue earned. MSIL is a subsidiary of Japanese auto maker Suzuki Motor Corporation with the alliance dating back to 1980s. Most of MSIL's products have been benchmarks in their respective segments, ranging from entry level small cars to Multi-Purpose and Sports Utility Vehicles. The product line-up of the car maker includes Alto, Ritz, A-star, Swift, Dzire, SX4, Ertiga and Grand Vitara, among others.
MSIL enjoys such a concrete repertoire among Indians that regardless of the immense market competition from the likes of Hyundai, Tata, Ford, Nissan, Toyota, Honda, etc. the company enjoys decent and respectable sales. This year in February, the company announced the sale of its ten millionth vehicle in India. Its market dominance to a certain degree is due to its heritage and for offering one of India's best after sales service. Maruti Suzuki's service network spans 1,395 towns and cities throughout India, involving 2,946 Maruti Authorised Service Stations and dealer workshops. The after sales service is a major revenue puller for the company with other automobile companies failing to match the benchmark set by Maruti Suzuki.
Past few months have not been very beneficial for the company. The much publicised Manesar facility's recent violence resulted in the unfortunate death of a senior HR executive and left about a hundred workers and two Japanese executives injured. The plant, which produces MSIL's best selling hatchback Swift and sedan Dzire, faced an indefinite lockdown, costing the company loss of over Rs. 75 crores everyday. The violence which spread out due to wage related issues between Maruti Suzuki Workers Union and the Management has been the worst chapter in the company's history since it began operation in 1983.
The incident may not have occurred at a worse time to pile on to the company's already rising problems. The Indian car industry is facing its worst phase of years due to dropping sales with ever increasing production costs. The intense competition has been preventing car makers from increasing their prices, which has further piled on miseries for them. Reportedly, Maruti's Manesar facility lockout inspired its competitors to push its sales. Hyundai being Maruti's biggest rival asked its dealers to boost sales efforts to cash in on Maruti's much publicised meltdown.
MSIL's Manesar facility is expected to restart its operations from August 21st, this at 10 per cent of its average daily production. The car maker's most popular offerings, the Swift hatchback and Dzire sedan already had more than six months waiting time before the lockout. This translates into around two lacs units pending delivery, indicating the popularity of the models with the Indian masses. These cars from MSIL have managed to strike a chord with the Indian buyers plainly due to the value for money proposition that these offer, coupled with best-in-class performance and global standards in their design and build.
More delay in the Manesar plant will pose significant problems for the company as the Indian festive season is just round the corner, when every car maker goes great lengths to inspire customers by slashing its price and promising goodies & freebies. The Indian festive season is usually the period when the car sales are its peak with several car makers benefiting from it. MSIL will aspire to reclaim its lost glory and hit the bull’s-eye again this year.
