A

PROJECT REPORT
ON

“ JOINTVENTURE BETWEEN

”
SUBMITTED FOR PARTIAL FULFILMENT
OF THE DEGREE OF BACHELOR OF COMMERCE
2017-19

SUBMITTED BY :- SIBANARAYAN DASH

+3 3RD YEAR COMMERCE (ACCOUNTING HONS)

Roll NO. – BC17-013

Exam Roll NO. – 1703010190160006

UNDER THE GUIDANCE OF

Dr. Jadabananda Panda

HOD,Department of Commerce

SRI JAYADEV COLLEGE OF EDUCATION AND TECHNOLOGY, NAHARAKANTA ,

Sign of internal sign of external

1|Page
DECLARATION

I “SIBANARAYAN DASH” do hereby declare that the study report

submitted by to the department of commerce, Sri jaydev college of
education and technology, naharakanta is nothing but the outcome
my project work study on “jointventure between maruti Suzuki” at
the data analytical statement being stated in the project that is
submitted by me accepted as fully authenticate and genuine. The
finding and observation are a part of authenticate work.

SIBANARAYAN DASH
+3 3 RD Year commerce
Roll no. – Bc17-013
Exam Roll No. – 1703010190160006

CERTIFICATE
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This is to certify that sibanarayan dash of +3 3 rd year commerce
, bearing roll no. BC17-013 and of Sri jaydev college of education and
technology , naharakanta has successfully prepared his project on
“joint venture between MARUTI SUZUKI” under my guidance and
direct supervision . he has personally taken the pain to complete this
study work in time I wish to get all success in his life .

Place: Signature of the guide

Date:

3|Page
ACKNOWLEDGEMENT
With much pride and delight acknowledgement my heartfelt since of
gratitude and ineptness to Mr. Jadabananda Panda ,H.O.D. of
department of commerce of Sri jaydev college of education and
technology for his valuable guidance , supervision and inspirable
encouragement . he has spare must of his invaluable time on
discussion , pertaining to various aspects of study report .

I am grateful to other faculty members of the department for

their help in rightful comments and helpful research methods .

Last, but not the least, I am grateful to my friends and all person
who have rendered there valuable helps directly or indirectly in the
competition of the seminar report.

Name: Sibanarayan Dash

Roll No.: BC17-013
Exam Roll No.: 1703010190160006

4|Page
JOINT VENTURE
BETWEEN

Contents
5|Page
Chapter’s Subject pages
1
-introduction
-history
-objectivity of study
2
-Company Profile
3
-Stakeholders
-Conceptual framework
-Quality management
4
- Jointventure related issue
- Manufacturing facilities
- Industrial relation
- Products and services
5
-Finding
-conclusion
-Biblography

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Chapter 1
-introduction
-history
-objectivity of study

7|Page
Introduction

A joint venture is a business entity created by two or more

parties, generally characterized by shared ownership, shared returns
and risks, and shared governance. Companies typically pursue joint
ventures for one of four reasons: to access a new market,
particularly emerging markets; to gain scale efficiencies by combining
assets and operations; to share risk for major investments or projects;
or to access skills and capabilities.

According to Gerard Baynham of Water Street Partners, there

has been a lot of negative press about joint ventures, but objective
data indicate that they may actually outperform wholly owned and
controlled affiliates. He writes, "A different narrative emerged from our
recent analysis of U.S. Department of Commerce (DOC) data,
collected from more than 20,000 entities. According to the DOC data,
foreign joint ventures of U.S. companies realized a 5.5 percent
average return on assets (ROA), while those companies’ wholly owned
and controlled affiliates (the vast majority of which are wholly owned)
realized a slightly lower 5.2 percent ROA. The same story holds true
for investments by foreign companies in the U.S., but the difference is
more pronounced. U.S.-based joint ventures realized a 2.2 percent
average ROA, while wholly owned and controlled affiliates in the U.S.
only realized a 0.7 percent ROA."

Most joint ventures are incorporated, although some, as in

the oil and gas industry, are "unincorporated" joint ventures that mimic
a corporate entity. With individuals, when two or more persons come
together to form a temporary partnership for the purpose of carrying
out a particular project, such partnership can also be called a joint
venture where the parties are "co-venturers".

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The venture can be a business JV (for example, Dow Corning), a
project/asset JV intended to pursue one specific project only, or a JV
aimed at defining standards or serving as an "industry utility" that
provides a narrow set of services to industry participants.
Some major joint ventures include MarutiSuzuki ,MillerCoors, Sony
Ericsson, Vevo, Hulu, Penske Truck Leasing, and Owens-Corning –
and in the past, Dow Corning.

“ Whole ptoject define Jointventure between MarutiSuzuki ’’

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 K10 and
Alto 800, Swift, Celerio, Swift Dzire, Baleno and Baleno RS, Omni,
baleno, Eeco, Ignis, S-Cross, Vitara Brezza and newly launched S-
Presso small SUV. The company is headquartered at New Delhi. In
May 2015, the company produced its fifteen millionth vehicle in India, a
Swift DzireHistory

History

Maruti Udyog Limited was founded by the Government of

India in 1981, only to merge with the Japanese automobile
company Suzuki in October 1982. The first manufacturing
factory of Maruti was established in Gurugram, Haryana, in the same
year.
Chronology

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Affiliation with Suzuki
In 1982, a license 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 Suzuki 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. 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 Joint Venture
with the Government of India the other stake holder.
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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 800 after
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.

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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%.
Maruti Suzuki is now looking to shift its current manufacturing facility
located in the downtown Gurgaon as apparently it is short of space and
logistics. It is hunting for a huge 700 acres of plot of land.
On 25 April 2019, Maruti Suzuki announced that it would phase out
production of diesel cars by 1 April 2020, when the Bharat Stage VI
emission standards come into effect. The new standards would require
a significant investment from the company to upgrade its existing
diesel engines to comply with the more stringent emission standards.
Chairman R.C. Bhargava stated, "We have taken this decision so that
in 2022 we are able to meet the Corporate Average Fuel Efficiency
norms and higher share of CNG vehicles will help us comply with the
norms. I hope the union government's policies will help grow the
market for CNG vehicles." Diesel cars accounted for about 23% of
Maruti Suzuki's annual sales.

Need and Objectivity of study

To study over Jointventure between Maruti and Suzuki according to
the companies act 2013
To explore and simplify jointventjure procedure from MARUTI and
SUZUKI
To find out all the jointventure related issue between MARUTI and
SUZUKI
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To prepare and compare the presentation with other jointventure data

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Chapter 2
-Company Profile

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Company Profile-
Maruti Suzuki defines its vision statement as-“The leader in
Indian automobile industry, Creating customer’s Delight and
Shareholder’s Wealth; A Pride of India”
Maruti Suzuki India Limited stands as the largest subsidiary of Suzuki
Motor Corporation, Japan in respect to the number of cars that it
produces and sells worldwide. Founded in 1981, with Maruti 800 model
as it’s first product offering, the company today offers 14 models with
over 200 variants across the industry segment like passanger cars,
Utility Vehicles and Vans. Equipped with 5 plants in Gurgaon and
Manesar area of Haryana (India) MSIL has production capability of
1.55 Million Units /annum. It has 933 sales outlets in 113 big and small
cities in India.
Financial Data table
Maruti Suzuki India Limited has recorded a turnover of 12402.67 lakhs
INR as on 2nd Jan 2013 and still owns a massive 45% of total industry
sales despite of the presence of many national and internal players
that have entered the market.

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On 15th March 2011 Maruti Suzuki India Limited proudly rolled out its
10 millionth vehicle since start of production in December 1983. This
landmark achieved by the company comprises of 1,132,739 cars sold
in domestic market and 138,266 in the international market.

The Company's total income (Net of Excise) for the year 2010-11 was
Rs. 375,224 million, a growth of 24.6% over fiscal 2009-10. The
Company has a strong balance sheet with reserves and surplus of Rs.
137,230 million and a debt equity ratio of 0.02 as on 31st March, 2011.
(Organisational Profile, company website).
Maruti Suzuki India Limited started Maruti Driving Schools as its
initiative to contribute towards road safety. Currently there are 166
such driving schools in India that have trained a cumulative of 800,000
people in safe driving.
It encourages its employees to give back to the society and 2 schools
have been opened for the poor as an initiative for the same. The
employees have contributed 2792 hours of voluntary work.
They have been looking less polluting, alternatives like CNG
(Compressed Natural Gas, LPG (Liquefied Petroleum Gas) and
electric cars.
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Although CNG has been much appreciated, it is a form of fuel available
in only New Delhi (National Capital) and a few other cities. Hybrid cars
or electric cars have not been a huge success either and more
research needs to be done to develop such technology for the Indian
roads.
(Company website)
“Maruti Suzuki Principal objectives-(as quoted on SEBI report for
Maruti)
As the leading player in the small car segment of the Indian market, we
have the following principal objectives:
• To continue to expand the size of the Indian market for small cars by
strengthening and expanding

 our dealer network and making automobile financing available at

competitive rates;
• To strengthen our leadership position in the small car segment of the
Indian market;
• To continue to benchmark ourselves against improving global
manufacturing, marketing and other practices and standards, strive to
increase customer satisfaction through quality products and new
initiatives, and promote the financial strength of our sale network.”

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Chapter 3
-Stakeholders
-Conceptual framework
-Quality management

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•
STAKEHOLDERS

Maruti Suzuki India Limited initially entered the market in a joint

venture in Oct 1983 and Suzuki Motor held 26% equity and agreed to
provide the technological and management expertise to Maruti Udyog
Limited. They agreed to increase Suzuki’s share eventually to 40%
which was exercised in 1987. They gained a 50% share by the year
1992. Gradually due to various factors they began to slowly reduce
their managerial involvement in the company over to Suzuki Motor
Company for 1000 crores. In June 2003, Government decided to sell
off a 27.5% stake to the public at the rate of 125 INR thereby
generating 9.93 billion INR. In May 2007, the government decided to
sell its share to Indian financial institutions thus leaving no stake
anymore in Maruti Udyog. (S.Sinharay).
The current shareholding pattern of Maruti Suzuki India limited can be
depicted as the image shown below (Table snapshot from the National
stock Exchange website)

Shareholding Pattern
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Category 30 30
Sep June
2003 2012
Promoter & 72.49 54.21
Promoter Group
Indian 18.28 0.00
Foreign 54.21 54.21
Public Shareholding 7.78 45.79
Institutions 18.46 36.71
Non-Institutions 9.00 9.08
Others 0.00 0.00
AGRs & GDRs 0.00 0.00
Total: 100 100

ADR’s-American Depository Receipts, GDR’s –Global Depository

Receipts
Employees and Trade Unions have always held a major role in
Maruti Suzuki. Since the inception of Maruti in India by Suzuki Motor
Corporation in 1981 the relationship had bumpy rides causing little
unrest amongst employees. The Japanese management practices
though difficult to adapt this, sportingly accepted by the Indian labour
class on shop floors. Employees in the Gurgaon Plant demanded
revision in incentives and pension plan. Around 2001, the government
going by the disinvestments policy declared to exit out of the MUL
(Maruti Udyog Limited) by selling their part of the stakes in a public

20 | P a g e
offering. This was heavily opposed by the employees who felt this will
lead to loss of the business edge. This agitation lasted for two months
meanwhile 92 workers were dismissed but the company did not give
in. Moreover the Govt prevailed and MUL was privatised in 2002
making Suzuki as the major shareholder. (Hindu Business Line,
September 2000)
Another unfortunate incident occurred in July 2012 that scarred Maruti
Suzuki. There was a demand to increase salaries and allowances by
three fold. Employees resorted to violence during unrest in Manesar
plant in which 100 managers including 2 Japanese officials were
injured. During this one GM(HR),trapped inside office building was
beaten up badly and charred to death. This episode has tainted the
image of India for a prospective foreign investment. (Santanu
Choudhury ,20 July 2012) The Wall Street Journal.

CONCEPTUAL FRAMEWORK
- INTERNATIONAL TRADE/INVESTMENT
“Horizontal FDI occurs when the MNE (Multi National Enterprise)
enters a foreign country to produce the same product(s) as it produces
in the home country (or offers the same services as it sells at home).”
Suzuki acts in the Indian market in a Joint Venture-Maruti Suzuki under
Horizontal Foreign Direct Investment.

Shenkar, O. & Luo, Y. (2008), “International Business”, Wiley,

Chapter 3
“The Industrial Policy Statements” of 1977 and 1980 marked the
beginning of liberalisation process; which led to overall boom of GDP
21 | P a g e
and economy. This meant more commercial as well as domestic
buying of cars in the market. (S.Sinharay,2010). The colossal change
happened in 1997 when India became a market open to Foreign Direct
Investment and allowed upto 51% equity participation. This ignited
increasing market standards and cut throat rivalry in the market.
The consumer spending statistics in India from January 2004 to
January 2013 can be shown as under-

The New Industrial Policy of 1991 paved the way for releasing the
import export sector from the clutches of Bureaucratic Licensing
system. It was announced by then Finance Minster- in budget speech
of 1991-92 and de-licensing for the passenger car segment took place
in 1993 (Budget 1991-92, Speech of Shri Manmohan Singh,
Minister of Finance, 24th July, 1991, PART A, Page 4, Point 11).
Soon after in 2002, India took leap forward to allow 100 per cent
Foreign Direct Investment. FDI in automotive sector which grew at a
22 | P a g e
Compound Annual Growth Rate (CAGR) of 77 per cent over the period
2004-05 to 2007-08.

In 2002, higher incentives by the government and push for local R&D
increased spending on R&D.
In 2006, excise duty of small cars was decreased from 24% to 16%,
encouraging investment in automotive segment to make India global
manufacturing hub for small car segment.
VALUE CHAIN & SUPPLY CHAIN
The JV ran through constant improvement in value chain and had
given immense growth in terms of the ever-growing improvement in the
net worth of the company.

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Amongst the success stories of supply chain management, Maruti is
most talked about in Indian automobile market. The company has an
impeccable fleet of 246 local suppliers and 20 global ones.
1. When MUL set up its manufacturing in 1983, government had
approved to localize their components. Maruti looked out for
entrepreneurs and helped them to start as vendors assisting them
with licensing, technical training. Maruti also collaborated in some
strategic JVs whereby they could ensure in production and quality
components.
2. Due to rather inexperienced vendors, Suzuki was not pleased with
delays. Suzuki being a technologically progressive company
implemented the Just-In-Time (JIT) in technique so as to achieve
operational efficiencies.
3. Maruti Suzuki revamped their supply chain with E. Nagare or
'electronic flow' which is actually a structure of production plans from
the vendor to Maruti's shop floor, which currently sits at a two hour
cycle from 30 days in the past.
4. In the need to achieve supplies effectively or “Just in Time”, local
suppliers have an edge. More than 76% of the 246 suppliers are
situated within 100 kms of the plant. The suppliers responsible for
24 | P a g e
bulky components like instrument panels, fuel tanks, bumpers,
seats, etc are located adjacent to plant in the Supplier’s Park.
5. Maruti is very supportive of its vendors. It facilitates finding
technology partners, financial aiding, technical and management
assistance and bringing directness in its dealings.
6. Maruti Suzuki India has a strategy for its suppliers to compete
against each other and global vendors whereby teams 54 of top 80
component suppliers to identify, discuss and resolve a core
business that can add value to the overall operations thus the
efficiency of the company in general.
7. Maruti started a program “Challenge 50:30” among one of its
practices. By this program Maruti aimed at reducing the cost by 30
per cent such that productivity was simultaneously increased by
almost 50 per cent during the teRm ending March 2006..
(December 2010, Indian Transport Portal, Shalini Amarnani)

CROSS CULTURAL ISSUES

The road to establishing Maruti Suzuki was not easy in its early years
of inception. It took hard work on the two vastly different cultures to
collaborate, co-exist and work together to make what Maruti Suzuki is
today. India being a lucrative open market was to gain economy
benefit with the high end technology and managerial practices tools &
techniques. Country had just seen new face of liberalisation and big
industrialists realised that it was inevitable but to adapt to these
changes to be successful. Businesses were becoming
25 | P a g e
“Internationalised”. Quality, financial management, Corporate
Restructuring, resizing, trimming the corporate fat, Benchmarking were
becoming the buzz words.

Japanese car manufacturers had a lot to offer to the Indian way of

doing business. The Japanese strongly believe in team work. The
success of the project is considered to be a team responsibility and not
just of the manager alone. This motivates the workers to perform well.
There is classless setup whereby all members of a team are treated
equally. The Japanese management practice of “Kaizen” is
encouraged actively whereby-employees were made the part of
improvement process. Their opinions and suggestions were valued
and appreciated through generous incentives.

Cooperation was the focus and not competition with vendors. More
than competitive tendering and lowest price bidding, they tend to
relationship building and strike a deal mutually beneficial for both
vendors and company. Japanese are fiercely passionate about
maintaining and delivering quality and lean management principles that
they have extensively inculcated in their businesses. They believe in
building quality on the assembly line itself, this practice is popularly
known as “Jidoka” or “mistake-proofing”.

In wake of this cultural advancement, Indian companies will need to

reposition their HRD policies to train and favour the employees and
their interests. Shift focus on improving and learning from the
Japanese about improving quality and reducing waste. Most

26 | P a g e
importantly, there should be mutual respect between the two for each
other’s cultures and customs.
(Liker, The Toyota Way)

_ Quality management
(Maruti Udyog Limited, Securities and Exchange Board of India,
Report)
Maruti Suzuki has believed in conserving environment and natural
resources. Instilling such practices has been an integral part of their
systems and processes. To do the same they took up the concept of
"Reduce, Reuse, Recycle" (3R's) as their driving principle. The
strategy of the 3 R's is inculcating in all of the manufacturing facilities,
supply chain and logistics operations.

Maruti has been awarded the following certifications for Quality

Management-
1. EN ISO 9001:2008-Quality Management System
2. EN ISO 14001:2004-Enviornment Management System Certificate
3. ISO/IEC 27001:2005-Informatrion Security Management system
4. In 2000, 2001 and 2002, J.D.Power Asia Pacific, Inc. ranked MSIL,
No. 1 in the India Customer Satisfaction Index, which assesses
customer satisfaction with product quality and dealer service(SEBI
Report)
(Company Website)

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Suzuki Quality Management System (SEBI Report)
Based on a method adopted by Suzuki at its manufacturing facilities,
the quality of a vehicle dispatched from our facility is measured through
a quality index audit on a daily basis. The quality index is a relative
measure of quality based on evaluation of vehicles selected at random
on a daily basis. In addition, we have recently adopted Suzuki’s global
customer audit index, in order to provide a more customer-oriented
focus to our entire organization, and channel resources towards
customer complaints for rapid response.
Quality improvement initiatives
We have recently introduced for quality control:

• Tracking surveys and direct customer contact in order to better

understand customer satisfaction levels and customers’ problems;
• Full-time task forces for improvement in initial quality study problems
and departmental cross-functional teams to work on defined problems
with challenging targets;
• Quality gates at various stages in order to raise alarms for correction
and immediate action on defects;
• Fool-proofing, or Pokayoke in Japanese, which comprises checks
conducted in order to prevent defects arising from human error during
the manufacturing process;
• A real-time feedback system, cross-linked with overall targets; and
• The “Pica Pica” system, which aligns the sequence of components
and vehicles in order to prevent incorrect fitting of components.
28 | P a g e
Chapter 4

- Jointventure related issue

- Manufacturing facilities

- Industrial relation

- Products and services

29 | P a g e
Joint venture 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 Gurgaon Facilities manufactures the Alto
800, WagonR, Ertiga, S-Cross, Vitara Brezza, Ignis and Eeco.
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

30 | P a g e
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 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.
Industrial relations
Since its founding in 1983, Maruti Udyog Limited has experienced
problems with its labour force. The Indian labour it hired readily
accepted Japanese work culture and the modern manufacturing
process. In 1997, there was a change in ownership, and Maruti
became predominantly government controlled. Shortly thereafter,
conflict between the United Front Government and Suzuki started. In
2000, a major industrial relations issue began and employees of Maruti
went on an indefinite strike, demanding among other things, major
revisions to their wages, incentives and pensions.
Employees used slowdown in October 2000, to press a revision to their
incentive-linked pay. In parallel, after elections and a new central
31 | P a g e
government led by NDA alliance, India pursued a disinvestment policy.
Along with many other government owned companies, the new
administration proposed to sell part of its stake in Maruti Suzuki in a
public offering. The worker's union opposed this sell-off plan on the
grounds that the company will lose a major business advantage of
being subsidised by the Government, and the union has better
protection while the company remains in control of the government.
The standoff between the union and the management continued
through 2001. The management refused union demands citing
increased competition and lower margins. The central government
privatized Maruti in 2002 and Suzuki became the majority owner of
Maruti Udyog Limited.
Manesar violence
On 18 July 2012, Maruti's Manesar plant was hit by violence.
According to Maruti management, the production workers attacked
supervisors and started a fire that killed company's General Manager
of Human Resources Avineesh Dev and injured 100 other managers,
including two Japanese expatriates. The workers also allegedly injured
nine policemen. However Maruti Suzuki Workers Union (MSWU)
President Sam Meher alleged that management ordered 300 hired
security guards to attack the workforce during the violence.The
incident is the worst-ever for Suzuki since the company began
operations in India in 1983.
Since April 2012, the Manesar union had demanded a three-fold
increase in basic salary, a monthly conveyance allowance of ₹ 10,000,
a laundry allowance of ₹ 3,000, a gift with every new car launch, and a
house for every worker who wants one, or cheaper home loans for
those who want to build their own houses.According to the Maruti
Suzuki Workers Union a supervisor had abused and made
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discriminatory comments to a low-caste worker, Jiya Lal.These claims
were denied by the company and the police. Maruti said the unrest
began, not over wage discussions, but after the workers' union
demanded the reinstatement of Jiya Lal who had been suspended for
allegedly beating a supervisor. The workers claim harsh working
conditions and extensive hiring of low-paid contract workers which are
paid about $126 a month, about half the minimum wage of permanent
employees. On 27 June 2013, an international delegation from the
International Commission for Labor Rights (ICLR) released
a report alleging serious violations of the industrial right of workers by
the Maruti Suzuki management. Company executives denied harsh
conditions and claim they hired entry-level workers on contracts and
made them permanent as they gained experience. Maruti employees
currently earn allowances in addition to their base wage.
The police, in its First Information Report (FIR), claimed on 21 July that
Manesar violence is the result of a planned violence by a section of
workers and union leaders and arrested 91 people. Maruti Suzuki in its
statement on the unrest, announced that all work at the Manesar plant
has been suspended indefinitely. The shut down of Manesar plant is
leading to a loss of about Rs 75 crore per day. On 21 July 2012, citing
safety concerns, the company announced a lockout under The
Industrial Disputes Act, 1947 pending results of an inquiry the
company has requested of the Haryana government into the causes of
the disorder. Under the provisions of The Industrial Disputes Act for
wages, the report claimed, employees are expected to be paid for the
duration of the lockout. On 26 July 2012, Maruti announced employees
would not be paid for the period of lock-out in accordance with Indian
labour laws. The company further announced that it will stop using
contract workers by March 2013. The report claimed the salary
difference between contract workers and permanent workers has been
much smaller than initial media reports – the contract worker at Maruti
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received about ₹ 11,500 per month, while a permanent worker
received about ₹ 12,500 a month at start, which increased in three
years to ₹ 21,000-22,000 per month. In a separate report, a contractor
who was providing contract employees to Maruti claimed the company
gave its contract employees  the best wage, allowances and benefits
package in the region.
Shinzo Nakanishi, managing director and chief executive of Maruti
Suzuki India, said this type of violence has never happened in Suzuki
Motor Corp's global operations in Hungary, Indonesia, Spain, Pakistan,
Thailand, Malaysia, China and the Philippines. Nakanishi apologised to
affected workers on behalf of the company, and in press interview
requested the central and Haryana state governments to help stop
further violence by legislating decisive rules to restore corporate
confidence amid emergence of this new 'militant workforce' in Indian
factories. He announced, "we are going to de-recognise Maruti Suzuki
Workers’ Union and dismiss all workers named in connection with the
incident. We will not compromise at all in such instances of barbaric,
unprovoked violence." He also announced Maruti plans to continue
manufacturing in Manesar, that Gujarat was an expansion opportunity
and not an alternative to Manesar.
The company dismissed 500 workers accused of causing the violence
and re-opened the plant on 21 August, saying it would produce 150
vehicles on the first day, less than 10% of its capacity. Analysts said
that the shutdown was costing the company 1 billion rupees ($18
million) a day and costing the company market share. In July 2013, the
workers went on hunger strike to protest the continuing jailing of their
colleagues and launched an online campaign to support their
demands.
A total of 148 workers were charged with the murder of Human
Resources Manager Avineesh Dev. The court dismissed charges
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against 117 of the workers. On 17 March 2017, 31 workers were found
guilty of variety of offences. 18 were convicted on charges of rioting,
trespassing, causing hurt and other related offences under Indian
Penal Code sections. The remaining 13 workers were sentenced to life
in imprisonment after being found guilty of the murder of General
Manager of Human Resources Avineesh Dev. Twelve of the thirteen
sentenced were office-bearers of the Maruti Suzuki Workers Union at
the time of the alleged offences. The prosecution had sought the death
penalty for the thirteen.
Both prosecution and defence have announced they will appeal
against the sentences. Defence counsel Vrinda Grover stated, “We will
file appeals against all convictions in the HC. The evidence, as it
stands, cannot withstand legal scrutiny. There is no evidence to link
these workers to the murder. The 13 who have been convicted, it’s
important to remember that they were the leaders of the union.
Therefore, it is clear that this is targeted framing of these persons. We
hope for justice in the superior court.”
The Maruti Suzuki Workers Union is continuing to organise industrial
action and protests calling for the workers to be released and criticising
the judgement and sentences an unjust.An international appeal for the
release of the workers has been made by the International Committee
for the Fourth International (ICFI) and other organisations such as the
Peoples Alliance for Democracy and Secularism.

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Products and service
Current Models
S- 2019– micro
Model Production Category Image Outlet Arena
Presso present SUV

1999–
Wagon R hatchback Arena
present

2014–
Celerio hatchback Arena
present

2005–
Swift hatchback Arena
present

2016– compact
Vitara Brezza Arena
present SUV

2017–
Dzire sedan Arena
present

2018–
Ertiga MPV Arena
present

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2015–
Baleno hatchback NEXA
present

2015–
S-Cross SUV NEXA
present

2017–
Ignis Mini SUV NEXA
present

2019–
XL6 MPV NEXA
present

2014–
Ciaz sedan NEXA
present

Discontinued Models
Launche
Model Discontinued Category Image
d

800 1983 2013 Hatchback

Omni 1984 2019 Microvan

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Gypsy E 1985 2000 Mini SUV

Gypsy King 1985 2017 Mini SUV

1000 1990 2000 Sedan

Zen 1993 2003 Hatchback

Esteem 1994 2010 Sedan

Baleno 1999 2007 Sedan

Station
Baleno Altura 2000 2003
Wagon

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Alto 2000 2012 Hatchback

Versa 2001 2010 Minivan

Grand Vitara
XL7 2003 2007 SUV
(import)

Grand Vitara
2007 2015 SUV
(import)

Zen Estilo 2007 2013 Hatchback

SX4 2007 2014 Sedan

A-star 2008 2014 Hatchback

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Swift Dzire 2008 2017 Sedan

Ritz 2008 2016 Hatchback

Alto K10 2010 2014 Hatchback

Kizashi
2011 2014 Sedan
(import)

Ertiga 2012 2018 MPV

Sales and service network

Car showroom near Eluru

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Maruti Suzuki has 3598 sales outlets across 1,861 cities in India. The
company aims to double its sales network to 4,000 outlets by 2020. It
has 3,792 service stations across 1,861 cities throughout
India. Maruti's dealership network is larger than that of enough known
companies 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. Also, The Express
Service stations exist, sending across their repair man to the vehicle if
it is away from a normal service center.
NEXA
In 2015 Maruti Suzuki launched NEXA, a new dealership format for its
premium cars.
Maruti currently sells the Baleno, Baleno RS, S-Cross, XL-6, 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 Maruti 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
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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
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N2N is the short form of End to End Fleet Management and provides
lease and fleet management 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 Leasing,
Maintenance, Convenience services and Remarketing.
Maruti Accessories
Many of the auto component companies except than Maruti Suzuki
started to offer compatible components and accessories. 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

A Maruti Driving School in Chennai

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
43 | P a g e
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. But we felt that Maruti should first do
something in this regard and hence this initiative of Maruti Driving
Schools."
Awards and recognition
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 ninth position in 2019 among the most
trusted brands of India.

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Chapter 5
-Finding
-conclusion
-Biblography

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