Maruti Suzuki India Limited is one of India’s oldest automobile companies and has ruled the Indian market often with over 50% market share in sales.
The automobile industry in India is highly consolidated across segments. The Herfindahl-Hirschman Index for the Indian passenger vehicle market stands at 2900, indicating a highly concentrated industry.
Maruti Suzuki India Ltd. (MSIL) is India’s largest passenger vehicle company commanding a market share of 52% in the domestic market with 1.65mn vehicles sold in FY18. It is a subsidiary of Suzuki Motor Corporation, Japan.
MSIL has two manufacturing plants with an installed capacity of 1.56mn vehicles per year. In addition, with strong demand outlook, MSIL has set up a plant in Gujarat with a capacity of 7.5L to be commissioned gradually over FY18-21 in order to achieve its target of selling 2mn vehicles by 2020.
MSIL has one of the largest sales networks with 3,426 sales outlet including NEXA and 3,570 service workshops as of January, 2019.
In this article
- Maruti Suzuki Share Price
- Key Milestones
- Maruti Suzuki Growth
- Focus areas for strengthening market share
- Volume Mix of Maruti Suzuki
- Key Financial Highlights
- Highlights of FY 2017-18
- Major Automobile Players in Market
- Financial Highlights of 9M FY’ 19
- Pros and Cons affecting the figures of Maruti Suzuki
- Future Growth Plan
- Mutual funds holding Maruti Suzuki India Limited Shares
MSIL Share Price (as on 28/01/2019): 6511.05
The one-year data for the historical share price of Maruti Suzuki:
|1983||First lot of Maruti Suzuki cars assembled|
|1984||Indian roads witnessed the Iconic Omni|
|1985||Maruti Gypsy launched|
|1990||Luxury sedan, Maruti 1000 launched|
|1993||Maruti Zen was launched|
|1994||Maruti Esteem launched|
|1999||Third manufacturing plant inaugurated|
|2000||Maruti was first car company to start a customer care centre|
|2000||Launched the Institute of Driving Training and Research|
|2002||Suzuki Corporation acquired a major stake in MUL|
|2007||Maruti Udyog Ltd renamed as Maruti Suzuki India Limited|
|2008||Launched A-star, world’s fifth strategic model|
|2014||Maruti Suzuki launched Nexa showroom in Delhi|
|2014||Launched S-Cross, India’s first premium crossover|
|2015||Maruti Suzuki launched Ciaz|
|2015||Launched Baleno, the premium hatchback|
|2016||Launched Brezza, the first compact Urban SUV|
|2016||Exported ‘Made in India’ vehicle to Japan|
|2017||Maruti Suzuki choosen ‘Star MNC’ at Business Standard Annual Awards|
Maruti Suzuki Growth
India’s passenger vehicle market grew at 7.9% in 2017-18, against 9.2% in 2016-17. Around half the manufacturers were able to post growth but MSIL posted volume growth of 13.8% in passenger vehicles in the domestic market (against the industry growth of 7.9%). Including the Light Commercial Vehicle (LCV), the Company’s domestic sales growth stood at 14.5%.
Maruti continued to expand its network at a fast pace. During the year, the Company added 315 sales outlets, including 150 sales outlets of the commercial channel. In addition, 203 service workshops were added to the network.
The Company’s in-house R&D capability, together with strong support and commitment of SMC in providing core technology and new generation technologies, is helping the Company maintain market leadership.
Maruti aimed to improve efficiency through technology interventions and shorter set up times. The Company undertook several measures including robot path optimization, spot re-distribution and process re-balancing to achieve higher efficiency.
The company always believes in an innovation driven ecosystem. The ecosystem also fosters greater collaboration and participation by the workforce. This is instrumental in creating a better work environment for manufacturing.
Maruti through the fresh layout of sub-stations enhanced its flexibility. Also, some new models were introduced and some were discontinued. The shift towards petrol cars required an increase of 156,593 units in the production of petrol models.
To realise the target of dispatching zero defect vehicles from its facilities, the Company regularly revisits processes, improves them and consistently adheres to them in a disciplined manner. Use of fool proofing systems such as pika-pika and pokayoke, and capturing process parameters for easier fault detection, are some of the measures to further improve quality.
Volume Mix of Maruti Suzuki
Key Financial Highlights
|Parameters||FY’ 17||FY’ 18||% change|
|Non Current Assets||424744||514487||21.1%|
|Operating Cash Flow||102793||117850||14.6%|
|Free Cash Flow||69070||79197||14.7%|
Highlights of FY 2017-18
Quarter 1 (Q1)
- Enhances employability of country’s youth: Announced to set up Automobile Skill Enhancement Centres (ASECs) across 15 government run ITIs to train 30,000 youth in automobile related jobs over five years.
- Launched all new Dzire: Authentic sedan styling, plush interiors, superior comfort and convenience features take India’s best selling sedan to a whole new level
Quarter 2 (Q2)
- Introduced Maruti Suzuki ARENA: The new corporate identity for the retail sales channel to excite, delight and serve customers by leveraging the power of digital technology.
- Redefined NEXA services in India: Customer experience in after-sales service is taken to the next level with plush workshops, digital ‘health cards’ for cars and premium lounges.
Quarter 3 (Q3)
- Launched CelerioX: The bold, sporty and trendy extension of the Celerio family is a synonym of modern and progressive design and technology.
- Launched S-Cross: Launched premium urban offering, S-Cross in all-new, bold and assertive form. Gets the acclaimed DDiS200 Smart Hybrid Technology.
Quarter 4 (Q4)
- Alto hits another milestone: India’s most-loved car continues to rule the entry segment and achieves the unique feat of 35 lakh cumulative sales.
- Revelation at AutoExpo: All-new Swift gets a grand reception at Auto Expo 2018. The third generation of the iconic brand is launched in style. Also offered with acclaimed Auto Gear Shift technology.
Major Automobile Players in Market
Financial Highlights of 9M FY’ 19
|Sales Volume||1403970 Vehicle|
|Net Sales||622890 Mn|
Pros and Cons affecting the figures of Maruti Suzuki
- Cost reduction efforts
- Higher fair value gain on invested surplus
- Higher selling expense
- Higher depreciation expense due to the introduction of new models and new engine
- Adverse commodity prices
- Higher costs in resources and capacities which were earlier planned to enable a higher estimated growth
- Adverse foreign exchange variation
Future Growth Plan
Maruti majorly plans to work in the following areas:
- Strong product portfolio
- Demand environment
- Interest rates
- Fuel prices
- Commodity prices
- Foreign exchange
Maruti Suzuki is striving to post double digit growth for the 5th consecutive year in the domestic market. The 2nd plant in Suzuki Motor Gujarat is expected to be operational in Q4 of 2018-19 and the Company is taking steps to overcome any capacity challenges.
While there is still uncertainty on issues such as government policy, regulation, charging infrastructure and battery cost viability with respect to petroleum, Maruti has planned for the launch of hybrid and electric vehicles and is studying the eco-system required to support these technologies.
A lot of technology and guidance will have to be sought from SMC, Japan. The Company is confident of continuing its leadership in the new paradigm.
- Axis Long Term Equity Fund
- ICICI Pru Bluechip Fund
- DSP Top 100 Equity Fund – Reg
- Reliance Equity Hybrid Fund
Disclaimer: the views expressed here are of the author and not those of Groww.