Maruti Suzuki India: Ruling Indian Roads
When every second car sold in the Indian market comes from just one company, it certainly says a lot about the respect that company commands. Maruti Suzuki India (MSIL) sold more than 1.5 million cars in the last financial year, helping the industry touch a new high of 3 million units in a year. From launching new cars to making strategic changes, whatever MSIL has touched in the last few years has turned to gold.
The company reported a 36.6 per cent jump in its annual profit to a record Rs 7,511 crore for the last fiscal. The company’s net profit in 2015-16 was Rs 5,497.2 crore. Volumes for the financial year ended 31 March were up 9.8 per cent to 15,68,603 units. Of this, exports were at 124,062 units. The company aims to grow at 10 per cent year-on-year and is most likely to touch its set target of 2 million cars by 2020 before time. It remains a blue chip on the bourses. The board of directors recommended a dividend of Rs 75 per share of face value of Rs 5 per share for 2016-17, more than double the dividend of Rs 35 per share paid in the previous year.
Maruti Suzuki is now making deep inroads into segments dominated by others. From being a small player in the fast growing UV segment, Maruti Suzuki, in just two years, has become the market leader on the back of strong demand for its compact SUV Vitara Brezza.
In the first quarter of the new financial year 2018, while Mahindra & Mahindra’s market share in the utility vehicle (UV) segment dropped to 27.92 per cent from 31.62 per cent last year, Maruti Suzuki’s share during the period climbed to 30.5 per cent from 22.26 per cent a year ago.
For consumers, buying a Maruti Suzuki is a delight. The company has the largest network of dealership and sales and service stations. It has, over the past few years, shed its image of an old man’s car and has emerged a popular choice for young buyers through its premium outlet chain Nexa. Now, the company is all set to revamp its remaining 1,800 showrooms, 3,000 workshops and as many as 1,000 pre-owned car showrooms under the True Value brand. Kenichi Ayukawa, MD and CEO of MSIL says, “The target is to improve customer delight. If they are satisfied, they have a good feeling, they will return to us and we can get new business for future.”
When it comes to paying back to society, Maruti Suzuki is a true leader in that aspect too. Maruti Suzuki spent a total of Rs 89.45 crore during FY 2016-17 on its corporate social responsibility (CSR). During ongoing FY 2017-18, the Board of Maruti Suzuki India has approved a total spending of Rs 140 crore towards CSR spending. Among other things, the company will spend the amount in stepping up its ‘road safety’ initiatives. The company has also doubled recruitment of ITI students across dealer service network to 2,205 students, as against 1,100 students in 2015-16.
Post the Manesar crises in 2012, which affected MSIL’s operations, the company has engaged its participation with workers. Ayukawa interacts with worker unions every month to get their feedback and improve relation between the management and employees. Maruti Suzuki’s readiness for newer emission and safety norms, passing GST benefits, creating employment and making affordable hybrid vehicles will continue to cement its reputation of being a respectable company in the years to come.
