Abstract

The case ‘Market expansion strategies of Maruti Udyog’ examines the market expansion strategies adopted by Maruti Udyog Limited (MUL), India’s biggest carmaker, in response to intense competition and a decline in sales of its bread-and-butter model - the Maruti 800. MUL enjoyed a near-monopoly status, until the Government of India liberalized the economy in 1991. This led to the entry of foreign players like Hyundai, Fiat, Mitsubishi, and Toyota. Even Indian auto players like Tata Motors and Mahindra and Mahindra entered the fray to give MUL tough challenges. MUL began to introduce new models, and upgrade its existing models in response to market demand. For instance, the company introduced the hatchback ‘Swift’ to shed its image of being a manufacturer of low-cost staid cars. The case study looks into how MUL came back from the crunch to retain its place as the top carmaker in India. It also deals with the tussle between Suzuki Motor Corporation and the Government of India over ownership issues. The case highlights the promotional offers undertaken by MUL in its quest for market dominance and examines how the company was able to mould itself according to the market requirements, by entering new domains and reaching out to potential customers through its ‘True Value’ and other promotional offers.

Learning Objectives

The case is structured to achieve the following Learning Objectives:

• Gain an overview of the Indian automobile Industry, especially the passenger car market.
• Study the rise of MUL, and its measures to tackle competition successfully
• Analyze the impact of macroeconomic variables like government regulations and environmental guidelines (Euro norms) on the functioning of an automobile manufacturer in India
• Show how promotional offers can work wonders for a company in expanding the market and overcoming competition
• Provide an overview of the pre-owned/used car market in India.

Keywords

Maruti 800, Suzuki Swift, Hyundai Santro, Daewoo Matiz, Suzuki Motor Corporation (SMC), Tata Motors, Market leadership, Market expansion, Marketing communications, Sales promotion, In-program placements, Customer satisfaction, Car finance, Society of Indian Automobile Manufacturers (SIAM) and Maruti True Value pre-owned cars.