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Maruti Suzuki is the biggest vehicle manufacturer in India with a market share of over 50% meaning, one out of every two cars purchased in India is a Maruti Suzuki. In fact, such is the dominance of Maruti Suzuki that seven of its passenger vehicles were featured in a list of India’s best selling cars of 2017. Few companies in the world have such dominance of an industry but rivals are catching up. India’s car market is currently the 5th biggest in the world and poised to become the 3rd largest in the world by 2020. And with sales slowing in China and demand stagnant in the US, many of the world’s biggest auto companies are seeing opportunities in the Indian market. This may also explain why parent company Suzuki Japan is not only financing new capacity expansion in Gujarat, India but also purchasing land out rightly to lease to new potential dealer outlets and expand its network. Using Pestle and Swot, this report will examine the current macro environment in the Indian automobile industry to understand the key trends driving growth and competition.
1.0 INTRODUCTION
Maruti Suzuki India Ltd is an Indian based carmaker and subsidiary of Suzuki Motor Corporation Japan. It was first established as a joint venture in 1981 between state-owned Indian car maker Maruti Udyog and Suzuki with the principle aim of manufacturing and selling of motor vehicles. The company is now majority owned by Suzuki and interestingly, Maruti Suzuki has a market capitalisation three times bigger than Suzuki Motor Corporation itself (Mundy 2017). Maruti Suzuki is also the biggest vehicle manufacturer in India with a market share of over 50% meaning, one out of every two cars purchased in India is a Maruti Suzuki. In fact, such is the dominance of Maruti Suzuki that seven of its passenger vehicles were featured in a list of India’s best selling cars of 2017 (Mukherjee 2017).
Its closest rival is Hyundai Motors India with a market share of around 17% meaning the combined market share of Maruti Suzuki and Hyundai Motors India India is close to 70%. Such a high concentration of the market share between the two dominant players means India’s automotive sector is a duopoly (Maruti Annual Report 2016; Mukherjee 2017; Mundy 2017).
Maruti Suzuki net revenue for the year ended 2017 was US$12bn, 24% increase from the previous year where the com US$9.1bn in annual revenue (Annual Report 2017).
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