This review isn’t for M-800 but is for the Maruti Udyog Ltd. (MUL), I am sorry to jot it down in this category but I hadn’t been able to find MUL in the Business Group category. Please bear with me. ____________________________________________________________ Finally as the government has decided to divest its interest from MUL, it would be interesting to know about Indian car industry and MUL. HISTORY Mr. Thackershi Doshi and Mr. Dhanji Vasudev are the Pitamah’s of Indian car industry. Mr. Thackershi Doshi started Premier Automobiles Ltd. (PAL) in 1942 was followed by Mr. Dhanji Vasudev in 1942 who registered Hindustan Motors (HM) at Vadodara and started its first plant at Okha, Gujarat. This were those kind of plants were machines and spareparts were being imported and were fixed into the body made in India. In 1944, Mr. Walchand Hirachand promised to make 100% Indian car as soon as possible. But, after independence Jawaharlal Nehru protected him from doing so due to his socialist mind-set and being fascinated by Russia (though, he himself had many cars at that point of time!). The credit for making 100% Indian car can be given to the great Mr. J.R.D.Tata and the TELCO who manufactured ’’TATA ESTATE’’ which was launched in 1988 and was priced at Rs.4.22 lakhs. In the era of licencing i.e. after 1950’s for every car manufactured in India minimum Rs. 25, 000/- had to be paid as premium on the market price, there used to be rush for obtaining a car. Now comes the year 1980, Mr. Sanjay Gandhi forced Mrs. Gandhi to start an automobile company which manufactures 100% Indian car. The opposition didn’t let the Parliament work on this issue and would boycott the Parliament. Mr. Arun Shourie ( who is the divestment minister, at present) criticised Mrs. Gandhi’s government for Sanjay’s venture and termed MARUTI as ’’MAA ROTI’’ and further stated that Mrs. Gandhi will have to cry for Sanjay’s venture. After rigorous opposition MUL saw its dawn in 1981 after a collaboration with Suzuki Motors. of Japan. In 1983, MUL announced a launch of its first model, ’M-800’, by 1984. Deposit worth Rs. 10, 000/- ( paying interest at 7% p.a. ) was collected per car registered; in just 6 months they collected a whopping deposit worth Rs. 135 crores. The first lot of 20, 000 cars was on roads by 1984 ( which gave a stiff competition to models launched by ’PAL’ and ’HM’). The public got fascinated by M-800 instantly. As the cars manufactured weren’t able to meet the demand (for eg., if I have booked a car in 1985, I used to get the delivery of it in 1987 or 1988), M-800 gave a new side business. Whoever was alloted the car, sold it at a minimum premium of Rs. 10, 000/-. Minimum 25% of cars manufactured were sold in this fashion and so the motto to stop charging premium from customers wasn’t successful. It became a business for all, whether the person was a middle class person or a rich class person, everyone wanted to earn profit out of it, a lucrative business was handy (similar incidents have been noticed for ’’MAHADA’’ in Mumbai and Navi Mumbai). And so, the MUL started running and simultaneously the business attached to it, till 1994; now came the period when the private players became aggressive. ’’PAL’’ collaborated with ’’Fiat Motors’’, ’’HM’’ with ’’GM’’, ’’TELCO’’ with ’’Daimler Chrysler’’, ’’Mahindra & Mahindra’’ with ’’Ford Motors’’, etc. AT PRESENT Prior to private players becoming aggressive and foreign companies entering the Indian Market, MUL’s market share used to be 80% which at present is 60%. Since last 5 years, MUL has been able to maintain its 60% market share. It has 2000 plus strong dealer network and authorised service station all over India. Spare-parts of all the models are easily available and that too they are available in Leh, Ladakkh. Turnover is heading towards Rs. 100 billions. In January, ’02 the auditors of the company and financial analyst calculated its net worth per share at Rs. 3280/- having a face value of Rs. 100/- per share. Now, lets take a quick look at the models launched by MUL :- M-800 Launched in 1984 have already been sold in millions. Serves the need of middle class Indians. A brand new air conditioned car just at Rs. 2, 50, 000/-, though having lot of cons such as lack of enough leg room, no lumbar support, etc. has enough pros to attract middle class Indians. ZEN Launched in 1994 having 999cc engine was highly acknowledged in ’’Geneva Auto Show’’ held in 1998 for giving world class facilities at a very low cost. Drawbacks of M-800 can’t be found in this car. Zen can be found running on European roads though in small numbers, is successful in europe due to its cost competitiveness and providing world class facilities at such a low cost. ALTO & WAGON R Launched in 2000 and 2001 respectively, ranks 3rd (Alto) in terms of sales. GYPSY Not so successful as sports utility vehicle. It gets hungry very fast compared to other suv’s available and has many other drawbacks. ESTEEM(a modified version of M-1000 launched in 1992) Launched in 1994, a mid-size car was highly sold car prior to private players entering in this segement, but now not a failure is still able to find customers due to low price and strong dealer network. BALENO Launched in 2000, a kind of mid-size luxury car isn’t upto mark. Doesn’t satisfy the term ’’luxury’’. So can be called a complete failure. FUTURE PROSPECTS 1. I firmly believe that no car manufacturing company would ever dare to dream to capture the market of M-800 because MUL has highly depreciated plant for M-800. So for another decade it can book its business on M-800 successfully. 2. With little amount of extra effort it can improve the performance of all its small size cars. Further, there is a ray of light to capture export market due to successful launch of its small size cars in europe. 3. MUL would be thoroughly required to work on its mid-size cars and luxury cars to improve their performance. By government divesting its interest in MUL and as the management would change, she can have required degree of professionalism. Licencing era would prove to be ’Blessing in disguise’ for Suzuki Motors provided if they work professionally. MARUTI = HANUMAN, who is said to be immortal. MUL has enough potential for becoming ’’GM’’ of India provided all the things fall correctly. ____________________________________________________________ Conversion:- $1 = Rs 48.9