Maruti’s market share and stock price has taken a beating in the recent past; blame competition for it. Shinzo Nakanishi, MD, Maruti Suzuki India, explains the comeback plan of the company to B&E.
B&E: The company’s market share has fallen below 50% for the first time in its 25 year-old history. Did you go wrong somewhere in reading the market?
Shinzo Nakanishi (SN): It is our aim that by the end of this fiscal, we will capture over 50% of the domestic passenger car market in India. Apart from the recently launched Alto K10, the company has also introduced five CNG models in its portfolio and the automatic A-Star, which will bring in additional volumes. We expected the market to grow at a rate of 12-15% over the past year, but it has grown by 30%. While we were selling almost all our models in the domestic market, the boom in the industry came as a boon for auto majors who had idle capacity. We made a mistake in reading the market growth.
B&E: The royalty payments that Maruti made to Suzuki for the first quarter of FY2010-11 is considered a big party spoiler. Do you believe that the level of royalty will go up in quarters to follow, from the current rate of 5.1%?
SN: I don’t think so. The amount of royalty will stay around the same level in the coming quarters as well. However, as the dependence of Maruti on Suzuki as far as its technology and brands are concerned is very high, it is difficult to lower it.
B&E: The company’s market share has fallen below 50% for the first time in its 25 year-old history. Did you go wrong somewhere in reading the market?
Shinzo Nakanishi (SN): It is our aim that by the end of this fiscal, we will capture over 50% of the domestic passenger car market in India. Apart from the recently launched Alto K10, the company has also introduced five CNG models in its portfolio and the automatic A-Star, which will bring in additional volumes. We expected the market to grow at a rate of 12-15% over the past year, but it has grown by 30%. While we were selling almost all our models in the domestic market, the boom in the industry came as a boon for auto majors who had idle capacity. We made a mistake in reading the market growth.
B&E: The royalty payments that Maruti made to Suzuki for the first quarter of FY2010-11 is considered a big party spoiler. Do you believe that the level of royalty will go up in quarters to follow, from the current rate of 5.1%?
SN: I don’t think so. The amount of royalty will stay around the same level in the coming quarters as well. However, as the dependence of Maruti on Suzuki as far as its technology and brands are concerned is very high, it is difficult to lower it.
Source : IIPM Editorial, 2012.
An Initiative of IIPM, Malay Chaudhuri
and Arindam Chaudhuri (Renowned Management Guru and Economist).
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An Initiative of IIPM, Malay Chaudhuri
and Arindam Chaudhuri (Renowned Management Guru and Economist).
For More IIPM Info, Visit below mentioned IIPM articles.
Zee Business Best B-School Survey 2012
Prof. Arindam Chaudhuri's Session at IMA Indore
IIPM IN FINANCIAL TIMES, UK. FEATURE OF THE WEEK
IIPM strong hold on Placement : 10000 Students Placed in last 5 year
IIPM's Management Consulting Arm-Planman Consulting
Professor Arindam Chaudhuri - A Man For The Society....
IIPM: Indian Institute of Planning and Management
IIPM makes business education truly global Management Guru Arindam Chaudhuri Rajita Chaudhuri-The New Age Woman
IIPM B-School Facebook Page
IIPM Global Exposure
IIPM Best B School India
IIPM B-School Detail
IIPM Links
