by Maruti Suzuki is the first name we remember because of the Indian roads but in 1980 Maruti company was established during the time when Indira Gandhi was the prime minister with an idea that every common man should travel in a car. It started but initially 74% of the water in Maruti company was in the hands of the Indian government and the company cars were also sold with the name Maruti but when Maruti cars came in 2012 the Suzuki logo came instead of the Maruti logo. But the point here is how did all this actually happen and why did the Indian government sell its original stake in Maruti Suzuki which is the number one car manufacturer in India I am going to tell you in this video what is the business strategy done. After the independence of India there were two major companies competing in the Indian automobile market namely Hindustan Motors and Premier Automobile Limited.
at that time people thought that a car was only owned by the rich. In 1971 when Indira Gandhi was the Prime Minister of India her son Sanjay Gandhi had a lot of interest in cars. Gandhi told him and the company that was born from this idea was Maruti Limited that is in 1971 Indira Gandhi who was the Prime Minister founded a company called Maruti Limited to manufacture the car for her son dream project named Peoples Car and finally appointed Sanjay Gandhi as the managing director of the company and announced
Although Sanjay Gandhi made some prototype cars none of them were successful finally this company could not make a car that is accessible to the common man but the reason for this is that India still does not have the advanced technology to make a car at a low price but the infrastructure is not there so this is a project called People Car. They tried to make a partnership with foreign companies like Volkswagen and Nissan in order to take it forward in any way but nothing worked for this company but during this time some series of incidents happened in India such as Indira Gandhi imposing emergency in India in 1975 Congress party lost power in 1977 and Sanjay Gandhi in 1980 a plane Injured in the accident so due to this series of insurance the company called Maruti Limited closed down and the project called Peoples Car was finally scrapped but the story did not end here because it was Indira Gandhi son but it was Sanjeev Gandhi dream project and Indira Gandhi was emotionally connected to this project so 1980 After becoming the Prime Minister he rekindled the project called People Car and to know the positive and negative aspects of this project he spoke to a businessman in the Nehru family Mr. Arun Nehru but Arun Nehru advice was that it is not impossible to revive the Maruti project but in present India. According to the situation it will be very difficult for the Indian Government alone to complete this project
So he advised me that this project can be made possible through a joint venture with a foreign company so according to this advice Indira Gandhi prepared a team and sent it to talk to all the automobile companies in the world and the company that finally agreed was Suzuki Motor Corporation of Japan to deal with Suzuki Company. Finally in 1981 the Indian Government established a new company which is Maruti Udyoga Limited but 74% share in the company called Udyoga Limited is in the hands of the Indian Government and 26% is in the hands of Suzuki Company. After a few days the Indian government started the first manufacturing unit of Maruti company at a place called Gurugam in Haryana. The first car Maruti 800 was launched by the Indian government for only 50 thousand. Once you see it on the roads, think about how big an impact it has created. Maruti company has achieved good success with cars like Maruti 800 Omni and Gypsy so seeing that there is a good scope to do business in the Indian market in the future Suzuki company has been increasing their share in Maruti company from just 26% share in 1982. The existing Suzuki company was increasing till 1988 but here you need to know an important thing that is before 1991 foreign companies should not have 50% share in any company in India but in 1991 when PV Narasimha Rao was the prime minister he made some changes in the economy of our country and removed this law
So now in 1991 Suzuki increased its stake in Maruti Company from 40% to 50% as the opportunity arose for the Suzuki company.
So now Suzuki company has an equal share in Maruti along with the government so in 1991 the name of this company changed from Maruti Employees Limited to Maruti Suzuki but the point here is that in 1991 the Indian government invited foreign companies to do their business in India through economic reforms and many foreign automobile companies started their business in India. Like Toyota, Honda, Hyundai, Ford etc but Maruti Suzuki company which has rolled the Indian markets single handed so far has suddenly got a situation to compete with these foreign companies but now let us see what are the strategies implemented by Maruti Suzuki to teach these form companies in the Indian market from 1982 till now. The most bought cars are Maruti Suzuki cars but the reason for this is pricing. The main reason behind the establishment of this company is to make affordable cars for Indians so this is the basic business model of this company. It comes at a very low price but in India more than 70% to 80% are poor and middle class people if they all want to buy a car they think of a budget before its features and safety ratings and buy a car that offers more features in it. Offering better features and design can easily attract more customers but I am not talking about safety here but only about maintenance.
Another important reason for customers to buy more Maruti Suzuki cars is that compared to the cars of other companies the maintenance of Maruti Suzuki cars does not cost much to the customers and the beauty service center charges and spare parts are also available at a low price, so the second point of maintenance that a customer thinks about while buying a car is less. The cost of maintenance is high which means the customer does not want to buy it, so even here Maruti Suzuki is seen as a better option, this company is showing interest by establishing a strong service network in the whole of India, but if we go back 20 years the cars most loved by all Indian customers are hatchbacks. So exactly, Maruti Suzuki also used to launch their cars targeting this segment and Alto came as a part of this and this Alto is one of the best selling cars in India after Maruti 800. It has been around 20 years since this car was launched in India. But still the demand for this car has not decreased and not only Maruti Suzuki has turned on many hatchback models like Swift Wagonor and Balino and Maruti Suzuki has become a company that gives more options to every middle class person who wants to buy a car in India. The budget segment cars are also targeted and companies like Skoda and Volkswagen are doing good business so Maruti Suzuki noticed this and launched a project to include the premium customers in India in their business by selling premium and high range cars exclusively in the showrooms and basic also increases
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