Maruti Suzuki India Limited

Company information

• Date founded: 1981
• Industry: Automotive
• Corporate headquarters: New Delhi, India
• Type: Public

Overview

Founded by the government of India in 1981, Maruti Suzuki India Limited, formerly Maruti Udyog Limited, is a holding company involved in automobile manufacturing, sales, and related ventures headquartered in New Delhi, India. The following year it merged with Suzuki Motor Corporation as a minor partner and soon after opened its first manufacturing facility. The government divested its share to the Japanese automotive manufacturer in 2003. The company is a subsidiary of Suzuki Motor.

Maruti Suzuki was established to develop and produce cars for the middle class, although it has engaged in international sales as well. In the 2020s it is India’s largest passenger car company, claiming more than half the domestic car market. From a focus on middle-class customers, it expanded its offerings to include a range of options from basic compact cars to premium sport utility vehicles (SUVs). However, among most Indian customers, the low purchase and maintenance costs were the primary considerations when choosing a car. For this reason, the company stumbled when it tried to introduce high-end vehicles such as the Suzuki Grand Vitara XL-7. The manufacturer continued to dominate with more than 1.9 million in sales in 2022, about four times more than the closest competitor, Hyundai. This positive trend continued, and the company achieved its highest production year ever, manufacturing 2 million vehicles in the 2024 calendar year.

History

The automaker came about after many years of effort to develop a domestic manufacturer of cars that more people could afford. Automobiles were being manufactured in India in the 1950s, but in 1959 a report indicated that inexpensive autos were needed. About a decade later, the government asked private companies to apply for licenses to manufacture a small car. Of the eighteen proposals, only one company met with government approval. Maruti was a newcomer to auto manufacturing. It was owned by Sanjay Gandhi, son of Prime Minister Indira Gandhi. Sanjay Gandhi studied with the Rolls Royce company, where he earned a certification in mechanical engineering. He purchased some land and built a factory where his company produced only twenty-one cars in 1975–1976. Political circumstances interfered with his aspirations, and he stepped away. Then in 1978, the court ordered the faltering business to close down. Four months later, after Sanjay Gandhi died in a plane crash in June 1980, the government passed the Maruti Limited (Acquisition and Transfer of Undertakings) Act and took over the company.

The subsequent agreement with Suzuki of Japan gave Maruti the option of importing forty thousand Suzuki cars from Japan over two years. The first Maruti built in India was the 800, which began to roll off the production line on December 14, 1983. It was based on the Suzuki Fronte, a 1979 model designed to navigate the narrow streets of Japan’s cities. Although initially, it was a bare-bones, no-frills auto, the company opted to produce about 15 percent of the 800s with air conditioning and other comforts.

Maruti added a minivan, the Omni, to its lineup in 1984 to appeal to another segment of the market. It was powered by the same engine as the one in the 800. In 1985, the company introduced an off-road vehicle dubbed the Gypsy. This vehicle was based on the Suzuki Jimny. Two years later, the company made a foray into international sales when it exported five hundred vehicles to Hungary. In 1986, just three years after introducing its first model, Maruti Suzuki produced its one-millionth car. It hit another milestone in 1994 when it sold its one-millionth car in India. This prompted the company to open a second plant.

The first sedan, the Maruti 1000, debuted in 1990. It was redesigned and rebranded four years later as the Esteem. The 1993 introduction, the hatchback Zen, also was wildly popular. Such success prompted the company to open a second plant in 1995 and a third four years later. In the late 1990s, Maruti rolled out a variety of models, including the Wagon R. The Zen D, which arrived in 1998, was the company’s first diesel car.

The Maruti Suzuki Alto, a budget family hatchback, arrived in 2000. Just four years later, it surpassed the Maruti 800 as India’s best-selling car. The Alto held the title for fifteen consecutive years. It was replaced in the top spot by another Maruti Suzuki, the Dzire, a subcompact sedan introduced in 2008.

Another hatchback, the Swift, was introduced in 2005 and became popular with young drivers. The 2007 SX4 was comfy but lacked the power desired by consumers. A diesel version arrived too late to dominate the segment, so it was dropped. This made way in 2014 for the Ciaz, which years later remained among the top midsize sedans in India. Maruti made a misstep by introducing a higher-priced vehicle, the Grand Vitara, but corrected its course in 2016 with the Vitara Brezza, a popular compact SUV.

Maruti Suzuki has nine subsidiaries. Multiple entities are insurance related: Maruti Insurance Business Agency Ltd., Maruti Insurance Distribution Services Ltd., Maruti Insurance Agency Solutions Ltd., Maruti Insurance Agency Network Ltd., Maruti Insurance Agency Services Ltd., Maruti Insurance Agency Logistics Ltd., and Maruti Insurance Broker Ltd. Maruti True Value Solutions Ltd. focuses on pre-owned vehicles. Servicing and repairs are the scope of JJ Impex (Delhi) Pvt. Ltd.

The company established a collaborative project, the Driving Training and Research Institute, in 2006 with the Delhi government. Through 2007, it developed many other projects. It formed Magneti Marelli Powertrain India Pvt. Ltd. to manufacture electric control units in a joint venture agreement with Magneti Marelli Powertrain SpA. A joint venture agreement with Futaba Industrial Co. Ltd. led to the creation of FMI Automotive Components Ltd., which manufactures components of exhaust systems. It entered the car finance arena with an agreement with Shriram City Union Finance Ltd. Maruti Suzuki has worked to increase its exports. It ships several entry-level models to more than one hundred countries and is the first Indian car company to have exported half a million autos.

The company operates multiple factories at two manufacturing facilities. The Gurgaon facility covers more than three hundred acres and houses three plants that together can produce almost seven hundred thousand cars a year. The Manesar facility is twice as large. Among its plants is the company’s diesel engine production facility manufactured under the Suzuki Powertrain India Limited (SPIL) joint venture company.

In 2015, the company established the New Exclusive Automotive Experience (NEXA), a retail platform it described as a premium experience to sell luxury vehicles. Its brands include the S-Cross SUV, Ciaz sedan, Baleno hatchback, Ignis compact urban SUV, and a multi-purpose vehicle (MPV) called the XL6. Like many car companies in North America, the COVID-19 pandemic caused disruptions in supply chains that affected the manufacturing of vehicles, though by early 2023, these issues began to dissipate. In 2023, Maruti Suzuki unveiled the Fronx, a subcompact crossover SUV based on the Baleno, and the 5-door Jimny. The following year, Maruti Suzuki introduced the fourth-generation Swift in India, featuring a redesigned exterior and interior, improved aerodynamics, and enhanced safety features.

Impact

Labor issues at Maruti plants have been sparse on average. Only seven strikes occurred in the first three decades, with an eleven-year stretch in the early twenty-first century when no workers went on strike at all. However, four strikes took place in 2011. Observers suggested that this turnaround was due to increased pressure in the late 2010s to boost output. Workers’ breaks were cut, allowing them a thirty-minute lunch and two brief breaks of 7.5 minutes each during an eight-hour shift. By 2011, production had increased 17 percent at the Gurgaon plant and 40 percent at Manesar.

The company was notably in the news in 2012 after workers burned the factory in Manesar, Haryana. One man died, and more than seventy were wounded in the clash between workers and management that reportedly began as a disagreement between an employee and a supervisor. The conflict occurred after days of simmering anger among workers who said management had promised them a raise. The victim was the human resources manager. He was beaten and died because he was too injured to escape the burning structure. Experts cited a variety of factors that led to the violence, including complex labor laws, such as those governing how and when workers may be fired. Such issues, businesses say, provide an incentive to hire contract workers. About 40 percent of Maruti workers were contract workers who were paid less, received no benefits, and might be fired without warning.

Maruti’s varied divisions include multiple insurance subsidiaries. While it is not the only auto manufacturer to offer services ranging from purchase through insurance purchases and service, Maruti goes a step beyond. It has a driving school with courses offering from 8.5 hours for drivers who lack confidence up to a month-long course for people who have never driven before.

India does not have a policy requiring manufacturers to recall vehicles to rectify problems. Instead, it relies on a voluntary recall code created by the Society for Indian Automobile Manufacturers. Maruti Suzuki has announced several model recalls. In 2020, it recalled more than forty thousand Eecos to fix a headlight fault. In 2021, in one of the biggest auto recalls in India, it announced possible safety issues related to the motor generator unit. The recall covered more than 181,000 vehicles. In 2023, the company was forced to recall over 17,000 vehicles due to faulty airbags. In the mid-2020s, the company increased its investments in renewable energy projects like solar power and biogas. It also continued working toward launching its first electric vehicle and electric charging sites and worked on making lighter cars to boost fuel efficiency and decrease emissions.

Maruti has had several successful ad campaigns. Among the most well-known are “Kitna deti hai” and “Papa petrol khatam hi ni hunda.” The former is a question about return on investment (ROI), roughly, “What does it give?” The humorous ads, which debuted in 2010, included people who are learning about the features of a futuristic aircraft asking, “Kitna deti hai?” The “Papa petrol khatam hi ni hunda” ads aired in 2003. They featured a Sikh boy driving his toy car all over the house. The phrase is a reference to fuel efficiency.

Bibliography

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“Maruti Suzuki Completes 5 Years of NEXA: 11 Lakh Customers, Five Models.” Financial Express, 23 July 2020, www.financialexpress.com/auto/car-news/maruti-suzuki-nexa-maruti-suzuki-ignis-ciaz-xl6-scross-baleno-maruti-cars-maruti-dealership/2033039. Accessed 20 Jan. 2025.

“Maruti Suzuki Faulty Airbags: Maruti Suzuki Recalls 17,362 Vehicles for Faulty Airbags.” The Economic Times, 18 Jan. 2023, economictimes.indiatimes.com/industry/auto/cars-uvs/maruti-suzuki-recalls-17362-vehicles-for-faulty-airbags/articleshow/97076893.cms. Accessed 20 Jan. 2025.

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