MARKET SHARE

Toyota & Suzuki tie-up:

Toyota seeks help of Maruti
for improving supply chain

In October 2016, two Japanese giants, Toyota and Suzuki announced

about sharing of their technologies for better, more fuel efficient and
lower emission cars. Today, the companies agreed to start formal talks
to establishing a partnership. Sharing would take place on the levels of
IT, R&D, autonomous and 'greener' cars. According to Peter Lyon, a
contributor for Forbes, the Japanese automotive industry is perplexed
by this decision, however, according to Toyota's current president,
Akido Toyoda, “ There is a limit to the research and development that
a company can do individually.”
The baffled situation in Japan is also due to the fact that Toyota's low-
cost car brand, Daihatsu competes directly with Suzuki's cars and here
the two are in discussion to share new vehicle technologies.
Undoubtedly, this step would witness the introduction of more cost-
effective technologies, however, how much of it can reach the
consumer is a 'wait and watch' game. The companies also mentioned
during the October press conference that this step is needed to survive
the 'unprecedented' change as per a report in Wall Street Journal.
Toyota also admits that this tie-up would aid in improving their
position in the North American and European markets with other
competitors. Another reason speculated is the Renault -Nissan alliance
with that has used partnerships to lower costs of their vehicles and is a
healthy competitor to the Japanese duo.
Suzuki has been known to develop cars that are aggressively priced
and Toyota can also learn a few things from the 'Frontier Spirit'.
Likewise, development of greener technologies from the second largest
global car manufacturer may be witnessed in affordable cars. So, a
win-win situation at both ends. This is not the first alliance for Toyota
as it already owns a stake in Subaru for hybrid engine technology with
Mazda Motor Corporation. BMW AG also works with the Japanese car
brand in the development of their electric vehicle technology. Suzuki,
however, doesn't have any such partnership and the last time it tried
forging one with Volkswagen AG, the experience turned out to be sour
for both companies.
Also Read: Toyota loses the ‘World’s Biggest Automaker’ crown to Volkswagen
The Indian automotive sector would surely benefit from this tie-up
as Maruti Suzuki is one of the key players and the largest partners of
Global Suzuki. However, making more features that revolve around
convenience as well as safety while incurring less ownership cost while
keeping the occupants comfortable and safe, would involve both
companies sharing complete technologies. That said, there is only a
certain level till which technologies between rivals can be shared
without violating the Antitrust Laws. The new tie-up would, in any
case, bring greener, more fuel-efficient cars for a start, later on also
evolving in the self-driving/autonomous space.
Toyota too has been trying to expand its presence in India but the
company has only two models priced under Rs 10 lakh, owing to which
it misses out on the largest car segment in the country. The
partnership with Suzuki will allow Toyota to get access to the supplier
network of Maruti Suzuki, which will allow Toyota to make more of
low-cost cars at a competitive price. There is no official word yet from
the Indian arms of both companies but as baffling as it may sound,
there's more to win for both companies in this partnership than losing.
UPCOMING CARS OF MARUTI
Maruti Suzuki Jimny BY SEP 2017
History
Maruti Suzuki India Limited (MSIL), formerly known as Maruti Udyog
Limited, a subsidiary of Suzuki Motor Corporation of Japan, is India's
largest passenger car company, accounting for over 50 per cent of the
domestic car market. Maruti Udyog Limited was incorporated in 1981 under
the provisions of Indian Companies Act 1956 and the government of India
selected Suzuki Motor Corporation as the joint venture partner for the
company. In 1982 a JV was signed between Government of India and
Suzuki Motor Corporation.
It was in 1983 that the India’s first affordable car, Maruti 800, a 796 cc
hatch back was launched as the company went into production in a record
time of 13 month.
More than half the number of cars sold in India wear a Maruti Suzuki
badge. They are a subsidiary of Suzuki Motor Corporation Japan. The
company offer full range of cars– from entry level Maruti 800 & Alto to
stylish hatchback Ritz, A star, Swift, Wagon R, Estillo and sedans DZire,
SX4 and Sports Utility vehicle Grand Vitara.
Since inception, the company has produced and sold over 7.5 million
vehicles in India and exported over 500,000 units to Europe and other
countries.
They were born as a government company, with Suzuki as a minor partner,
to make a people's car for middle class India. Over the years, its product
range has widened, ownership has changed hands and the customer has
evolved. What remains unchanged, then and now, is their mission to
motorise India. MSIL’s parent company, Suzuki Motor Corporation, has
been a global leader in mini and compact cars for three decades. Suzuki's
technical superiority lies in its ability to pack power and performance into a
compact, lightweight engine that is clean and fuel efficient. The same
characteristics make their cars extremely relevant to Indian customers and
Indian conditions. Product quality, safety and cost consciousness are
embedded into their manufacturing process, which they have inherited from
their parent company.
Right from inception, Maruti brought to India, a very simple yet powerful
Japanese philosophy 'smaller, fewer, lighter, shorter and neater'
From the Japanese work culture they imbibed simple practices like an open
office, a common uniform and common canteen for everyone from the
Managing Director to the workman, daily morning exercise, and quality
circle teams.
Maruti Suzuki exports entry–level models across the globe to over 100
countries and the focus has been to identify new markets. Some important
markets include Latin America, Africa and South East Asia.Interestingly
with a brand new offering A–star, Maruti Suzuki is ready to take on
European markets.Maruti Suzuki sold 53,024 units during 2007–08. This is
the highest ever export volume in a year for the company, and marked a
growth of 35 per cent over the previous year.Maruti Suzuki has exported
over 552,000 units cumulatively with about 280,000 units to Europe and
Israel .
Maruti Suzuki has two state–of–the–art manufacturing facilities in India.
The first facility is at Gurgaon spread over 300 acres and the other facility is
at Manesar, spread over 600 acres in North India. The Gurgaon
facility – Maruti Suzuki's facility in Gurgoan houses three fully integrated
plants. While the three plants have a total installed capacity of 350,000 cars
per year, several productivity improvements or shop floor Kaizens over the
years have enabled the company to manufacture nearly 700,000 cars/
annum at the Gurgaon facilities.
The Manesar facility – Its Manesar facility has been made to suit Suzuki
Motor Corporation (SMC) and Maruti Suzuki India Limited's (MSIL) global
ambitions. The plant was inaugurated in February 2007. At present the
plant rolls out World Strategic Models Swift , A–star & SX4 and DZire.The
plant has several in–built systems and mechanisms.
Diesel Engine Plant– Suzuki Powertrain India Limited – Suzuki Powertrain
India Limited the diesel engine plant at Manesar is SMC's & Maruti's first
and perhaps the only plant designed to produce world class diesel engine
and transmissions for cars. The plant is under a joint venture company,
called Suzuki Powertrain India Limited (SPIL) in which SMC holds 70 per
cent equity the rest is held by MSIL. This facility has an initial capacity to
manufacture 100,000 diesel engines a year. This will be scaled up to
300,000 engines/annum by 2010.
In 2012 Senior management members were injured as workers resort to
violence at Maruti Suzuki’s Manesar plant.
Product range of the company includes:

It offer full range of cars– from entry level Maruti

800 & Alto to stylish hatchback Ritz, A star,
Swift, Wagon R, Estillo and sedans DZire, SX4
and Sports Utility vehicle Grand Vitara.
 Maruti Alto 800

 Omni

 Gypsy

 Zen Estilo

 Wagon R

 Versa

 A– Star

 Ritz

 SX4

 Dzire

 Grand Vitara

 Ertiga

 Celerio
Milestones :

2014: Maruti Suzuki announces global

debut of ‘Celerio’ with revolutionary Auto
Gear Shift
2013: Maruti Suzuki introduces stylish
Stingray
2012 :India's favourite car Maruti Suzuki
Alto crosses the 20 Lakh sales mark
2011: Maruti Suzuki India unveiled its much
awaited sportier and stylish car, the all new
'Swift'.
2011: On march 15, Maruti Suzuki India
rolled out its 1 Crore (ten millionth) car.The
historic 1 Crore car, a Metallic Breeze Blue
coloured WagonR VXi (Chassis No
243899) rolled out from the Company's
Gurgaon plant.
2010: Maruti Suzuki has been ranked
India's most Trusted Brand in Automobile
Sector by India's leading Business
newspaper The Economic Times.
2009 – MSIL adopts voluntary fuel
disclosure.First shipment of A–star leaves
Mundra Port–jan 10.A–star
bags,Zigwheels”car of the year award”A–
star rated best small car of the year–
autocar–UTVi.
2008 – World Premiere of concept A–star at
9th Auto Expo, New Delhi.
2007 – Swift diesel launched.New car plant
and the diesel engine facility commences
operations during 2006–07 at
manesar,Haryana.SX4–Luxury Sedan
Launched with the tag line “Men are
black”.Maruti launches Grand Vitara.
2006–J.D.Power Survey award for the sixth
year.MSIL has changed its EMS from ISO
14001:1996 version to ISO 14001:2004
version w.e.f.1st july
2005– MSIL was re–certified in 2005 as per
ISO 14001:2004 standards.
2004 – A new esteem launched –second
successful facelift by maruti engineers.
2003 – Maruti gets listed on BSE and
NSE.IPO(issue oversubscribed 11.2
times)New zen launched–first facelift by
maruti engineers.
2002 – Divestment –Suzuki Motor
Corporation(SMC)acquires majority stake in
MUL.Maruti Finance & Insurance launched.
2001 – Turn around with profits Rs104.5
crore.Four new business–True
value,Insurance,Finance.Maruti Versa
launched.Maruti True Value launched.
2000 – Maruti alto launched.First car
company in India to launch call centre.IDTR
launched jointly with the Delhi government
to promote safe driving habits.
 Achievements/ recognition:
 The company takes great pride in sharing that
customers have rated Maruti Suzuki first once
again in Customer Satisfaction Survey conducted
by independent body, J.D.Power Asia Pacific. It is
9th time in a row.
 Maruti Suzuki wins 'Golden Peacock Eco–

Innovation Award'
 Maruti Suzuki Ranks Highest in Automotive

Customer Satisfaction in India For Ninth

Consecutive Year.
 Maruti Suzuki becomes the first Indian car

company to export half a million cars

Other Accolades
During 2009–10, the company, its products and
services received reputed awards and accolades
instituted by independent expert groups, media
houses and research agencies.
These Include
 Rated as No. 1 in J D Power Sales Satisfaction

Index
 Hatchback of the year – Ritz by Autocar

 Car of the year – Ritz by Business Motoring

 Manufacturer of the year by CNBC Overdrive

 Ranked third amongst global car companies in the

World's Most Reputed Company Survey 2009

 National Award for Excellence in Corporate
Governance by ICSI

Independent Auditors' Report

To the Members of Maruti Suzuki India Limited
REPORT ON THE STANDALONE FINANCIAL STATEMENTS
1. We have audited the accompanying standalone financial statements
of Maruti Suzuki India Limited ("the Company"), which comprise the
Balance Sheet as at March 31, 2015, the Statement of Profit and Loss, the
Cash Flow Statement for the year then ended, and a summary of the
significant accounting policies and other explanatory information.
MANAGEMENT'S RESPONSIBILITY FOR THE STANDALONE
FINANCIAL STATEMENTS
2. The Company's Board of Directors is responsible for the matters stated
in Section 134(5) of the Companies Act, 2013 ("the Act") with respect to the
preparation of these standalone financial statements to give a true and fair
view of the financial position, financial performance and cash flows of the
Company in accordance with the accounting principles generally accepted
in India, including the Accounting Standards specified under Section 133 of
the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014 and
Accounting Standard 30, Financial Instruments: Recognition and
Measurement issued by the Institute of Chartered Accountants of India to
the extent it does not contradict any other accounting standard referred to
in Section 133 of the Act, read with Rule 7 of the Companies (Accounts)
Rules, 2014. This responsibility also includes maintenance of adequate
accounting records in accordance with the provisions of the Act for
safeguarding of the assets of the Company and for preventing and
detecting frauds and other irregularities; selection and application of
appropriate accounting policies; making judgments and estimates that are
reasonable and prudent; and design, implementation and maintenance of
adequate internal financial controls, that were operating effectively for
ensuring the accuracy and completeness of the accounting records,
relevant to the preparation and presentation of the financial statements that
give a true and fair view and are free from material misstatement, whether
due to fraud or error.
AUDITORS' RESPONSIBILITY
3. Our responsibility is to express an opinion on these standalone financial
statements based on our audit.
4. We have taken into account the provisions of the Act and the Rules
made thereunder including the accounting standards and matters which are
required to be included in the audit report.
5. We conducted our audit in accordance with the Standards on Auditing
specified under Section 143(10) of the Act and other applicable
authoritative pronouncements issued by the Institute of Chartered
Accountants of India. Those Standards and pronouncements require that
we comply with ethical requirements and plan and perform the audit to
obtain reasonable assurance about whether the financial statements are
free from material misstatement.
6. An audit involves performing procedures to obtain audit evidence about
the amounts and the disclosures in the financial statements. The
procedures selected depend on the auditor's judgment, including the
assessment of the risks of material misstatement of the financial
statements, whether due to fraud or error. In making those risk
assessments, the auditor considers internal financial control relevant to the
Company's preparation of the financial statements that give a true and fair
view, in order to design audit procedures that are appropriate in the
circumstances, but not for the purpose of expressing an opinion on whether
the Company has in place an adequate internal financial controls system
over financial reporting and the operating effectiveness of such controls. An
audit also includes evaluating the appropriateness of the accounting
policies used and the reasonableness of the accounting estimates made by
the Company's Directors, as well as evaluating the overall presentation of
the financial statements.
7. We believe that the audit evidence we have obtained is sufficient and
appropriate to provide a basis for our audit opinion on the standalone
financial statements.
OPINION
8. I n our opinion and to the best of our information and according to the
explanations given to us, the aforesaid standalone financial statements
give the information required by the Act in the manner so required and give
a true and fair view in conformity with the accounting principles generally
accepted in India, of the state of affairs of the Company as at March 31,
2015, and its profit and its cash flows for the year ended on that date.
REPORT ON OTHER LEGAL AND REGULATORY
REQUIREMENTS
9. As required by 'the Companies (Auditor's Report) Order, 2015', issued by
the Central Government of India in terms of sub–section (11) of section 143
of the Act (hereinafter referred to as the "Order"), and on the basis of such
checks of the books and records of the Company as we considered
appropriate and according to the information and explanations given to us,
we give in the Annexure a statement on the matters specified in
paragraphs 3 and 4 of the Order.
10. As required by Section 143 (3) of the Act, we report that:
(a) We have sought and obtained all the information and explanations
which to the best of our knowledge and belief were necessary for the
purposes of our audit.
(b) In our opinion, proper books of account as required by law have been
kept by the Company so far as it appears from our examination of those
books.
(c) The Balance Sheet, the Statement of Profit and Loss, and the Cash
Flow Statement dealt with by this Report are in agreement with the books
of account.
(d) In our opinion, the aforesaid standalone financial statements comply
with the Accounting Standards specified under Section 133 of the Act, read
with Rule 7 of the Companies (Accounts) Rules, 2014 and Accounting
Standard 30, Financial
Instruments: Recognition and Measurement issued by the Institute of
Chartered Accountants of India to the extent it does not contradict any
other accounting standard referred to in Section 133 of the Act, read with
Rule 7 of the Companies (Accounts) Rules, 2014.
(e) On the basis of the written representations received from the directors
as on March 31, 2015, and taken on record by the Board of Directors, none
of the directors is disqualified as on March 31, 2015, from being appointed
as a director in terms of Section 164 (2) of the Act.
(f) With respect to the other matters to be included in the Auditor's Report
in accordance with Rule 11 of the Companies (Audit and Auditors) Rules,
2014, in our opinion and to the best of our knowledge and belief and
according to the information and explanations given to us:
i. The Company has disclosed the impact of pending litigations as at March
31, 2015, on its financial position in its standalone financial statements –
Refer Note 7 & 32.
ii. The Company has long–term contracts including derivative contracts as
at March 31, 2015 for which there were no material foreseeable losses.
iii. There has been no delay in transferring amounts, required to be
transferred, to the Investor Education and Protection Fund by the Company
during the year ended March 31, 2015.
Annexure to Independent Auditors' Report
Referred to in paragraph 9 of the Independent Auditors' Report of even
date to the members of Maruti Suzuki India Limited on the standalone
financial statements as of and for the year ended March 31, 2015.
i) (a) The Company is maintaining proper records showing full particulars,
including quantitative details and situation, of fixed assets.
(b) The fixed assets of the Company have been physically verified by the
Management during the year except furniture and fixtures, office appliances
and certain other assets having an aggregate net book value of Rs. 2,638
million and no material discrepancies have been noticed on such
verification. In our opinion, the frequency of verification is reasonable.
ii. (a) The inventory excluding stocks with third parties and tools and
machinery spares having an aggregate value of Rs. 1,585 million has been
physically verified by the Management during the year. In respect of
inventory lying with third parties, these have substantially been confirmed
by them. In our opinion, the frequency of verification is reasonable.
(b) In our opinion, the procedures of physical verification of inventory
followed by the Management are reasonable and adequate in relation to
the size of the Company and the nature of its business.
(c) On the basis of our examination of the inventory records, in our opinion,
the Company is maintaining proper records of inventory. The discrepancies
noticed on physical verification of inventory as compared to book records
were not material.
iii. The Company has not granted any loans, secured or unsecured, to
companies, firms or other parties covered in the register maintained under
Section 189 of the Act. Therefore, the provisions of Clause 3(iii), (iii)(a) and
(iii)(b) of the said Order are not applicable to the Company.
iv. In our opinion and according to the information and explanations given
to us, having regard to the explanation that, except for certain items of
inventory/fixed assets which are of special nature for which suitable
alternative sources do not exist, there is an adequate internal control
system commensurate with the size of the Company and the nature of its
business for the purchase of inventory, fixed assets and for the sale of
goods and services. Further, on the basis of our examination of the books
and records of the Company, and according to the information and
explanations given to us, we have neither come across nor have been
informed of any continuing failure to correct major weaknesses in the
aforesaid internal control system.
v. The Company has not accepted any deposits from the public within the
meaning of Sections 73, 74, 75 and 76 of the Act and the rules framed
there under to the extent notified.
vi. The Central Government of India has not specified the maintenance of
cost records under sub–section (1) of Section 148 of the Act for any of the
products of the Company.
vii. (a) According to the information and explanations given to us and the
records of the Company examined by us, in our opinion, the Company is
generally regular in depositing the undisputed statutory dues in respect of
income tax, service tax and is regular including provident fund, employees'
state insurance, sales tax, wealth tax, duty of customs, duty of excise,
value added tax, cess and other material statutory dues, as applicable, with
the appropriate authorities.
c) The amount required to be transferred to Investor Education and
Protection Fund has been transferred within the stipulated time in
accordance with the provisions of the Companies Act, 1956 and the rules
made thereunder.
viii.The Company has no accumulated losses as at the end of the financial
year and it has not incurred any cash losses in the financial year ended on
that date or in the immediately preceding financial year.
ix. According to the records of the Company examined by us and the
information and explanation given to us, the Company has not defaulted in
repayment of dues to any financial institution or bank or debenture holders
as at the balance sheet date.
x.In our opinion, and according to the information and explanations given to
us, the Company has not given any guarantee for loans taken by others
from banks or financial institutions during the year. Accordingly, the
provisions of Clause 3(x) of the Order are not applicable to the Company.
xi. In our opinion, and according to the information and explanations given
to us, the term loans have been applied, on an overall basis, for the
purposes for which they were obtained.
xii. During the course of our examination of the books and records of the
Company, carried out in accordance with the generally accepted auditing
practices in India, and according to the information and explanations given
to us, we have neither come across any instance of material fraud on or by
the Company, noticed or reported during the year, nor have we been
informed of any such case by the Management.