Milestone 1 Business Research
Lauren Winters
Southern New Hampshire University
QSO 500 Business Research
Milestone 1 Business Research
Research Problem: Maruti is seeing a decline in sales of entry-level A-segment vehicles due to
changes in consumer demand.
Research Objective: To add amenities to the A-segment vehicle that will meet changing
consumer demands.
Research Question: Will creating a more spacious hatch model that is fuel-efficient with a lower
overall cost help MSIL to meet changing consumer demand?
Introduction
Maruti Suzuki India LTD. (MSIL) has been a dominating figure in the Indian A-segment
auto industry offering entry, mid and premium hatch vehicles. After years of profitability and
success in many cities, in 2012, the sales started to decline. "The dealer margin on A-Segment
cars was shrinking in 2013, MSIL's data from dealerships across the country showed the drop
was in the entry-level vehicles (Mukherjee 2015 p.4)." Reasons for the decline partly came from
competition entering the market, such as Hyundai and Tata, both well-known manufacturers with
reputable reputations. "Competition was expected to intensify with more multinational
companies entering the Indian market and introducing India-specific products targeting the entry
and mid-level hatch models (Mukherjee 2015 p.2)." Another obstacle that Maruti faced was a
recent change in consumer demands with new regulations following, adding additional costs to
manufacturing. "Emissions and safety regulations are important during product development.
and all new vehicles were required to comply with offset-and-crash regulations, which would
add to the price of the vehicles (Mukherjee 2015 p.6)." New regulations would either limit the
Milestone 1 Business Research
attributes consumers received or increase the cost of the vehicle, causing new buyers to be
reluctant to purchase the car either way.
Research Problem
Maruti Suzuki India is a subsidized motor vehicle corporation of Suzuki in Japan, famous
for its a-Segment vehicles. In the years 2008/2009, MSIL accounted for 60% of total sales for A-
Segment cars; by 2013, they only accounted for 49% of sales for A-segmented vehicles. With
stiff competition from Hyundai and Tata, whom both had product and development centers that
aligned on a global market also, the competition from other multi-national vehicle corporations
was impacting MSIL's sales. The sales margin for A-segment vehicles began to decrease in 2013,
which means that the amount of profit generated from the sale of A-segment vehicles were
declining. "The Maruti sales team had tracked data from the dealerships across the country and
found that this was more pronounced for the entry-level more than the premium hatch category
(Mukherjee 2015 p.4). The business problem is Maruti is seeing a decline in sales of entry-level
A-segment vehicles due to changes in consumer demand
Stakeholders
Stakeholders who are significantly impacted by declining sales are all shareholders, from
the years of 2008-2013 shares declined from 61% to 49% for MSIL. Employees are also affected
by the decline in demand; a decrease in production also decreases the talent needed to run the
organization. Maruti Suzuki dealership owners and authorized service stations also lost profits
due to low sales. Loyal