1 MARUTI SUZUKI INDIA LIMITED March, 2009
Sep 08, 2014
1
MARUTI SUZUKI INDIA LIMITEDMarch, 2009
2
Safe HarbourThis presentation might contain forward looking statements which
involve a number of risks, uncertainties and other factors that could cause the actual results to differ materially from those in the forward looking statements.
Maruti Suzuki undertakes no obligation to update these to reflect the events or circumstances thereof.
This presentation also contains reference to the findings of various reports available in the public domain. Maruti Suzuki takes no responsibility as to their accuracy or that the company subscribes to those findings.
3
Agenda
About Maruti SuzukiThe year so far…Way forward Maruti Suzuki
4
About Maruti Suzuki
5
Company at a glanceEquity Structure 54.21% Suzuki, 45.79% with FIs, Public
Turnover Rs. 188.2 bn
Net Profit Rs. 17.3 bn
Sales 764,842 cars
Market Share 54% (Passenger Cars including Van type vehicles)
Manpower Over 7720 employees in 4 plants
Models 12 brands with over 100 variants
FY 08
FY 08
FY 08
6
Our FacilitiesGurgaon Facility: 300 acres, capacity 700,000 cars/ annum
Assembly plants 1,2,3 & Engine plants F, G and new K series Manesar Facility: 600 acres, capacity 300,000 cars/ annum
Assembly plant 4Diesel Engine plant, SPIL: JV SMC & MSIL, 200,000 units/ annum Supplier’s Park: 100 acresTotal Capacity: One Million
7
8
Product Portfolio
A1< 3400mm (also in LPG) 796cc A2 (3401-4000 mm) 1061ccA2 (3401-4000mm) 796 cc A2 (3401-4000 mm) 1061cc, in LPG also
A2 (3401-4000 mm) 1298 cc in Petrol1248cc in Diesel
A3 (4001-4500mm)-1290cc in Petrol & 1248cc in Diesel
A3 (4001-4500 mm)1598cc
C-segment- Van Type 800 ccSUV segment 4 Wheel: 2 litr SUV segment 4 Wheel: 1300cc C-segment- Van Type 1300 cc
A2 (3401-4000 mm) 998cc
9
78% 79% 78%
17% 19% 20% 17% 18%
3% 4% 3% 4% 4%
76% 77%
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
2003-04 2004-05 2005-06 2006-07 2007-08
A1+A2+C A3 A4-A6
Share of Segments in the Industry
10
Market Share over the years
55.06
54.5
55.1
54.6
54.7
54.9
15.9
19
12.9
12.1
4.3
4
16.6
17.08
16
16.8
15.9
14.29
16.4
15.4
4.3
2.7
4.1
5.1
2003-04
2004-05
2005-06
2006-07
2007-08
2008-09 10M
Maruti Hyundai Tata Honda
(In%)
More than half the market for the past 20 years since 1986-87
11
Sales Network
243280
325
375
491
600627
161182 197
227
312
393413
3659 51506903
880511770
14666 14454
100
200
300
400
500
600
700
2002-03 2003-04 2004-05 2005-06 2006-07 2007-08 2008-09 (Jan)
-50000
-40000
-30000
-20000
-10000
0
10000
20000
Dealer Sales Outlets: Urban and Rural Formats
Cities Covered
Dealer Sales Force
12
Service Network
1920
2628 2673
1001
12201264
1500
1700
1900
2100
2300
2500
2700
2900
2003-04 2004-05 2005-06 2006-07 2007-08 2008-09 (Jan)900
1100
1300
1500
1700
1900
Service Outets
Cities Covered
13For 9 years Maruti Suzuki has been the only player above industry average
Customer Satisfaction JD Power Assessment
14
Pre-owned car business
Helps in exchange salesEnhances residual value thereby reducing cost of ownershipNetwork : 304 True Value Dealers in 179 cities83,107 units new cars sold through exchange in 10 months FY09.
15
Technology at Maruti Suzuki
16
Eight new models in 40 months
17
Next Generation: KB Engine Technology1 litre All Aluminium engine67ps / 90nmEuro-5 compliant A-star & Splash Fuel Efficiency- 19.59km/l on A-starImproved NVH
(Noise, Vibration & Harshness)
18
Diesel technology
Swift & DZire, Splash shortly1.3L - 75 bhp - 190 Nm torque5 Step Multi Injection Common RailGood NVH, not usually associated with diesel cars.21 km/l in Swift & DZire
19
Maruti Suzuki R&D evolution
Phase 1 – Localisation
Phase 2 – Facelift capability
Phase 3 – Collaborative design
Phase 4 – Full Body Design
20
Financial Performance1,
050
1,46
0 5,42
0
8,54
0 11,8
91
15,6
20 17,3
08
72,535
90,812109,108
120,034
145,922
178,603
70,677
0
2000
4000
6000
8000
10000
12000
14000
16000
18000
20000
2001 -02
2002 -03
2003 -04
2004 -05
2005 -06
2006 -07
2007 -08
Rs
Mill
ions
-
20,000
40,000
60,000
80,000
100,000
120,000
140,000
160,000
180,000
200,000
Rs
Mill
ions
PAT Net Sales
21
8.2%
10.1%
15.2%16.6% 17.1% 17.7% 17.5%
1.5% 2.1%
6.0%
7.8%
9.9%10.7%
9.7%
2001-02 2002-03 2003-04 2004-05 2005-06 2006-07 2007-08
Financial Performance
EBITDA
PAT
22
Challenges faced this year
How are things changing
What can we say about the next year
The year so far…
23
Industry Growth-Passenger Cars
Quarterly Industry Growth08-09
11.6%
-1.2%
-12.7%-15.0%
-10.0%
-5.0%
0.0%
5.0%
10.0%
15.0%
Quarter1 Quarter 2 Quarter 3Quarter
grow
th
-24.3%
24
Challenges faced this year
25
InflationRising Inflation
0.00
2.00
4.00
6.00
8.00
10.00
12.00
14.00
Aug-07
Sep-07
Oct-07
Nov-07
Dec-07
Jan-08
Feb-08
Mar-08
Apr-08
May-08
Jun-08
Jul-08
Aug-08
Period
Rat
e
26
Interest RateInterest Rate & CRR
4.00%
6.00%
8.00%
10.00%
12.00%
14.00%
16.00%
FY 06-07
H1
FY 06-07
H2
FY 07-08
H1
FY 07-08
H2
FY 08-09
Q1
Jul'08
Aug'08
Sept'0
8
Period
Rat
e Cust Interest Rate
CRR
27
Equity Markets
Swinging Sensex
2,0004,0006,0008,000
10,00012,00014,00016,00018,00020,000
Apr-08 May-08 Jun-08 Jul-08 Aug-08 Sep-08 Oct-08 Nov-08 Dec-08 Jan-09Period
Inde
x
28
Crude
Crude at its Peak
5060708090
100110120130140
July-07
August-07
Sept-07
Oct-07 Nov-07
Dec-07
Jan-08 Feb-08
March-08
April-08
May-08
June-08
July-08
August-08
Period
Pric
e/B
arel
l
Oil Price/barell
29
Cascading effect
News from the west-Lehman Brothers-Bear Stearns-AIGSub prime crisis snowballs.Job cuts in USMelt down became talk of the
town
30
Consumer Sentiment
Depressed market sentiment
“ not the best time to buy”
“ lets wait & watch”
31
Finance Availability
Banking system confidence
Money Supply
32
Finance Penetration
10%20%
30%40%
50%60%70%
Apr-08 May-08
Jun-08 Jul-08 Aug-08 Sep-08 Oct-08 Nov-08 Dec-08 Jan-09
PSU BanksPvt BanksTotal
33
…The final blow
Quarter 3
November- Industry Shrinks -21.2%November -26/11- Mumbai Terror attack
It seems everything that could go wrong went wrong this year
34
Proactive GovernmentIndustry responds through discounts and price cutsInflation recedesGovernment opens money supplyOn Govt. push, PSU banks start lending freely ( Pvt banks still averse)Interest rates soften 200-300 bpsConsumer sentiment improves ( starting with bargain hunters in Dec.)
The positives ….
35
Calibrated view of Indian Economy
-2
0
2
4
6
8
10
12
USA Euro Zone France Germany Italy Spain UK Japan China India
2006 2007 2008 2009
India is set to grow by about 7%
next year estimates 5.5 -6 %
36
Financial Highlights 9M- Apr-DecParameters 9M FY09 9M FY08 Change
Net Sales (Rs Mn) 140,499 130, 974 7.3 %
EBITDA (Rs Mn) 18,787 23,682 -20.7 %Depreciation (Rs Mn) *5094 2507Profit Before Tax (Rs Mn) 13,272 20,677 -35.8 %
Profit After Tax (Rs Mn) 9755 14331 -31.9 %
* Pursuant to revision in useful life of assets in Q4’ Fy08
37
Financial Highlights 9M (08-09)
Parameter 9M’Fy09 9M’ Fy08 ChangeMaterial Cost 79.4% 76.4% 3.1%Employee Cost 2.4% 2.% 0.4%Selling & Distribution expenses 3.8% 2.8% 1 %Manufacturing Expenses
RoyaltyPower & Fuel
2.7%3.3%1.1%
2.2%2.6%0.8%
0.05%0.7%
0.30%
EBITDA 13.4% 18.1% (4.8)%Depreciation 3.6%* 2 % (1.6)%PBT 9.4% 15.8% (6.3)%PAT 6.9% 10.9% (4)%
As % of Net Sales
* Pursuant to revision in useful life of assets in Q4’ Fy08
38
Cost drivers
CommoditiesForexSales discounts
39
Commodities46 48 52 54 56 59 56
51
34 37 38 39 41 42 43 43 41 3944
4745 46
0
1020
30
40
5060
70
Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan
Rs.
/Kg
Steel CRC EDD Steel CR-IH
133 129 132 141 147 144 128 130 115 109 99
346386 393 393 401
366 356
274212
177 186
0
100
200
300
400
500
Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan
Rs.
/Kg
Aluminium Copper
12217
6440
3761
2218 1961 1785
12045
11829
1336813100
8695
0
2000
4000
6000
8000
10000
12000
14000
16000
Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan
Rs./G
m
Rhodium
40
Forex Exposure
Direct : Import of components, Steel , Royalty payments ~ 12 % of Net Sales
Indirect : vendor imports ~ 10 % of Net Sales
41
Way forward for Maruti Suzuki
42
Industry Outlook
No guidance intendedBest perception about domestic market growth in FY10 at 5 %
43
Way forward Maruti SuzukiProductsExportsDomestic market opportunitiesCommodity R&DForexCommitment to Road Safety in India
44
Way forward Maruti Suzuki
ProductsFull year volumes of A-star(powered by next generation light weight
KB engine, mileage 19.6 km/l, ELV compliant and lowest emissions in its category)Suzuki World Strategic Model-Splash(KB engine, Petrol & Diesel variant )Increased availability of diesel engines
45
Way forward Maruti Suzuki
Exports
New product- new markets (A- star)
World class port infrastructure, more efficient logistics
46Our first shipment of A-star to Europe at our new terminal at Mundra
47
Way forward Maruti Suzuki
Domestic market opportunitiesPotential consumer segments
Rural Sector (~8% of our sales)Government Employees (~15% of our sales)
Enhanced Customer Interface - Brand Centers & Stockyards
48
Way forward Maruti Suzuki
On Cost sideCommodities softeningExtensive work on Tier-II vendor upgradation
49
Way forward Maruti SuzukiOn R&D
Investment in R&D capability full stream Over 80 engineers trained in JapanFull body change capability in 2010Transforming models for new enginesSpeed, relevance and excitement in market placeR&D centre at par with JapanComplete Test Course facility
238 269
430
687
1000
2005-06 2006-07 2007-08 2008-09 (Jan) 2010-11e
Design Engineers’ Strength at Maruti Suzuki
50
Way forward Maruti Suzuki
On Forex
Forex almost neutral, but with cross-currencyVendor localization
51
Way Forward - Capital Expenditure
•Vehicle Production Capacity of 1 million achieved•Manesar Plant Capex done•Going forward Capex major areas
oKB Engine Expansion, oGurgaon plant modernizationoR&D oMarketing – Brand Centres & StockYardsoNew Model development
•Total Plan oFY10 Rs 24 billionoFY11 Rs 13 billionoFY12 Rs 4 billion
•Cash Position Rs 32 billion (31st Dec-08)
52
India is World’s No.1 in road accident fatalities78% accidents due to driver faultTrain 500,000 in next 3 years towards ‘Safe Driving’100,000 – sponsored by MSIL from weaker sectionsPartnership with State governments & Dealerships.
Our commitment to Road Safety in India
53
Road Safety Infrastructure
Train 500,000 in next 3 years towards `Safe Driving’
In partnership with State Governments.
Pilot in March 2000Second IDTR in 2006Four more in the pipeline –
Gujarat, Haryana(2), Uttarakhand
Two Institutes of Driving Training and Research (IDTR)
Over 550,000 commercial drivers trained in Delhi & NCR
54
Thank You