Maruti Suzuki India Limited SWOT & PESTLE Analysis

Weaknesses

1) Interior facility and features to improve to compete with foreign brands: Maruti Suzuki has to improve its interiors while competing with the foreign brands – Volkswagen, Hyundai, Nissan, Ford etc. The foreign players are little expensive but commands better driving ambience as well as comfortable ride for the passengers.

2) Less market command over premium vehicles and SUV segment: Maruti Suzuki is not an attractive option for the younger generation due to lack of sporty features and aesthetics of the products. Maruti Suzuki has also failed to produce superior premium range of products in the market due to inferior engine specifications as well as less improved suspensions leading to lesser comfortable rides. Maruti Suzuki has also got to improve its product positioning in the SUV market in order to compete with the traditional brands – Mahindra, Tata as well as foreign brands – Mercedes, Audi etc. These drawbacks has also limited Maruti Suzuki’s entrance into advanced markets around the globe.

Opportunities

1) Improving economic scenario in domestic market: India is going to experience a stabilised & healthy GDP growth around 7%. Due to improved infrastructure development in the country, there has been improving road connectivity which has led to improved road traffic thus driving sales of passenger car vehicles. Also, there is improvement in job market that has led to better disposable income for the common people to use cars instead of public traffic. There has been improving car rides either through taxi aggregators or purchases by the consumers. The domestic passenger car market has experienced growth of 7.64% in 2016 compared to 3.9% in 2015.

Political

1. Rise in protectionism measures for business opportunities: There has been rise in protectionist measures across the globe among most of G20 countries. This has led to rise in prices of the products sold in those markets rendering the products less price effective in compared to the locally produced vehicles.

2. Make in India initiative: Maruti Suzuki can enjoy more investment opportunities under the more liberalised initiative of GOI allowing for 100% FDI. It has been coupled with better infrastructure, increased tax holidays and setting up of special economic zones which promise better investment opportunities for the companies.

Social

1. Enhanced customer requirements and perceived social value: Consumers of today are more dependent on personal vehicles for commuting instead of public transport. This has in one hand beefed up the demand for passenger vehicles while on other hand experienced the rapid rise in demand of consumers in the emerging markets in line with that of in the developed markets. Consumers are looking for better comfort calling for better suspension, digitization and automation of most of the functions coupled with assisted driving. Embedded technologies like incorporation of radar, camera coupled to steering and braking activities as well as innovation in power train technologies. Passenger vehicle ownership has been seen a sign of perceived social status. Young population is looking for better ergonomics promising a more youth and dynamic appearance.

2. Rise in car-pooling & shared mobility: Among the middle-income population, for high frequent commuters, car-pooling has been one of the trending habits for many. It has been further beefed by the online cab aggregators – Uber and Ola. It is likely to pull down private ownership of the vehicles and thus the companies should have to venture business sales opportunities in addition to consumer sales.