As India supposes to be one of the largest countries in the World, they were more equipped with bare lands. Resulting in major industrial giants like Suzuki to invest in as a joint venture with Maruti.
Not only is the largest Country but also having a large population India made fast-growing buying platform for Maruti Suzuki Company in terms of raising up the percentage of consumers.
To learn Suzuki Motors method of production, quality assurance and other Japanese management methods frequently Indian Employees do visit Japan.
Low labor cost is one of the key characteristics of the Indian automobile market Infrastructure.
During the entry of Suzuki Motors’s to India, the automobile industry had a poor infrastructure. Suzuki Motors identified this point and supported to strengthen out the same to compete with.
Passenger Cars Industry in India was left to Hindustan Motors and Premier Automobile. These Companies produced cars that were large, expensive with poor mileage. Resulting many people could not buy cars for personal transport. Demand starts to rise up for small passenger cars as Maruti Suzuki productions were successfully manufactured to cater all these requirements. During 1960-1980 the demand was at lower than 50,000 cars per year. The two local manufacturers met this demand with Hindustan Motors (Ambassador) manufacturing 30,000 cars and Premier Automobile (Fiat) manufacturing the balance of 20,000. Suzuki Motors predicted Indian market potential to rise to 200,000 cars per annum by the year 2000. In 1983, Maruti Udyog Ltd (MUL) set a target to manufacture 100,000 passenger cars (800 cc) per year. At this time, Suzuki Motors domestic production of passenger cars of 800cc or greater than 800cc cars in Japan was lesser than the production target set by MUL in India.
Indian government requested Suzuki Motors to utilize the local parts in their products. This opened another avenue to Suzuki Motors to support the Local Vendors whilst in return, they receive the components up to their expected quality and standard. This created an international level opportunity to Indian Vendors and at the same time other Markets too interested to invest in.
The extent of Suzuki Motors’s investment in the Indian automobile component industry is shown in the Table below
Table 1: Suzuki Motors’ investment in the value chain of Indian automobile Industry
It is more than important how a firm is created, governed and managed domestically. Maruti – Suzuki is best known in Indian industry for the successful transfer of Japanese style management practices. Suzuki Motors perceived that the hierarchy system in the Indian society greatly influenced the work culture in most Indian factories and it also faced similar problems in setting up a flat organization structure that would most benefit from the introduction of its own management system that is practiced in Japan. The top management from the Indian side also supported the introduction of Japanese