Maruti sees internal risks greater than external in future

Increased competition from rivals notwithstanding, the country's largest carmaker Maruti Suzuki India (MSI) sees internal risks as a bigger challenge than the external ones, as it looks to strengthen its leadership position.

"The company has to watch out for signs of complacence, self satisfaction and sluggishness," the company said in its annual report for 2009-10.

MSI said it has a well-defined roadmap for building up strengths like products, total cost of ownership, sales and service network and systems and processes for customer delight.
    
"They all augur well for the future, but risks to the organisations at such level are more internal than external," it said.
    
Being the leader, it said the company does not have the "luxury of a visible and defined benchmark or competitor, as it would be available to the other players."
    
The only benchmark has to be sharper understanding and anticipation of the stated and unstated need of the customer, MSI said.
    
"The company therefore has to keep attacking itself, keep challenging its own levels of past achievement, keep setting high benchmarks for improvement...," it added.
    
MSI's call for self improvement comes at a time when it is facing tough competition from rivals like Hyundai Motor India, Tata Motors, General Motors India and Ford India.
    
For the first time in its history, MSI saw its market share in the Indian car market declining below 50 per cent this fiscal.
    
According to SIAM, the market leader sold 2,82,488 cars during the April-July period this fiscal, representing a 47.68 per cent share in the overall 5,92,405 units market.
    
In the comparable year-ago period, MSI had a 53.13 per cent share in the 4,40,069 units car market, with sales of 2,33,811 units.
    
As it gears up to defend its market share, MSI is planning to set up a third production unit at its Manesar facility that could entail an investment of Rs 1,700 crore.
    
The new unit is expected to add an annual capacity of 2.5 lakh units, similar to the ongoing second unit at Manesar that is also being set up at an investment of Rs 1,700 crore.
    
At present, the company's Manesar plant has an annual production capacity of 300,000 units, while the Gurgaon plant produces 700,000 units per annum.