PEST ANALYSIS

PEST is a framework that is used for analysis of macro environmental factors. The Pest analysis for Maruti SX4 is given below.

Political Implications

Government objectives which had direct impact on automobile sector leading to its effects on Maruti SX4 are-

• Exalt the automobile sector as a lever of industrial growth and employment and to achieve a high degree of value addition in the country

• Promote a globally competitive automotive industry and emerge as a global source for auto components

• Establish an international hub for manufacturing small, affordable passenger cars • Ensure a balanced transition to open trade at a minimal risk to the Indian economy and

local industry

• Conduce incessant modernization of the industry and facilitate indigenous design, research and development

• Steer India's software industry into automotive technology. Example: the company developed CMA software for carrying out target costing.

• Development of domestic safety and environmental standards at par with international standards

Policies which affected Maruti Suzuki SX4

• Indian government allows automatic approval for foreign equity investment up to 100% in the car manufacturing sector and does not lay down any minimum investment criteria

• Formulation of an appropriate fuel policy to ensure availability of adequate amount of appropriate fuel to meet emission norms

• Lying emphasis on R&D activities carried out by companies in India by giving a weighted tax deduction of up to 150% for in house research and R&D activities

• Government’s positive interferences in the company’s issues for example, Haryana govt imposes restriction on strike at Maruti Suzuki's Manesar unit referred the matter of the workers' strike to the local labour court under the provisions of the Industrial Disputes Act, 1947 to reduce losses

• Maruti Suzuki has a major plan to expand its offerings of vehicles(SX4) fitted with CNG powered engines but they rely heavily on government action to the problems faced in allocation of the gas across the country

Economic Implications

• The global meltdown has certainly hit the Indian car industry hard. The industry posted a growth rate of 11 per cent in the year 2007 which has fallen to 3 percent in the subsequent year. So Maruti looking for modification in the existing model and presenting it in a new way

• Major global players like Audi, BMW, Hyundai etc have setup their manufacturing units in India which might force Maruti to change its marketing strategy of SX4 although the former mentioned unit may not affect directly to SX4

• The company has stopped its production of the current SX4 model in order to change engine, which would be in compliant with the Bharat Stage-IV norms in order to curb the competition

Social Implications• Since changed lifestyle of people, leads to increased purchase of automobiles, so the shift

of customers from lower end products to middle end product(SX4) is more and hence the SX4 customer base increased

• The average family size is 4, which makes it favorable to buy a four wheeler.• Growth in urbanization, 4th largest economy by ppp index and upward migration of

household income levels all these factors have contributed increase in sales of lower end product and simultaneously lead to movement of customers from lower to middle level

product which include SX4• Easy availability of financing option has increased the purchasing power of customers• Indian customers are highly discerning, educated and well informed. They are price

sensitive and put a lot of emphasis on value for money and brand hence SX4 gaining on these terms

• The preference for fuel efficient cars with low running costs.SX4 diesel gives 21.4 km/ltr average which has attracted many customers towards it

Technological Implications• Maruti Launched CNG kit for SX4,which kept the sales of SX4 up• The company as a proactive move is all set to make its entire fleet of cars adhere to ‘end

of life vehicles’ (ELV) specifications by 2010 by doing away with the usage of hazardous substances during production of cars and their components

• Maruti Suzuki has a expanded its offerings of vehicles(SX4) fitted with CNG powered engines

• The company has stopped its production of the current SX4 model in order to change engine, which would be in compliant with the Bharat Stage-IV norms

• Maruti SX4 launched its hybrid and Eeco charge version .It is a Full Parallel Hybrid with Automated Manual Transmission (AMT) based on a sedan platform. SX4 Hybrid presents a case of evolution of transportation system with elements of flexibility, style and eco-friendliness

References

http://auto.indiamart.com/cars/new-maruti-suzuki-sx4/http://www.consumerdaddy.com/consumer-reviews-for-maruti-sx4-p-44.htmhttp://marketingpractice.blogspot.com/2007/07/maruti-sx4-men-are-back.htmlhttp://news.indiamart.com/story/haryana-govt-imposes-restriction-strike-maruti-suzukis-manesar-unit-141921.htmlhttp://www.expressindia.com/latest-news/Maruti-halts-production-of-SX4/521024/http://www.in.com/news/current-affairs/fullstory-maruti-suzuki-hopes-for-removal-of-bottlenecks-in-cng-supply-20197939-in-1.htmlhttp://blog.cardekho.com/2010/09/maruti-sx4-hybrid-and-eeco-charge-unveiled-today.htmlhttp://www.cardekho.com/carmodels/Maruti/Maruti_SX4http://withfriendship.com/images/c/13471/pest-analysis.gifhttp://www.indiandrives.com/maruti-sx4-zdi-vs-volkswagen-vento-tdi-vs-fiat-linea-multijet.html

.