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| | | | | | | | | | | | Corporate Social Responsibility | | | Maruti Suzuki has adopted a CSR policy, which serves as a guiding tool for the management and the employees in steering Maruti Suzuki towards long term sustained growth in harmony along with the interests of the stakeholder.
The role of the CSR department is to professionalize CSR activities in Maruti Suzuki and strengthen the mechanisms involving the activities. Significant efforts have been taken to contribute to society at large, through its corporate activities, especially in the areas of Road Safety and Vocational Training. Maruti Suzuki has set up dedicated teams with requisite expertise to steer the social projects. | | | | View our CSR Policy | | | | | | | | CSR Concepts | | | Maruti Suzuki has adopted a CSR policy, which serves as a guiding tool for the management and the employees in steering Maruti Suzuki towards long term sustained growth in harmony along with the interests of the stakeholder.
The role of the CSR department is to professionalize CSR activities in Maruti Suzuki and strengthen the mechanisms involving the activities. Significant efforts have been taken to contribute to society at large, through its corporate activities, especially in the areas of Road Safety and Vocational Training. Maruti Suzuki has set up dedicated teams with requisite expertise to steer the social projects. | | | | | | | | |  | Chairman's Statement | | Managing Director's Statement | | | | | | | | I am delighted to present the Sustainability Report for 2010-11 to all our stakeholders.
Maruti Suzuki India Limited has come a long way since it rolled out its fi rst car and went on to become a market leader. It followed a collaborative business approach and achieved new benchmarks in quality, productivity, customer satisfaction and people practices. The Company treated its dealers and suppliers as partners, supporting them with technical knowhow and initial hand holding. In turn, the business partners stood by the Company in challenging situations and grew with the Company. Employees demonstrated exceptional commitment in helping the Company reach where it is today. Stakeholder engagement and involvement remain an integral part of the Company's business philosophy.
The Company showed remarkable fl exibility and adaptability during its journey of over two decades. It met changing customer requirements by offering relevant products from time to time and expanded its sales and service network across the country. Along the way, the Company forayed into the used car, fi nance and insurance businesses to provide value added services to customers under one roof. This customer-centric approach placed Maruti Suzuki ahead of the competition in customer satisfaction.
The parent company, SMC, nurtured Maruti Suzuki to become a strong corporate entity. Maruti Suzuki achieved a major landmark by producing its ten millionth car in 2010-11. It has built capability to produce and sell over 1.25 million cars a year. This is a matter of pride not only for Maruti Suzuki, but for the entire Indian automobile industry. The R&D centre and test course being set up at Rohtak, will take Maruti Suzuki to the next level of excellence.
The challenges Maruti Suzuki is facing today are quite different from what it faced in its formative years. The healthy GDP growth has made the Indian automobile market too attractive for any major global car maker to miss. The success of Maruti Suzuki has prompted carmakers in India to shift their focus to its stronghold, the compact car segment. Competition has intensifi ed with the recent launch of competitively priced fuel effi cient compact cars.
The customer is more aware these days and has more options to choose from. Customers are preferring cars with low running cost. Therefore, the fuel mix is changing rapidly in favour of diesel and alternate fuel cars. The government is bringing in stringent emission and safety norms. High investments are required in advanced technologies to meet customer requirements and government regulations.
India is no more isolated from the world. Economic recession, natural calamities and social unrest in any part of the world impact business in India. Crude oil prices, commodity prices and foreign exchange movements have a strong bearing on business profi tability. At the local level, the automobile industry is grappling with IR issues and the cyclic nature of macroeconomic factors.
Maruti Suzuki is preparing itself and its business partners to meet these challenges. Given the relevant product line up, lowest cost of ownership, and its vast sales and service network, Maruti Suzuki is in a better position to compete and sustain its leadership position. However, high focus is required to further improve quality levels, reduce wastage and maintain cost competitiveness.
Environmental considerations are infl uencing government policies and product plans of automobile manufacturers. The government has asked SIAM to study the potential for electric and hybrid vehicles in India. We believe that the shortage of electricity and the lack of infrastructure for charging cars will be a major handicap to the spread of electric vehicles. Hybrid car technology for small cars, at reasonable cost, has yet to be developed. In the present situation, CNG seems to be the most appropriate alternative fuel for India. CNG reduces vehicle running cost and fuel emissions. It would make more economic sense to use CNG for running automobiles than to burn it for generating electricity, and use electric cars.
Government support is required to make CNG available across the country. Adequate CNG needs to be allocated for automotive use. The fi ve models with CNG option launched by Maruti Suzuki have been received well by customers in areas where the fuel is available. We plan to launch more vehicles with the CNG option.
The increasing number of road accident fatalities has become a major social issue that requires the attention of the government, civil society and corporates. Poor driving habits are a major cause of accidents. Maruti Suzuki is trying to solve this problem by expanding its driving training infrastructure across the country.
With rapid economic growth and investment in new capacities, skill development is critical for the country and the manufacturing sector. While this requires a concerted effort at the national level, Maruti Suzuki is doing its bit in this area as part of its CSR programme. The Company's ITI upgradation initiative, thus far confi ned to institutes in Haryana, was extended to other parts of the country during 2010-11.
Maruti Suzuki will continue to engage with its stakeholders and following an inclusive approach, make concerted efforts to create shared value. I take this opportunity to thank all stakeholders for their continued support and contribution to the glorious journey of Maruti Suzuki.
I look forward to your valuable feedback.
R C Bhargava
Chairman
| | | | | | | I am delighted to present Maruti Suzuki¿s Sustainability Report for 2010-11.
SUSTAINABILITY APPROACH
There is a growing awareness among government, civil society and corporates that effective measures are needed to protect the environment for future generations and to uplift the underprivileged sections of society for equitable and sustained economic growth. This requires a collaborative approach where all stakeholders come forward and contribute.
At Maruti Suzuki, our endeavour is to make sustainability a way of life where all business decisions are taken in consideration of their impact on the environment and society, in addition to the return on investment. We believe in sharing our best practices and learnings with business partners so as to create a multiplier effect. Together with our business partners, we intend to bring more focus on issues impacting the environment and society.
BUSINESS PERFORMANCE IN 2010-11
In 2010-11, the Indian economy grew at a healthy rate of 8.5% and the domestic car market remained buoyant, posting a growth of 29%. The demand for cars during the year beat all initial industry projections and our own annual growth plans. We had to gear up our own facilities and that of our suppliers to meet the market demand.
In 2010-11, the Company achieved the landmark of producing its ten millionth car since commencing production in December, 1983. With the sale of 11,132,739 units in the domestic market, the Company was successful in marginally improving its market share. However, export sales saw a decline of 6.3%. The drop in export markets was largely due to dull European markets after withdrawal of scrappage schemes by governments in the region.
While the Company posted strong volume and revenue growth, rising commodity prices, new model launches, higher cost of technology and adverse foreign exchange movement impacted profi tability. The Company achieved net sales of Rs. 361,282 million, a growth of 24.8 % whereas EBIDTA declined by 6.8 % and PAT by 8.4 %.
The Company continued its focus on new model launches, cost reduction, productivity improvement, quality, network expansion, customer satisfaction and building R&D capability. In 2010-11, the Company launched refreshed variants of WagonR and Alto with the new K-series engine. SX4 was launched with a state-of-the-art super turbo diesel engine. The Company entered the luxury segment for the fi rst time with the launch of Kizashi, India¿s fi rst sports luxury sedan.
Customers continued to rate the Company as no.1 in sales and service satisfaction in the JD Power Surveys.
ENVIRONMENTAL SUSTAINABILITY
In 2010-11, Maruti Suzuki registered its fi rst CDM project with the United Nations Framework Convention on Climate Change (UNFCCC).
The Company renewed its commitment to environment protection with the launch of factory-fi tted CNG variants of fi ve models with i-GPI technology: Alto, WagonR, Eeco, Estilo and SX4. The i-GPI technology used in these vehicles is better than the conventional CNG technology as it delivers higher fuel effi ciency, and the loss of power is negligible. The Company also launched the LPG version of WagonR.
The Company experimented with hybrid and electrical vehicle technologies, and successfully built hybrid SX4 and electric Eeco cars. The hybrid SX4 cars were used during the Commonwealth Games held in Delhi during the year.
In a signifi cant development, from 2010-11 the Company started sending its hazardous waste to the cement industry for co-processing, thus practically eliminating the need for dumping waste in landfi lls. The focus on increased use of solar energy for street lighting and LED lights in the plants gained momentum in 2010-11.
The reduction in per vehicle CO2, electricity and water consumption in the Gurgaon plant has been 15%, 16% and 5% respectively and in the Manesar plant 13%, 1% and 16% respectively in 2010-11.
The Company will continue to review its operations and products from the environment perspective and look for opportunities to further improve its performance.
SOCIAL SUSTAINABILITY
Maruti Suzuki¿s CSR activities saw an expansion in 2010-11. The Company trained 187,000 people in safe driving in 2010-11, taking the total to over 850,000 people trained in safe driving since 2000.
In the skill development area, the Company forged four new partnerships with ITIs in 2010-11, taking the total number to seven. As affi rmative action, Maruti Suzuki chose to work with an ITI at Elathur, Kerala, that specifi cally caters to the SC/ST community.
The Company continued its community development initiatives around its Manesar plant. Our employees are also contributing to social activities through an employee volunteering programme.
The Company paid special attention to manpower training during the year. This was especially important as a large number of fresh and experienced personnel were recruited for expanding operations.
Occupational health and safety was one of the areas identifi ed during the reporting process which needed strengthening across the Company. In 2010-11, the Company decided to implement the OHSAS 18001 standard. The standard will be implemented in 2011-12.
Besides strengthening its own operations, the Company also extended support to its suppliers through Project Shikhar to improve their people and production processes.
Showing solidarity with the Japanese people and supporting them in their hour of crisis, the Company¿s employees, dealers and vendors jointly contributed Rs. 107 million to provide relief to tsunami and earthquake affected areas in Japan.
GIVE GET GROW
This Sustainability Report is a means of identifying areas of improvement, sharing good practices for mutual learning and moving forward step-by-step on the journey towards sustainability.
Through this report, we have tried to capture and share our sustainability performance with our valued stakeholders. I will be delighted to receive your valuable feedback or suggestions for improvement.
S. Nakanishi
Managing Director and CEO | | | | | | |  | | | | Corporate Governance | | | Maruti Suzuki believes that good corporate governance ensures fair and transparent business environment. Therefore, Maruti Suzuki follows the basics of good Corporate Governance and has been successful in establishing trust between stakeholders, management and the board of directors.
Corporate Governance Philosophy
Maruti Suzuki is fully committed to practicing sound corporate governance and upholding the highest business standards in conducting business. Being a value-driven organisation, Maruti Suzuki has always worked towards building trust with shareholders, employees, customers, suppliers and other stakeholders, based on the principle of good corporate governance, viz, integrity, equity, transparency, fairness, disclosure, accountability and commitment to values.
Maruti Suzuki fosters a culture in which high standards of ethical behaviour, individual accountability and transparent disclosures are ingrained in all its business dealings and shared by its board of directors, management and employees. Maruti Suzuki has established systems and procedures to ensure that its board of directors is well informed and well equipped to fulfill its overall responsibilities and to provide the management with the strategic direction needed to create long-term shareholder value. | | | |  | | | | Compliance | | | | To sustain being the preferred supplier of our cars to our customers, Maruti Suzuki abides by the statutory rules that need to be complied with. We make sure that all necessary regulatory and mandatory requirements for road worthiness as certified by ARAI are in place in each of the cars that we roll out. Our processes and systems too strictly adhere to and abide by to the above rules. | | | | | | |
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