Maruti Suzuki India

A land mark was achieved in 2008-09. Your company completed 25 years of
 the start of sale of its first car in India. It was on 14th December
 1983 that the then Prime Minister, the late Smt. Indira Gandhi,
 released the first Maruti 800 car. Maruti Udyog Limited has had a very
 eventful and successful journey since then. From a company which was
 started to produce 100,000 cars a year, we have reached a production
 rate of a million cars a year. Thanks to the support and confidence
 shown by our customers, we have a market share in excess of 55% in cars
 and vans.  cars are exported to over 100 countries and the volume of
 exports is likely to cross 100,000 units in 2009-10. Export of small
 cars will be one of the major elements of our future growth strategy.
 
 The world wide recession which started in 2008 has taught us many
 lessons and also confirmed the validity of our strategies.  As a
 consequence, we have weathered the recession much better than those who
 are highly leveraged. We are practically debt free and have a healthy
 cash balance. We have financed all growth from internal resources. Our
 continuous efforts at cost cutting and improving productivity, even in
 good times, have helped us in making reasonable profits despite the
 impact of higher commodity prices and a weaker rupee. Even in 2008-09
 we had a small growth in sale volumes. We do not have idle capacity and
 have not had to lay off our employees.
 
 The financial crisis has shown the danger of having incentive schemes
 which distort values and prudent decision making, and give scope for
 the greed factor to dominate top management actions. Fortunately, we
 have followed policies which have been based on a good value system. We
 expect that by the time this recession ends, MSIL will emerge as an
 even stronger company.
 
 Maruti was listed in 2003, and has been a consistent and strong
 performer on the stock exchange, giving handsome returns to investors.
 The company is now a totally private company, with government having
 exited. The company is now Maruti Suzuki India Limited.
 
 Thus there is much to be satisfied about. However, Maruti has never
 been a company which has rested on its laurels. We have learned that
 continuous improvements have to be made. A company needs to keep its
 eyes on the future and what it should be doing to bring greater delight
 to its customers and higher rewards to those who have invested in the
 equity of the company. The automobile industry in India is just coming
 of age and the potential for growth is huge. We have to find, and
 implement, ways by which we can be major participants in realising this
 potential.
 
 To do this, we have to rapidly develop our ability to design and
 manufacture small cars. Suzuki Japan is giving full support in this
 effort. We are in the process of acquiring land for building a modern
 research facility, complete with a test track of international
 standards. The engineering manpower is being rapidly increased. At the
 same time, we are persuading our suppliers to establish their own
 engineering capabilities to design and test products, as otherwise our
 own efforts cannot be fully successful. To the extent necessary, we
 will support our vendors in this task.
 
 The continuous upgrading of component quality is, in fact, a necessary
 condition for MSIL to become a large supplier of small cars to the
 world markets. We have been working with our vendors in this area since
 the last 25 years. We are now extending our scope of activity to ensure
 that tier 2 vendors also adopt modern systems which will increase
 productivity and reduce costs. The small and mini scale industry would
 stand to benefit enormously from this effort.
 
 What we have achieved till now is because we have an outstanding set of
 employees in the company. The workers, supervisors, engineers and
 managers all work as a single team for the growth and prosperity of the
 company. They are partners in the growth and prosperity of Maruti
 Suzuki.  Continued success in the future requires that we keep on
 finding ways to making them even more creative. At the same time, we
 recognize that we should continue to help our vendors and dealers, so
 that they can share the experiences of Maruti Suzuki in developing the
 potential of their employees.  Strong dealers and vendors means a
 strong Maruti Suzuki.
 
 The future is exciting, and full of promise. The Indian economy will be
 amongst the two having the highest rates of growth. We expect that this
 government will accelerate the reform process and build good
 infrastructure. As a consequence, companies with strong fundamentals
 will also grow rapidly. We are prepared to take advantage of the
 opportunities which we see coming, and this will benefit our
 shareholders, customers and employees. The next 25 years should be no
 less successful than the period which has elapsed.
 
 R. C. Bhargava
 Chairman