SUBMITTED TO: ANDAL AMISETTY SUBMITTED BY: Sandeep Kumar Gupta Shafali Rana Sachin Taneja Shveta kakkar Saumya Ritwick Rohan

RESTRUCTURING AT SIEMENS LTD.

Introduction Siemens Engineering and Manufacturing Company of India Limited was incorporated in the year 1956, as a subsidiary of Siemens AG., Germany. Started manufacturing switchboard products power generation, power distribution, and medical engineering products. In 1990 Siemens India Ltd. six products divisions and formed into strategic business unit.

Need For Restructuring Mounting pressure on margins which resulted in losses for the first time in the year Increased competition resulting in mergers and acquisitions of the competitors. Breakthrough technological and other changes

Strategies Adopted

Manpower Downsizing (People)

Financial Restructuring (Finance)

Technology And Information

Outcome Of Restructuring All-round satisfaction of stakeholders. Financial improvement High morale of employees Increased market value Operational efficiency Improved productivity

Future The company’s ongoing restructuring programs comprising consolidation of operating segments, divestment of non-core business activities and cost cutting initiatives will lead to margin improvement. Industry, energy, healthcare and real estate. Further improvement in revenue Cost rationalization is evident in employee costs (staff costs as a percentage of sales to 5.8% from 6.3% a year ago ) Siemens is also focusing on developing the Indian operations as a global sourcing hub for value products.

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INTRODUCTION Maruti Suzuki India Limited (MSIL, formerly known as Maruti Udyog Limited) is a subsidiary of Suzuki Motor Corporation, Japan. Two manufacturing facilities located at Gurgaon and Manesar, Haryana. Maruti Suzuki has employee strength over 7,600 (as at end March 2010). Company sold a record 10,18,365 vehicles including 1,47,575 units of exports. Maruti Suzuki had a market share of 53.3 per cent of the Indian passenger car market. 12

INDUSTRY ANALYSIS Indian automobile industry has four major segments-- commercial vehicles (CVs), passenger vehicles, three wheelers, and two wheelers. Indian passenger vehicle market has three categories -- passenger cars, multi- purpose vehicles (MPVs), and utility vehicles (UVs) Present Size of auto and ancillary industry is USD 50 billion Vehicles sold in India are 14 million of which the export are 1.8 million. GDP share of auto sector is 7%, which has grown over previous years. The number of people employed by industry are 13 million. 13

NEED FOR RESTRUCRURING Intense competition: Entry of foreign players like Hyundai, Fiat, Mitsubishi, and Toyota. Even Indian auto players like Tata Motors and Mahindra and Mahindra entered the fray to give MUL tough challenges. Decline in sales of its bread-and-butter model - the Maruti 800 The future of MUL's low-cost model –the Maruti 800 (M-800) - was at stake due to the entry of global automakers into India. This demanded that MUL should introduce new models, and upgrade its existing models in response to market demand. Impact of macroeconomic variables like government regulations and environmental guidelines Maruti Suzuki, enjoyed a monopoly before liberalization. But as the macro factors changed, the company had to change. 14

NEED FOR RESTRUCTURING Government of India - Suzuki tussle There was a major difference of opinion between the GoI and SMC regarding the appointment of the Managing Director (MD) for MUL. SMC did not support the appointment of R. S. S. L. N. Bhaskarudu, holding that he was incompetent to hold the post. Decline in market share There was a gradual decline in the market share of MUL over the years from 1999 to Maruti (MUL) share of the Indian passenger vehicle market dropped to below 50% in This happened even though MUL had slashed prices of certain models on a couple of occasions 15

OTHER PROBLEMS Delay in setting up of a plant in India for manufacturing diesel engines and transmission systems for cars. The engines for its diesel variants were imported from other countries, and there were limits on the quantities it could import. Baleno failed to live up to MUL's expectations. Its utility vehicle 'Versa' met with a disastrous response from the Indian consumer. Growth in the used-car market. Excessive dependence on a single model (M-800) Rising incomes, and availability of easier finance options, led customers to shift their allegiance. 16

RESTRUCTURING Diversification Focus on Product development Vendor management Manufacturing Brand Building Increased its network service centres INTERNAL RESTRUCTURING Revamped its total production style and introduced the JIT concept the first of its kind in the industry. 17

POST RESTRUCTURING Launch of new variants and models Increasing dealer profitability Promotional offers Concentration on Exports 18

BENEFITS In the J.D. Power Asia Pacific India APEAL study, WagonR and Zen were ranked first and third in the premium compact segment. Esteem was picked as the best entry level car in the mid-size category. MUL also topped the J.D. Power Asia Pacific India Sales Satisfaction Index in terms of customer satisfaction with the new vehicle sales process. As per the J.D. Power Asia Pacific India Customer Satisfaction study, MUL ranked highest in customer satisfaction with after-sales service for the sixth consecutive year. 19

FUTURE CHALLENGES Indian Auto Industry is witnessing more JVs and acquisitions than ever. This always posses a threat for MSIL in respect of coming up of a strong competitor. Analysts opine that the company needs to build on manufacturing bases outside India to win in Exports. 20