Maruti wants to be swift; overhaul, de-layering on

New Delhi, Aug 4 | Updated: Aug 5 2005, 05:30am hrs
In a major organisational restructuring, Indias largest car maker Maruti Udyog Ltd is delayering its nationwide sales and marketing infrastructure to hasten decision-making and improve it agility in the marketplace. According to senior management sources, MUL is carving out the domestic market into four zones (north south, east and west) headed by zonal managers who will run their zones as strategic business units (SBUs) or independent profit centres.

All zonal managers will report directly to director, marketing & sales Kinji Saito. Under the present set-up, there are nine regional offices and five area offices, all of whom report to the general manager (sales). The new structure reduces the powers of GMs considerably.

There is an attempt to decentralise powers in the new structure which will involve setting up of four independent marketing set-ups and stockyards under each zonal manager.

With regional stockyards, that are expected to come up within a year, the company hopes to increase its penetration in regions. Once the stockyards are set-up, zonal managers will purchase vehicles from the factory and take critical allocation decisions.

Presently, there is only one stockyard at factory premises and the distribution function is handled at headquarters. This is the first time that a car maker has opted for multiple stockyards in the country. The whole restructuring exercise comes at a time when MUL is fighting fierce competition to defend its 50% plus share in the passenger car market as competitors have started eating into its bread and butter segments. Apparently, this move was initiated by parent Suzuki Motor Company, which has a similar structure in Japan.