Maruti Udyog Ltd (MUL) enjoys monopoly in spare parts. Along with dealers, MUL is exploiting Maruti vehicle users. Often the vehicle user has to change the clutch plate twice in six months and has to pay Rs.3,567/-. MUL chargers the price of clutch at imported cost while clutch plate is actually made by clutch auto private Ltd at Faridabad. The replacement of a silencer costs Rs.800/-. The cost of spare parts and repairs by any reckoning is three to four times compared to Ambassador or Fiat. A random sample indicates that every eighth car has faulty clutch. In the context of defective parts and exorbitant cost of repairs, saving in fuel in Maruti as compared to other auto makers is of little consequence. Maruti vehicle users in dilemma they cannot get spare parts or get their cars repaired except through Maruti Udyog or its authorized dealers. But both charge huge amounts, not giving guarantee for a single day. MUL is thus, indifferent to the genuine grievances of its customers. Questions: (a) Define a monopoly and stage its main features. (b) Why MUL is called a monopoly? Does it enjoy monopoly in car manufacture? (c) In what way do customers surfer from monopoly practices of MUL. (d) What do you suggest to remedy the situation
Case study:
Maruti Udyog Ltd (MUL) enjoys
Often the vehicle user has to change the clutch plate twice in six months and has to pay Rs.3,567/-. MUL chargers the
The replacement of a silencer costs Rs.800/-. The cost of spare parts and repairs by any reckoning is three to four times compared to Ambassador or Fiat.
A random sample indicates that every eighth car has faulty clutch. In the context of defective parts and exorbitant cost of repairs, saving in fuel in Maruti as compared to other auto makers is of little consequence.
Maruti vehicle users in dilemma they cannot get spare parts or get their cars repaired except through Maruti Udyog or its authorized dealers. But both charge huge amounts, not giving guarantee for a single day. MUL is thus, indifferent to the genuine grievances of its customers.
Questions:
(a) Define a monopoly and stage its main features.
(b) Why MUL is called a monopoly? Does it enjoy monopoly in car manufacture?
(c) In what way do customers surfer from monopoly practices of MUL.
(d) What do you suggest to remedy the situation?
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