ECO 6201 Business Economics – Individual Case Study Assignment

Unit and Assessment Overview

Unit code: ECO 6201
Unit title: Business Economics
Assessment title: Individual Assignment – Maruti Suzuki Electric Vehicles Case Study
Weighting: 40% of total coursework mark
Length: 2,000 words (±10%) excluding references, tables and appendices
Submission: Online via Blackboard (Week 7)
Referencing style: Harvard

Case Study Context

The assignment is based on the case “Should Maruti Suzuki Invest in Electric Cars?” which examines India’s policy push towards electric vehicles, Maruti Suzuki’s dominant position in the passenger car market, Mahindra’s first-mover strategy in electric vehicles, and the evolving global and Indian demand and cost conditions for electric cars. You are expected to use standard microeconomic tools including demand and supply, costs, market structure, elasticity, externalities and government intervention to analyse the strategic options available to Maruti and the implications of India’s electric vehicle policies.

General Assignment Requirements

• Write a 2,000-word individual report that answers all four case questions listed below.

• Present your work as a structured management and economics report with: Table of Contents, Introduction, numbered sections for each question, Conclusion, References or Bibliography, and Appendix if required.

• Use your own words. The assessment is based on the quality of your economic analysis and use of supporting evidence.

• Support arguments with proper and credible references including textbooks, journal articles, reputable reports, and the case itself, cited using Harvard style.

• Assignments with high similarity indices or copied material without proper quotation and referencing will receive zero and may trigger academic misconduct procedures.

• Late submission is normally not accepted and may receive zero unless documented and approved reasons are provided according to institutional rules.

Case Questions (Answer All)

Question 1 – Government Objectives and Maruti’s Reluctance

(a) Explain why the Government of India wants to phase out fossil-fuel cars and replace them with electric cars.

• Discuss macro and microeconomic reasons, including environmental externalities, energy security, oil import dependence, trade balance and long-run growth considerations, using information from the case such as pollution levels, GDP share of the automotive sector, oil imports, the FAME scheme and electric vehicle targets.

(b) Analyse why Maruti Suzuki is reluctant to move immediately and aggressively into the electric car segment.

• Use concepts such as sunk costs, uncertainty, risk, demand conditions, cost structure including battery costs and infrastructure, first-mover disadvantage or advantage, and strategic interaction with competitors like Mahindra.

Question 2 – SWOT and Entry Decision for Maruti

Conduct a SWOT analysis of Maruti Suzuki in relation to the electric car segment and use it to evaluate whether Maruti should enter the electric car market now or wait.

• Identify and justify key internal Strengths and Weaknesses such as cost leadership, scale, brand, research and development capability, and technology gaps.

• Identify and justify key external Opportunities and Threats including policy support, competitor moves, technology trajectories, infrastructure constraints, and consumer incomes and preferences.

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• Based on the SWOT and economic reasoning including expected demand growth, learning curves and network effects, state whether Maruti should enter early, enter later as a fast follower, or delay significantly, and justify your recommendation.

Question 3 – Timing of Entry

Discuss what would be an appropriate time frame for Maruti to enter the electric car market.

• Use demand and supply analysis to link timing to expected changes in key variables such as battery costs, charging infrastructure, consumer awareness, income growth, government incentives and regulatory deadlines.

• Draw and briefly explain one or more demand and supply diagrams showing how shifts in demand or supply over time could make the electric car segment more commercially viable for Maruti.

• Explain how strategic timing can affect profitability through economies of scale, learning, and competitive positioning in relation to Mahindra and multinational entrants.

Question 4 – Government Policy: Demand-Side and Supply-Side Measures

Explain what the Indian government should do to promote the electric car market, using both demand-side and supply-side measures.

• Demand-side: consumer subsidies, tax incentives, scrappage schemes, information campaigns, urban access rules, and policies to internalise environmental externalities such as carbon pricing and congestion charges.

• Supply-side: research and development support, infrastructure investment including charging networks and grid reliability, production subsidies, local battery manufacturing policies, and clear, stable long-term electric vehicle targets and regulations such as the FAME scheme and National Electric Mobility Plan.

• Use appropriate economic concepts such as market failure, externalities, public goods, and dynamic efficiency to justify each measure.

Structure and Formatting

• Suggested structure (guide only):

  1. Title page including unit code, title, assignment title, student name and ID, and date

  2. Table of Contents

  3. Introduction of approximately 150 to 200 words with brief case overview, purpose of the assignment and outline of sections

  4. Section 1: Government objectives and Maruti’s reluctance

  5. Section 2: SWOT analysis and entry decision

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  6. Section 3: Timing of entry using a demand and supply perspective

  7. Section 4: Government policy including demand-side and supply-side measures

  8. Conclusion of approximately 150 to 200 words integrating findings and providing a clear final recommendation

  9. References using Harvard style

  10. Appendix for optional diagrams or extended tables

• Use clear headings and sub-headings and write in formal, precise academic English.

• Integrate diagrams such as demand and supply, cost curves and market equilibrium shifts into the relevant sections and label them clearly.

Marking Criteria (Indicative)

• Economic analysis and application (40%)

  • Accurate and insightful use of core microeconomic concepts including demand, supply, elasticity, costs, externalities and policy tools applied to the Maruti and electric vehicle context.

  • Quality and correctness of diagrams and their explanations.

• Case understanding and use of evidence (25%)

  • Effective use of quantitative and qualitative information from the case and exhibits.

  • Clear linkage between case facts and your arguments.

• Structure, coherence and argumentation (20%)

  • Logical organisation, clear sectioning, and coherent flow of reasoning.

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  • Clear conclusions and justified recommendations.

• Research and referencing (10%)

  • Use of appropriate academic and reputable sources in addition to the case.

  • Consistent and correct Harvard referencing both in-text and in the reference list.

• Presentation and academic integrity (5%)

  • Professional formatting, spelling and grammar.

  • Evidence of original work within acceptable similarity limits.

Additional Academic Guidance

The transition from conventional vehicles to electric vehicles represents a complex structural change that requires coordinated action between firms, consumers and governments. From an economic perspective, the adoption of new vehicle technologies is strongly influenced by expectations about future costs, infrastructure availability and regulatory stability. Firms such as Maruti Suzuki must therefore evaluate investment decisions under conditions of technological uncertainty and changing policy frameworks. Economic theory suggests that when network externalities and learning effects are significant, early government support can accelerate market development and reduce long-term costs for producers and consumers. As a result, well-designed policy interventions can help overcome initial barriers to entry and stimulate innovation and competition within emerging electric vehicle markets (Harrison & Thiel 2017).

A strong ECO 6201 report starts with a concise explanation of India’s rationale for phasing out fossil-fuel cars, linking pollution, oil import dependence and trade deficits to negative externalities and macroeconomic vulnerabilities documented in the case. A well-developed section on Maruti’s reluctance then reframes management’s concerns about high battery costs, infrastructure gaps and policy uncertainty as a problem of unfavourable current cost and demand conditions, where expected demand curves for electric vehicles are still shallow and marginal costs remain high relative to conventional vehicles. A robust SWOT analysis highlights Maruti’s scale economies, brand strength and dealer network as key advantages, while technology dependence and limited electric vehicle experience appear as weaknesses that interact with threats from first movers such as Mahindra and global firms. In discussing timing, effective answers use demand and supply diagrams to show how falling battery costs and government subsidies can shift the electric vehicle supply curve rightwards over time, creating a future window where entry is more profitable. The policy section gains marks when it clearly distinguishes demand-side tools like consumer subsidies and awareness campaigns from supply-side measures such as research and development support, charging infrastructure and stable long-term targets, all justified as responses to market failures and coordination problems. Finally, high-scoring students integrate these strands into a clear recommendation on whether Maruti should pursue an early-mover, fast-follower or delayed entry strategy under different policy and market scenarios.

 References

• Borenstein, S & Davis, LW 2016, ‘The distributional effects of US clean energy tax credits’, Tax Policy and the Economy, vol. 30, no. 1, pp. 191–234, doi:10.1086/685597.

• Greene, DL, Park, S & Liu, C 2020, ‘Analyzing the transition to electric drive vehicles in the US’, Energy Policy, vol. 144, 111679, doi:10.1016/j.enpol.2020.111679.

• Sierzchula, W, Bakker, S, Maat, K & van Wee, B 2014, ‘The influence of financial incentives and other socio-economic factors on electric vehicle adoption’, Energy Policy, vol. 68, pp. 183–194, doi:10.1016/j.enpol.2014.01.043.

• IEA 2020, Global EV Outlook 2020: Entering the decade of electric drive?, International Energy Agency, Paris, https://www.iea.org/reports/global-ev-outlook-2020.

• Tietge, U, Mock, P, Lutsey, N & Campestrini, A 2016, ‘Comparison of leading electric vehicle policy and development in Europe’, International Council on Clean Transportation, https://www.theicct.org/publication/comparison-of-leading-electric-vehicle-policy-and-development-in-europe/.

• Harrison, G & Thiel, C 2017, ‘An exploratory policy analysis of electric vehicle sales competition and sensitivity to infrastructure in Europe’, Technological Forecasting and Social Change, vol. 114, pp. 165–178.