Maruti Suzuki
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Contents |
History
Briefly
Shweta Punj , In the driver’s seat “India Today” 21/8/2017
It was India first people's car at a time when only two brands ruled the roads, the Ambassador and the Premier Padmini. The top passenger carmaker in India, with a 50.5 per cent market share, it adapted quickly to changing consumer preferences and expanded its portfolio from small cars to all segments in the passenger vehicle market. An early flag-bearer of the Make in India campaign, it exported 1.5 million vehicles to over 100 countries.
The premium hatchback, Baleno, became its first car to be manufactured in India and exported to Japan. It employs 25,000 employees and is building a sustainable profit model by reducing imports and aggressively pursuing localisation.
It all began in a makeshift workshop in Delhi's Gulabi Bagh. The year was 1966 and then prime minister Indira Gandhi's son Sanjay Gandhi had ambitions of building India's first small car. He started a car-building exercise with a few friends, with parts sourced from shops near the Jama Masjid and a motorcycle engine. The government even issued a letter of intent in September 1970, allowing Sanjay to produce up to 50,000 cars a year. But Emergency derailed the project. A year after Sanjay Gandhi's death in June 1980, Indira Gandhi revived Maruti, with Suzuki as the technology provider from Japan. Maruti is the first company that combined sleek design with technology for a superior driving experience. It played a key role in opening up the Indian auto sector to foreign players. For many, Maruti was their first car. The company has launched 36 new or refreshed models and invested Rs 2,000 crore on an R&D centre. It is also skilling the youth by collaborating with the Industrial Training Institutes.
1983: the launch
Pankaj Doval, Sep 26, 2021: The Times of India
From: Pankaj Doval, Sep 26, 2021: The Times of India
From: Pankaj Doval, Sep 26, 2021: The Times of India
In the early-1980s, almost a decade before the economy was liberalised, an ambitious project – linked in the popular imagination with Sanjay Gandhi, son of then Prime Minister Indira Gandhi – started taking shape. Unfortunately, Sanjay died in a plane crash in June 1980, without realising his dream of bringing out an affordable, efficient and indigenous small car that would appeal to the middle class, but not burn a hole in their pockets. He was not there to see his dream fructify with the creation of Maruti Udyog Ltd (now called Maruti Suzuki) – a unique joint venture between Japan’s Suzuki Motor Co. and the Indian government. The new company singlehandedly made India mobile and modernised the local industrial landscape, thanks to the clockwork precision of Japanese management and process systems. Right from the day it opened bookings on April 9, 1983, Maruti had the pulse of Indian buyers in its grasp. The opening orders crossed 1.35 lakh units (big even by today’s standards) by June 8, or just two months.
The vehicle that led to this automotive revolution of sorts was the Maruti 800, still revered for its simplicity, efficiency, ease of use, adaptability, and easy-on-the-pocket price. At launch, the 800 cost Rs 52,500 in Delhi. When deliveries began on December 14, 1983 – a day chosen as it was Sanjay’s birth anniversary – the so-called people’s small car became the darling of rich and poor alike.
PM Indira Gandhi herself handed over the keys to the first 10 allottees (all chosen through a draw of lots to maintain transparency in the licence-raj era). The first car was delivered to Indian Airlines employee Harpal Singh, whose picture while receiving the keys from the PM has become a part of Indian automobile history.
Singh, who had sold off his Fiat car to buy the Maruti 800, got a hero’s welcome wherever he travelled in his new car – DIA 6479 – during the early days. People thronged to see the model that had challenged and single-handedly unsettled the mighty Ambassador and Premier Padmini. He fondly maintained and cherished the car till his last breath in 2010, never succumbing to the lure of newer and glitzier cars.
The 800 never looked back again, as they say for all success stories, and went on to create one record after another as it caught the fancy of Indians who swore by its dependability and the ease of maintenance, which was backed by Maruti’s ever-growing dealer and service network, watched over for quality by the sharp eyes of Suzuki and the Japanese management.
“It was the first car for me, and for so many from my generation, and even later,” Lt Gen (retd) Dr RK Suri, who is in his 80s now, reminisces fondly about the car that took him places but “never gave up”.
RC Bhargava, the octogenarian bureaucrat-turnedbusiness leader, has been associated with the project from the beginning, and surprisingly, still serves as nonexecutive chairman of the company. Bhargava tells TOI Maruti’s birth “was really an accident….It was not as if the government suddenly discovered that they needed to modernise the automobile industry for some reason or the other. The passenger car industry at that time was not at all a favoured industry. Those were the days of socialism. And in a socialistic environment, private transport was way down the list because it was seen as a luxury product meant for the rich.
“The government was always in favour of public transport… Maruti was set up because Sanjay died in an accident and PM Gandhi wanted that this dream of a small car should live beyond his death. That is why the company came into existence.” The government did throw in some ‘special favours’ to get the company going, including getting access to technology and allowing easy customs duty on parts (Hindustan Motors and Premier Automobiles objected to the latter concession).
“It was allowed to have a foreign collaboration, and foreign equity participation of up to 40%. At that time, public-sector companies did not have any foreign equity in them and were 100% government-owned. An exception was made here.”
However, Bhargava candidly admits that nobody even in their wildest dreams thought the company and Maruti 800 would become one of the biggest successes of an industrialised India decades later. “Nobody, and I mean absolutely nobody, either in India or outside India, thought that this (Maruti Udyog) project would be a success. Everybody looked at it as a political project, which would maybe last a few years. Also, they expected it to wind up because it was into car production,” Bhargava says, though quickly adding with a sense of satisfaction and pride: “The Indian customer thought otherwise.”
Such was the craze for the Maruti 800 that even the rich jostled with the common public for early delivery of the car, just for bragging rights. “The public suddenly realised that small cars can also be sexy. The Maruti 800 was light when compared to the bulky Ambassador, yet strong with a more efficient engine. Such was the craze that for some time in the early years, it became a status symbol – almost equivalent to owning a Mercedes,” says auto historian Adil Jal Darukhanawala.
The car – which had external and internal upgrades right till the end of its life – did enjoy a ‘waiting period’, and a real one at that, for years to come. The end, after mammoth sales of 27 lakh-plus units and crores of kilometres run across the length and breadth of India, came in the year 2014 (after almost 31 years) as the stricter BS4 emissions norms kicked in, making the product and even an attempted upgrade unviable.
The relatively-younger Alto had by then replaced the 800 in the league of entrylevel cars. But the legend of Maruti 800, the people’s small car, lives on.
The Sanjay connection
Sep 26, 2021: The Times of India
India had been making its own cars for a few years when the government woke up to the need for a cheaper ‘people’s car’ in the 1950s. In 1959, a committee described such a car as a “desirable necessity”. A year later, another committee seconded it.
The idea remained on paper for a decade until the government invited private companies to apply for a licence to make a small car. There were 18 applicants, including Telco, which is now Tata Motors. None impressed the government as much as Maruti, the fledgling company of then Prime Minister Indira Gandhi’s son Sanjay.
Reports from the early 70s say Sanjay Gandhi had trained with Rolls Royce for three years, and on returning home he had started tinkering in a rented garage near Roshanara Bagh in Old Delhi. However, years later, Rolls Royce said he had only earned an Ordinary National Certificate in mechanical engineering – “a relatively minor qualification”.
Qualified he may not have been, but 20-something Sanjay promptly got 297 acres in Gurgaon at “a little under Rs 12,000 per acre” to start his Maruti factory. The plan was to make a completely indigenous car that cost about Rs 8,000 apiece. In May 1975 – close to its ‘launch’ – the exshowroom price was set at Rs 16,500. On road in Haryana, it would have cost Rs 21,000 – still Rs 5,000-10,000 cheaper than the existing models.
But the day when Sanjay’s Maruti would grace showrooms never came. In May 1975, he claimed he would start production with 12-20 units a month, and take it up to 200 a day in four years. Actual production till March 31, 1976 was just 21 units. That was all they ever made. In June 1975, his mother imposed Emergency and Sanjay jumped into politics, although his role as Maruti MD continued to pay him a then-princely Rs 4,000 monthly salary.
Indira Gandhi lost the 1977 election, and in 1978, a court ordered the winding up of Maruti. This household name would have lapsed then, but in 1980 Indira returned to office. Sanjay died in a plane crash in June, and soon after, Government of India adopted Maruti through the Maruti Limited (Acquisition and Transfer of Undertakings) Act that came into force on October 13, 1980.
Three years passed before the first Maruti 800, made in collaboration with Suzuki of Japan, rolled out. Barring the badge on its rump it had nothing in common with Sanjay’s car. TNN
1999: Maruti nearly bought Hyundai India
Nandini Sengupta, February 7, 2018: The Times of India
Maruti Suzuki and Hyundai Motor India (HMI) are the No. 1and No. 2 passenger vehicle companies in India, and have been arch rivals for more than two decades. But imagine what the Indian car market would have looked like if Maruti took over Hyundai India... Sounds unbelievable? But that’s exactly what nearly happened back in 1999 when HMI’s parent was battling the worst of the Asian crisis.
In his new book ‘Santro: The Car That Built A Company’, former HMI president B VR Subbu gives details of how Hyundai India almost became a wholly owned subsidiary of Maruti.
The backdrop of this neartakeover was the late-90s when HMI’s parent Hyundai Motor Company (HMC) was tackling the Asian currency crisis. At that point, “HMC had actually started looking at the possibility of a significant dilution of its equity holding in the Indian entity, even going to the extent of making specific applications to the Foreign Investment Promotion Board for offloading of 14.2% of the Rs 812-crore equity.” The book says the investment bankers handling the deal roped in Unit Trust of India (UTI) and American Insurance Group (AIG).
Though interested, however, the deal fell through on the issue of employee stock options and possible IPO of the Indian arm as well as the bigger issue of Korean banks developing cold feet. “The creditor banks of HMC worried about a debt overhang as HMC worked to offload a part of the HMI shares collateralled with them,” said Subbu.
That’s when, in mid-1999, Maruti came into the picture. “A global investment bank rumoured to be Bank of America” approached both GM and Maruti Udyog (MUL — it was still a Suzuki-government of India JV then). “SMC,” says the book, “probably did not then have the liquidity for the acquisition and in any case would have had to contend with the government of India …(in accordance with the terms of Press Note 1) if they wanted another plant in India.” The solution was to route the acquisition through MUL.
“SMC’s adviser apparently did not budge beyond Rs 30 per share offering, however, to put the MUL cheque on the table within a week of concluding the transaction,” says the book. That price was a little too low for the Koreans. As it turns out, HMI rode out the crisis as the sales of its flagship Santro model picked up speed, particularly with the launch of a Euro 2 variant even before the Euro 1 mandate. In August 1999, HMI made a cash profit and has since never looked back.
Safety tests
2022- 23: two models fair poorly
April 5, 2023: The Times of India
New Delhi : India’s largest car manufacturer Maruti Suzuki’s popular models — WagonR and Alto K 10 — fared poorly on safety parameters, getting only one and two star ratings respectively for adult occupants in crash tests conducted by UKbased non-profit Global New Car Assessment Programme (GNCAP).
Both the models also got zero star rating for child occupants, as per test results published by GNCAP on Tuesday. It said two other popular car models — Volkswagen’s Virtus and Skoda’s Slavia — got five star ratings for adult and child occupants. The GNCAP rates cars on a scale of “zero to five” based on their safety features and those with a higher rating are considered safer for occupants.
In a statement, the UKbased entity said Alto K10 showed a stable structure and marginal to good protection for adult chest to head in the frontal impact but showed weak protection tothe chest in the side impact. The WagonR also offered weak chest protection for the driver despite the improvements in the restraint systems by the manufacturer since the previous version of the model was tested. However, a Maruti Suzuki spokesperson said, “India’s crash safety regulations are almost similar to the standards in Europe and all our models meet these regulations and are duly tested and certified by the government. ” The company said the proposed Bharat NCAP, an India specific safety rating programme, will be more meaningful for Indian consumers.
Top leadership
Jagdish Khattar
April 27, 2021: The Times of India
In his long and distinguished career spanning well over five decades, Jagdish Khattar wore many hats, and almost all of them with aplomb.
Originally a bureaucrat who, among other achievements, was credited with setting up of nowbustling Noida as its first CEO (on the instructions of Sanjay Gandhi), Khattar transitioned — initially with reluctance — towards the corporate sector in July 1993 when at the age of 50, he resigned as an IAS officer to join what was then Maruti Udyog Ltd, a fledgling car company, jointly controlled by the government of India and Japan’s Suzuki.
Initial hesitance apart, Khattar never really looked back since then as he almost single-handedly built the foundations of one of independent India’s most successful public-to-private (sector) companies that today boasts of one of the biggest cash reserves (over Rs 37,000 crore) for a private enterprise, a staggering 50% market share, and a reputation of making all-weather, low-maintenance, value-for-money vehicles that have beaten products from almost all the world’s top makers such as Volkswagen, Toyota, General Motors, Ford and Honda.
Khattar’s only known failure was a self-venture ‘Carnation Auto’ (multi-brand car sales and service outlets). The venture after retirement from Maruti kept himself busy till his last days.
It was at Maruti Suzuki where his real acumen as a sharp, insightful leader came to the fore and where he not only built a large company, but also an institution which made deep inroads into the nooks and corners of India. As an aspirational and growing India started to think of cars, Khattar not only launched affordable models, but ensured that they were sold and serviced close to where people lived. The theme was even captured in Maruti’s campaigns that spoke about the company’s dealerships and service ability even in far-flung areas of the north and north-east. For dealers, Khattar made business more than just selling cars as he introduced new revenue streams through the concept of selling used cars, insurance, and financing.
But for all the success, Khattar was not even sure to join Maruti in the first place. “It meant quitting the IAS, and I had to literally persuade him to join Maruti and convince him that it was a good option,” R C Bhargava, seen as instrumental in Khattar’s selection and currently the non-executive chairman of the company, told TOI.
Khattar not only built scale and size, but also led a successful IPO for the company in 2003. And, he also groomed many future leaders of the auto industry. In its tribute, Maruti called him an “inspiring leader, a successful CEO, a celebrated bureaucrat, a passionate innovator and reformer and a truly people’s man”. Mahindra chairman Anand Mahindra said, “His demise marks the passing of an era. A bureaucrat-CEO-entrepreneur, his was a life of achievement and unceasing exploration. We need more like him.”
