Business Standard

Maruti chairman says understanding customers key to firm's 40-year success

He said India is generally ranked low globally when it comes to the overall manufacturing sector, but in automobiles the country is the fourth largest car manufacturer in the world

R C Bhargava

R C Bhargava, chairman, Maruti Suzuki

Press Trust of India New Delhi
From what started out as an "accident" doomed to fail to becoming a dominant force in the automotive industry, helping the country to become the fourth largest automobile market in the world, the success of Maruti Suzuki India needs to be replicated in other industries, according to its Chairman R C Bhargava.
As the company gears up to celebrate 40 years of operations, Bhargava said Maruti Suzuki India has played a significant role in the development of the country's automotive industry, supply chain of components and allied sectors which are now playing a major role in the global markets.
In an interview with PTI, he said India is generally ranked low globally when it comes to the overall manufacturing sector, but in automobiles the country is the fourth largest car manufacturer in the world. Also, the components industry last year exported USD 19 billion worth of items.
"So, some of these things have to be viewed in the context of what we added to that thing," he asserted, adding that Maruti Suzuki is also the most successful Japanese car joint venture in the world.
Bhargava said, "Why is something which was so much doomed to failure by all the experts, becomes one of the most successful companies? And therefore the question which should be asked, I think, because it's important to know why something which is not supposed to happen happened. If it happened in Maruti, why not in other industries? It's the same country, the same people...?"

The reason for Maruti's success was its ability to understand the aspirations of the Indian people, the Japanese management system of efficiency and resource optimisation and trust between partners, management, workers and other stakeholders.
However, he pointed out that the journey for Maruti was not a smooth one and was full of challenges.
"We know how Maruti started and why it started. It was an accident. It was not a planned move on the part of the government that we need to develop a car industry in India that would be good for the economy, good for jobs, nothing of the kind," Bhargava recollected.
According to him, the project was taken up by the then prime minister Indira Gandhi to do something to "perpetuate what was closest to the heart" of her son Sanjay Gandhi who died in a plane crash. Sanjay loved car making and had started Maruti Ltd.
"So, she wanted that what was closest to Sanjay's heart should not die with him and against all wisdom of that time, she decided to start a car factory," Bhargava said.
At a time when existing car manufacturers Hindustan Motors and Premier were not even allowed to import technology, a public sector company was founded in such a low priority area and was asked to bring in foreign equity, he said.
"Everybody thought or believed that this was a political project which in a way it was. The same belief was known to all the carmakers the world over. When initially the government and then later Maruti approached carmakers for collaboration and became joint venture partners, nobody was willing to put in 40 per cent equity in cash," he recollected.
The global manufacturers were offering only second hand equipment, dyes and fixtures but Suzuki was the only company which was willing to invest, for which Osamu Suzuki was also severely criticised in Japan, Bhargava said.
"Forty years later people have forgotten how and why Maruti, which was not supposed to last and yet it has lasted...Why, despite all conventional wisdom that Maruti should fail in those times, has actually succeeded. And I think that's one of the key points of this 40 years thing," Bhargava said.
Maruti Suzuki is the leading carmaker in the country with a market share of more than 43 per cent in the passenger vehicle segment.
The auto major had achieved its highest-ever annual sales of 17,29,826 units in 2018-19, cornering a market share of 51.21 per cent. It, however, declined to 43.38 per cent at 13,31,558 units in 2021-22.
In FY22, the company reported a total consolidated revenue from operations at Rs 88,330 crore.
Its parent Suzuki Group has so far invested Rs 65,000 crore in India.

(Only the headline and picture of this report may have been reworked by the Business Standard staff; the rest of the content is auto-generated from a syndicated feed.)

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First Published: Aug 25 2022 | 10:47 PM IST

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