The Maruti Story

by R.C. Bhargava

Maruti is one of the few (perhaps only) shining example of a public sector companies in India to have achieved global competitiveness and made it big, giving the leading private companies a run for their money, and its story has to make for very interesting reading. What was the vision behind starting a car company in India? Why did they chose Suzuki as a partner? How did they navigate the red tape that ails most of Indian industry? How did they build a leader in quality, changed the rules of the game to make auto manufacturing customer centric?

Who better to tell this story than R.C. Bhargava, the man who built Maruti during its formative years and is still associated with it as its Chairman. In a very intruiguing account spread over two-and-a-half decades, Bhargava describes how Maruti was conceived, nursed, nurtured, grown and built into a giant of our industry.

What makes the story very interesting is the light it sheds on the changing face of Indian industry, since Maruti as a company owed its origin to the Emergency, nationalization, the license raj and saw through the changing economic climate of the country. The anecdotes of the author show how the company and the economy as a whole transformed, and gives us a view into times completely alien to our young existence.

I have read a number of books by the giants of the Auto industry – My Years with General Motors by Alfred Sloan, Lee Iacocca’s auto-biography, and I can actually identify with many of the things Bhargava describes as a result – the focus on quality, worker relations, dealer relations, focus on marketing and model development, emphasis on servicing – all of which were unknown to Indian industry at the time, and the way Bhargava describes how each of them were envisioned, and implemented, shows their foresight, strength of will and commitment.

Apart from that, Bhargava also describes some unique problems of being an Indian company – that too a PSU – where accountability and responsibility is a big issue. While we blame PSUs and the Government of demonstrating red tape and acting slow, the book also gives the lay reader an idea of why its so – most managers and civil servants will rather follow protocol and ensure that their decisions are always above board and measure up to the right standards of probity since the downside of being caught in a political storm is very high. Bhargava himself describes a number of CBI enquiries and charges of corruption being levied by him by political opponents who wanted to settle an old score. It’s only justified that in all of these cases, the individual manager would want decisions to be taken in such a manner that responsibility is shared and nobody can be “blamed” for any particular decision later. The fact that the Maruti management was able to cut through this red tape and still build a company of its stature is remarkable (of coursing, having Suzuki as a JV partner and blaming tough decisions on them is an important aspect of it).

Some key take aways for me were:

  1. Having a lofty vision and very high ideals to begin with are very important to build a sense of purpose amongst the team
  2. Having a shoulder from which to shoot from – and people who are above the circle of responsibility which enables justification of key decisions and pushing them through
  3. Communicating the right ideals of all stakeholders, and leading by example (uniforms in Maruti are still followed; I had even heard one of my classmates from IIT complain about it!)
  4. Managing bureaucracy, relationships, governments, partners can be extremely tricky and once again one has to be strong up front
  5. No compromises on quality

One grudge I have against the authors is that there are so many anecdotes that some of them are not as well covered – perhaps the editor could have given some direction on pacing the book well. Similarly, the book seems to sag in places and its easy to lose interest.

For anybody who really wants to understand the evolution of Indian industry, this is a great resource.

Small Car, Giant Leap

image Ratan Tata really pulled it off. Half a decade back, he had said that he wanted to give India a small car that would be within reach of the millions of Indians who have to make do with two-wheelers, and last week in the Auto Expo, he delivered on his promise. And in what style — the whole world sits up an takes notice! The media’s been abuzz with the grand success that Tata has pulled off, to the dismay of all nay-sayers who believed that the car who found a thousand and one ways to make fun of the whole concept.

Even after the car came out, people have been debating why we need to clog our roads further, how RK Pachauri’s heart would miss a beat, and Sunita Narain would get a shiver down her spine, and Chidambaram due to the oil import bill. While I agree that such a cheap car is such a disruptive thing that the whole way we think about roads, infrastructure, and gas imports needs a rehash. (This really came out of a discussion on the Blogaloreans mailing list:) I would say that in the midst of all the praise and criticism, we miss a few important points.

Firstly, the car is not made just for the cities. The whole problem of parking and traffic vanishes as soon as you move outside the city’s center. The upshot for the rest of the country is far too high to just write off the car. Personally to me, preventing less privileged people from having the luxury of cars when the more affluent income groups easily swift around is a rather elitist point of view. To quote form WorldChanging:

Which leads us to the inescapable fact that a Tata Nano in Chennai is, from the biosphere’s perspective, similar to a Toyota Corolla in Vancouver.

Even within the cities, the traffic argument fails to pass muster when you consider that traffic and other problems would occur anyway — Nano or no nano — and all the new car has done is to accelerate the process. We would have to come up with more innovative means of handling the growing traffic on our roads anyway (taxing vehicles in the Central Business District like in London is one idea) and improve the mass transport system (like in Kolkata and Delhi). The government and the Municipal Corporations need to be more proactive both in legislation and regulation.

I am personally of the view that a car should be used as a means of last mile connectivity and local transport, and I like the concept of driving to the nearest Metro station, park your car there and go to work using the Metro. IMHO, this is the model that can scale in the long run. Obviously, another important use of a car is the drive through the highway, where the safety of a car is far more reassuring than a bike or a scooter.

Autos and cabs would be another thing that would benefit greatly from this development, and if we think about what causes the most madness on the roads (autorickshaws, bikes and the like) we would be better having single-sized four wheel vehicles, which have no option but to stick to the lane discipline.

image There are other fallouts as well, the chest thumping we can now do in a major manufacturing conference is only one of these. The world is sitting up and taking notice of India’s design and engineering prowess, and I am sure the outsourcing companies have already started giving higher revenue projections. The Tata car has almost become a barometer in some circles, and its making its competitors re-think their strategy. It’s already got them new enemies — Bajaj was so worried that he announced his own car! And the ramifications are not limited to the automobile segment alone! The new car revolution might just take the country by a storm just like the mobile revolution, and change our fundamental assumptions about a host of things.

All said and done, to me the biggest advantage of this new development is that Indians will have another thing to boast about — when they promised and delivered. It will add a new spring to their step, and inshallah, help our country forward over the coming years.

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