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25th anniversary of Maruti Suzuki car
that transformed India's motor industry |
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| New Delhi, December 16, 2008 |
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It will never be as famous
as the Model "T" Ford, nor the Volkswagen Beetle, but the little Maruti
Suzuki 8OOcc car that was first sold 25 years ago today is the most significant
vehicle ever produced in India.
The Ambassador is of course India's most iconic saloon, but it is a symbol
of the manufacturing industry's failings, whereas the Maruti has been the
catalyst for India's modern and internationally competitive auto industry.
Today is the 25th anniversary of Indira Gandhi, then the prime minister,
releasing the first ten 8OOcc cars to their customers at Maruti-Suzuki's
Gurgaon factory on the outskirts of Delhi in 1983 - where she was shown
(below) the factory plan by V. Krishnamurthy, the company chairman.
I was there, as The Financial Times' new south Asia correspondent, and the
next day reported O.Suzuki, chairman of the Japanese company, saying: "It
is difficult to have a good operation in India". He added that it would
be achieved "providing the Indians do not expect to make too many of their
components too quickly".
Demonstrating the new start that Maruti marked, the imported management
style decreed "the recruitment of shop floor workers with an average age
of 20 who have never worked anywhere before, wear grey overalls, do physical
exercises every morning and prompt time-keeping".
It's obviously worked because a total of 2.7m of the 800's have been produced
and it is still being sold - for Rs215,000 ($4,500), having been launched
in 1983 for Rs52,500 ( then about $5,000).
I remember people in Delhi wondering how they would fit a driver into such
a small car along with their families (they did!), and complaining about
how it nipped in and out of the traffic around stodgier vehicles (similar
to earlier complaints in Britain about the iconic Austin-Morris Mini) the
Maruti 800.
"The 800 made India a country that is now on wheels", R.C.Bhargava, who
was managing director years in the 1980s and 1990s and is now the chairman,
told me today.
Originally an Indian government-Suzuki 50-50 joint venture, the company
is now Suzuki controlled and is producing 750,000 cars of all shapes and
sizes. It is the clear market leader with a 40% market share.
Bhargava worked on the launch with Krishnamurthy, the founder-chairman who
had been a top bureaucrat and now, in his 80s, heads the government's National
Manufacturing Competitiveness Council.
Krishnamurthy was told by Indira Gandhi to revive the bankrupt Maruti car
venture that had been started by her late son Sanjay Gandhi, and produce
a "people's car".
She didn't get what she wanted because the 800 became a car for the middle
classes and was followed by larger models. But she did get a hugely successful
joint venture with Suzuki which began to unlock India's hidden manufacturing
strengths that had been bottled up by post-independence economic policies.
O.Suzuki's remark about not making many components quickly in India stemmed
from the fact that there were virtually no component suppliers that could
begin to make acceptable parts. There were also no concepts of quality or
production control. Maruti changed all that, sparking a revolution that
is now spreading across India's manufacturing industry, which is why today's
anniversary is so important.
"Maruti brought to India the concepts of tight cost control and process
engineering," Gautam Thapar, chairman of Avantha (BILT, Crompton Greaves
etc), told me for a Fortune magazine article two years ago. "It brought
the first wave of modern component technology with the concept of Indian
entrepreneurs and Japanese companies together supplying Maruti as an anchor
client".
Baba Kalyani, chairman of Bharat Forge, the world's second-largest forging
company, agreed: "It brought in a completely new breed of component manufacturing
with modern products and processes. A new culture started".
Not only were there no adequate component suppliers in 1983, but there was
no concept of partnerships between a manufacturer and its suppliers. "A
supplier was treated almost like a servant," said Bhargava
Maruti changed that with a supplier development program, taking 25% equity
stakes in some companies from Japan and elsewhere. Clusters developed in
three locations, one of them around Maruti's factory in Gurgaon on the outskirts
of Delhi. Workers and suppliers were sent to Japan to learn management and
production techniques and this interchange continues today - Maruti design
engineers worked in Japan on the Swift that was launched in 2005.
Maruti has never had the recognition it deserves as the catalyst for India's
modern motor industry, nor for its wider impact on manufacturing. Krishnamurthy
and his team created something of far more lasting importance than other
more famous names - you see the result on Indian roads every day. |
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