We have completed 40 years in India, 40 years since Japan’s Suzuki [Motor Corporation] signed an agreement with Maruti Udyog for a joint venture (JV). I think, the thought behind us celebrating this is that in many ways, these 40 years and this partnership have resulted in things happening that were not at all foreseen 40 years ago. This has surprised most people who were around at that time. Not just in India, [people] in Japan were equally surprised by what happened in India. Mr [Osamu] Suzuki once told me that when they decided to partner with India, he was the only one in favour; everyone else thought… India, public sector, car making… what kind of a decision is that? That’s what most people felt here: carmaking in a socialist India. The existing carmakers were going nowhere. The market was stagnant with 35,000-40,000 cars. Everything was wrong in those days—there were foreign exchange shortages, there were restrictions on all kinds of imports. So, it was really not anything that excited anybody. We should think back, why and how it happened. And, is there anything we can learn from these 40 years of partnering with Japan? And the experience of Maruti that can help us, going forward, in achieving the Prime Minister’s [Narendra Modi’s] vision for 20-25 years?
We all know that the coming of Maruti, in many ways, has changed the face of India—the cities look different, the roads look different, the kind of people who are driving cars are different. We never saw [so many] women who drive cars 20-30 years ago before Maruti came. Hardly any lady would want to venture out in an Ambassador on her own. This [the coming of Maruti] also gave them an opportunity to join the workforce more easily because going in a bus was never a good option for most ladies. A lot of entrepreneurs came up because they had the ability of low-cost transport. We got a lot of support for our plant in Gujarat when Mr Modi was the Chief Minister. At that time, there were a lot of industrial activities happening in the state. When we started looking around for expansion, Gujarat had two major factors in its favour. One, the state administration appeared to be by far the most industry-friendly administration anywhere in the country. That’s why people were coming to Gujarat and things were happening quickly. The second was, of course, the fact that the state was close to the port where we were exporting from. And that would save a lot of money.
What has come out in these 40 years is that the people of this country are looking to get a good, convenient means of commuting. It’s not like we did something extraordinary. We wouldn’t have succeeded if the consumers of this country had not wanted this to happen. Companies succeed because the customer wants that company to succeed. We’ve learnt this lesson that if you continue to do what is expected or desired by the masses, you cannot but succeed. I’m reminded of my time as a bureaucrat who decided what everybody else should have. We thought we were very smart but we weren’t. Consumers were the last on our minds. One big learning has been to listen to the people.
Till a few years ago, I had become quite pessimistic about many kinds of industrial growth in India because various things used to be said, but nothing would happen on the ground. I was part of a committee, which was set up by the Planning Commission to increase industrial competitiveness. We had a lot of meetings and discussions but nothing happened. But this government says that manufacturing growth is the key to India’s progress and that started the whole programme of ease of doing business in India. The government is working on identifying the pain points in doing business and removing those. It had never happened in the past. They recognise that the private sector will be at the forefront of economic growth. That profit is not a dirty word anymore. That makes you realise India is changing. There’s hope for the future. In the next 10 years, [more] public sector [firms] will get privatised. To me, this is all music.
After 55 years in the government and public sector and now private, I have no doubt in my mind that the way forward for India is to rely on the private sector. The public sector in our country, in terms of constitutional restrictions, legal structure, and irrespective of the kind of people you put in the sector, is handicapped by the entire environment. We’re not an exception to that. Public sector has never functioned in any part of the world. Russia was the biggest exponent of the public sector. We saw what happened to it. Other countries like the UK, France, Japan, etc., had a public sector... everybody is getting out of it. Of course, our private sector also has a lot of blemishes. If you balance the negatives of both public and private sectors, it comes far more in favour of the private sector.
I see a very bright future for the automobile industry for the simple reason that mobility is an essential requirement for economic progress. For the last so many decades, we haven’t found a better form of mobility than the automobile, which is convenient and safe. Of course, we have to go green because the damage that’s happening to the world through climate change; you have to take corrective actions. India is underpenetrated in terms of personal mobility. The entry-level segment shrinking in India is not a fear for the company because I have the option of moving to the segments that are more profitable. We have been a little late in moving to the higher segments, but that’s a temporary measure. However, we will maintain our profits and market share. That’s not a concern.
The consumer has trust in the brand. I am concerned by the fact that this movement, which is happening—where the small-car market is getting squeezed and the upper market is getting better—is a direction that doesn’t leave me happy. I don’t like the fact that a large mass of people who for decades had an aspiration of moving up are finding their dreams going away. A country can’t move on two-wheelers. It is not an efficient form of commuting—it’s unsafe, it’s inconvenient in terms of climate, [and] not suitable for families. We’re the only country in the world where the bulk of the people travel on two-wheelers. The car industry has to move up; otherwise the whole effort to uplift the life of people will not succeed. That’s why there’s a very bright future for the car industry in India.
R.C. Bhargava is Chairman of Maruti Suzuki India Limited (MSIL). Views are personal. Compiled by Prerna Lidhoo from his statements at a media event
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