Jagdish Khattar: The man who resuscitated and re-built Maruti Suzuki
Sumant Banerji April 26, 2021
One of India's most prolific top bosses in the automotive industry, Jagdish Khattar, who steered the ship at Maruti for 8 years till 2007, succumbed to a cardiac arrest early morning on Monday. He was 78.
Often referred to as the Lee Iacocca of motown in India, Khattar is credited with rebuilding Maruti into a strong and independent company that enjoys an enviable hold in India's passenger vehicle market. Soon after he took over as the top boss at Maruti, which was called Maruti Udyog Limited at that time and was a joint venture PSU with the government holding 50 per cent stake, Khattar faced a debilitating 90 day workers' strike at the Gurgaon factory. They were demanding higher wages.
At a time when multinational companies were entering India in droves, this would have raised costs and made the company even more inefficient. With the support from Suzuki, which was then a minority shareholder, Khattar dug his heels and dealt with the workers with an iron hand. An ex-bureaucrat, he had joined the company as a government nominee in 1993 and, along with current chairman R C Bhargava, helped bridge the trust deficit between the government and Suzuki.
"The 2001 strike was one of the toughest periods that I came across in Maruti Suzuki. It was actually the turning point," he reminisced in 2007 when he was leaving the firm. "If we had given in, we would not be where we are today. Salaries would have gone up and we would have become inefficient. Our competitiveness in the market would have been blunted."
The strike impacted the company's position in the market as its share fell from a commanding 79 per cent in January 1999 to just 51 per cent a year later and a new low of 42 per cent in June 2000. Khattar nursed the company back to health before hitting back at the competition with a flurry of launches that included Wagon R, Alto 800, the original Baleno sedan and Altura station wagon as also a revamped M800, which was at that time the best selling car in the country. By June 2001, Maruti had clawed back to 60 per cent share.
Under his stewardship, Maruti also made the smooth transition from a PSU to a private firm as the government bowed out in 2007. Another high point was the launch of Swift hatchback in the summer of 2005. Khattar knew that the customers would eventually graduate from no frills entry level to bigger and more powerful cars. Swift has gone on to become one of the most successful cars in the company's portfolio and 16 years hence, it has overtaken Alto to become the bestseller in fiscal 2021.
Khattar, an arts graduate from the prestigious St Stephen's College in Delhi, went on to acquire a degree in law and joined the IAS. From heading various posts in UP state administration to becoming a joint secretary in the Ministry of Steel, and finally the MD of India's largest carmaker, one would have thought his story is done by the time he hung his boots in 2007. Instead, Khattar was just getting started.After his stint at Maruti, he stoked his inner entrepreneurial instincts, after all he belonged to a family of entrepreneurs, with his maiden venture Carnation. He sought to create a multi-brand automobile service network that undercut those owned by companies directly. Unfortunately, success eluded him this time and instead it brought him much agony.
The failure of the business venture saw CBI booking him in 2019 for an alleged fraud to the tune of Rs 110 crore on a complaint by Punjab National Bank. Khattar suffered his first cardiac arrest in January 2020, but survived. This time, he couldn't.
While Carnation may have turned out to be a failure, Khattar was not. The Indian industry, Maruti Suzuki and its millions of customers owe him a debt.
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