Opinion: What makes Maruti Suzuki tick?

Maruti Suzuki India Limited has marked “40 years of Suzuki’s partnership with the people of India” with the triple announcements of a battery plant, a vehicle plant and an R&D centre on August 28. As the country’s leading automaker, this is a huge milestone indeed. As an industry that contributes close to 8 percent of India’s GDP, this is a huge fillip at revival, and, as a country, this is a grand testimony to the “Make in India” initiative. As an alumnus, it is a matter of huge pride for me.

I have been fortunate to have had two stints in the company – during its 10th anniversary and also its 20th. And since moving out almost 20 years ago, I have watched the amazing tapestry of its journey with the same level of keenness, involvement and opinionated passion as when I was there.

I believe there are four things that helped forge Maruti / Maruti Suzuki in its first 20 years, and that has allowed it to hold fort for the next 20. They are the reasons and not the results that make the organisation what is today – a “national institution” and not merely a maker of automobiles.

The employee

Bring in the best of machinery, processes, systems and software, but if the people are not up to it, then nothing works. In my professional career of three decades, across organisations, I have rarely come across a group of people so committed to the cause. Clarity and culture followed.

There is an incident I vividly recollect from my summer internship in 1990 on the shopfloor. At the fag end of the mandated time-bound tea break, an operator lit a cigarette and took just one puff when the bell rang. In one snap he snuffed out the cigarette and was back to his position on the assembly line. Not a second puff!

The stereotypical lazy and undisciplined Indian worker was a transformed soul here, on a collective mission. The stereotypical autocratic and incompetent manager was a professional here, believing in teamwork and target achievements. It is as if each who joined the organisation wanted to really make a difference. The mind was open to learn, absorb, share and experiment, and the plant had a unique mix of Japanese industriousness and Indian ingenuity.

The customer

The Indian middle-class customers finally had an Indian middle-class company give wings to their dreams of owning a car. The HMs and Premiers of the world were the big industrialists who were doing a favour by allocating a car, at their pleasure, and at their desired level of service. Here was the state’s zeal in democratising mobility after years of licence-driven scarcity. A personal car was not elitist anymore.

The middle-class customer wanted an automobile that was reliable, durable, economical and driveable. The tiny little Maruti 800s were exactly that. The company understood the fundamental pain points and went about addressing them. In a country where not even 30 people out of 1,000 can afford to own a four-wheeler after 75 years of independence, the average customer still needs the same qualities in an automobile – bells and whistles can come later.

The Indian customer has built an indelible bond with the Maruti brand, which allows it to hold over 40 percent market share, even after 40 years of operations with close to 20 global brands in the fray.

The chutzpah

One would imagine that a “sarkari” organisation run by Japanese management principles would behave demure and introverted. Not this one. I cannot forget a comment made by then MD Jagdish Khattar at a press conference in 2003/04 when announcing a price cut. A journalist commented, “Won’t you bleed by this?” He answered, “I may bleed, but I will give the competition a haemorrhage.”

Maruti Udyog was not your stereotypical PSU. It had an operating style which was independent, opinionated and market driven. It could not be taken lightly, nor could its opinion swept under the carpet.

It carried a certain streak of audacity in its behaviour and many initiatives bore that streak. Like launching a van and an SUV within the first two years of its operation rather than resting on one car; participating in the Himalayan Rally with a factory team; honing Peugeot’s TUD5 into the Zen as if it always belonged here; creating the Formula Maruti for Indian motorsports; starting businesses like finance, accessories, insurance, extended warranty, fleet solutions and used car sales under its own umbrella brand; creating a special finance scheme for teachers; launching a car through a movie and not on television. The list is endless. Each hammering home the fact that Maruti always understood the customer better. Typical fare for B-school case studies.

The purpose

This was the overarching factor that put all other pieces of the jigsaw puzzle in place early in the life of the organisation. The greater purpose of building a still young nation by “democratising mobility” was ingrained into the ethos of each stakeholder. And the purpose was translated into a credible promise with the entire ecosystem geared up to deliver the same, time after time.

For the first 20 years of its existence, till 2000, the promise was “the lowest cost of acquisition”.

Everything was around making the automobile more affordable to buy. The ecosystem was set up with an eagle eye on cost efficiency and process efficacy through better planning, designing, ordering, laying-out, quality control and servicing. The most fuel-efficient cars were also the cheapest.

For the next 20 years it has been “the lowest cost of ownership”.

The same ecosystem was rejigged into covering all aspects of vehicle ownership, across buying, running, insuring, financing, servicing, personalising and even selling back. The internal transformation was fast and furious led by some of the best brains in the business. And again, teamwork and a collective zeal ensured it happened to almost fastidious levels of process perfection and customer delight!

And for the 20 years ahead?

Who knows, it might as well be “the easiest way to multi-modal mobility”.

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Celebrating 40 years in India, Maruti Suzuki readies a mega push