From our first prime minister to the Supreme Court of India, the list looks at names that changed the course for the industry.
Published on Aug 11, 2022 06:16:00 PM
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Since Independence, the Indian auto industry’s destiny has been in the hands of political leaders and business heads. We pick the people who made the biggest difference. Not surprisingly, three out of 10 names on the list are from Maruti, the company that has written the most important chapter in India’s automotive history in the last 75 years.
Under Jawaharlal Nehru, our first Prime Minister, India adopted the former Soviet Union’s socialist ideology and centralised planning. Protectionism was the basis of the Nehru government’s policies and it was seen as the best way to make a newly born nation economically independent. The automotive industry, in particular, was among the victims of the government’s active role in economic planning. Considered as manufacturers of ‘luxury’ products – anathema to the socialist values of policymakers – the auto industry was treated with contempt and subjected to stifling regulations. Only a handful of car companies were allowed to operate, choice was limited and consumers bore the brunt of obsolete and poor-quality products.
Some would say that Nehru had no choice but to take the path of socialism to pull India out of poverty, but there is no doubt that the policies he set in motion froze the progress of the auto industry for three decades, while the rest of the automotive world raced ahead. One can only speculate what the destiny of the auto industry would have been if Nehru had taken a more laissez-faire direction.
Why: His stifling policies froze the auto industry for three decades.
It’s ironic that the first whiff of liberalisation the auto industry got was courtesy Nehru’s daughter. In 1981, Indira Gandhi, then Prime Minister of India, nationalised Maruti Motors Limited, a defunct car company formed in 1971 by her son Sanjay Gandhi. It was the PM’s desire to make Maruti Udyog Ltd a monument to her late son (Sanjay Gandhi died in 1980 in a plane crash in Delhi) and so her government invited foreign automakers to collaborate with this newly formed public sector company. Yes, the Indian government wanted to make cars!
This change of heart saw the state taking a direct interest in the auto business and it is believed that various government departments were instructed by Gandhi to immediately clear any Maruti files. Instead of red tape, Maruti Udyog got the red carpet from bureaucrats and policymakers, much to the angst of private sector players who struggled to get permissions and approvals in what was still a heavily regulated industry.
Why: Because she got the Indian government into the business of making cars and gave birth to the car revolution.
It was only Osamu Suzuki’s doggedness that saw him edge out giants like Volkswagen, Renault and Fiat, as well as fellow Japanese rival Daihatsu to form a joint venture with Maruti Udyog. Partnering with the government and investing in a country which had no history of car making was an incredible leap of faith. However, the shrewd Suzuki knew he had exactly what India needed – a modern, reliable and fuel-efficient car that was cheap to buy and own. Suzuki’s little SS80 (and subsequently SB308) sparked a revolution and put an entire nation on wheels. The Maruti 800, and subsequently the Alto, set the baseline for all cars to be measured against and shaped the structure of the market that developed a strong preference for small cars. Osamu Suzuki has himself directly steered Maruti Udyog (now Maruti Suzuki) and has battled the Indian government, competition and predatory alliance partners for over three decades, and at age 92, is still very much in charge.
Why: Because he took a punt on India and put a nation on wheels with his little Suzukis.
Faced with a balance of payments crisis in 1991, India had no choice but to liberalise the economy and open it up to foreign investment. Though it was Finance Minister Manmohan Singh who presented the landmark budget that year, the title of ‘the father of economic reforms in India’ goes to the then Prime Minister, PV Narasimha Rao. He took the politically tough decision to open up the economy, deftly garnering outside support for his minority government to push the reforms through. Once on the path of economic liberalisation, there was no turning back, and in 1993, Rao’s government de-licensed the auto industry. After 40 years, the shackles were off.
The de-licensing of the auto industry opened the sluice gates to a flood of international automakers who saw India as the world’s last remaining untapped market.
Why: Because he opened up the auto industry (and the economy) to the world after 40 years of isolation.
If there is one Indian who single-handedly built an Indian car company and made it global, it has to be Ratan Tata. He took over as chairman of Tata Motors in 1991, just as the Indian economy was being liberalised, and made the most of it. The Indica, Ratan’s first baby, which he was closely involved with, catapulted Tata Motors smack into the thick of the action in the car market. That the rough-around-the-edges Indica could hold its own against global brands rushing into India in the mid-1990s is a testimony to the sound concept of the Tata car which was conceived exactly around an Indian car buyer’s needs. In a sense, the Indica was the most crucial point in Tata Motors’ 77-year-old history, because had this hatchback failed, Tata Motors may have gone back to making trucks and UVs. Without a passenger car division, Ratan’s other masterstroke, the acquisition of Jaguar-Land Rover may not have had the springboard to come to fruition. Ratan’s decision to acquire Jaguar-Land Rover in 2008 made Tata Motors truly global and put India Auto Inc on the world stage.
Even today, Ratan’s legacy is an intrinsic part of Tata Motors’ recent success. The Tiago has its roots in the original Indica and the bestselling Nexon is derived from the second-gen Indica Vista platform (X1), which he signed off on. Ratan’s other pet project, the Nano, may have been a market failure, but the frugal ingenuity with which the Nano was built inspired companies like Renault and Nissan to produce their own low-cost cars.
Why: Because he single-handedly built an indigenous car company and made it global.
The key to Maruti’s success has been its management. In its formative years, the company’s managing director RC Bhargava’s first objective was to ensure that the fledgling joint venture between Suzuki and the Indian government (which had a majority 76 percent stake) got not only the best technology from Suzuki, but also imbibed the highly efficient work culture of the Japanese. Bhargava, a former IAS officer, turned Maruti into the jewel of the public sector and made the company the Indian auto industry’s biggest success, with an astonishing 80 percent market share.
Bhargava was also responsible for progressively increasing Suzuki’s stake in the joint venture to an equal 50:50 (from the original 26:74). Then, after an ugly spat between the two partners over control of the company (it ended with the government deciding to get out the business of making cars once and for all), Bhargava deftly put Suzuki in the driver’s seat. Without Bhargava to guide and advise Suzuki, the company’s fate could have been very different, and it’s with good reason that he still has the complete trust and ear of Osamu Suzuki. Well into his 80s, Bhargava still continues to be at the helm of strategic affairs of the company.
Why: Because he made a public sector undertaking imbibe the work culture, efficiency and manufacturing processes of the Japanese, which became the bedrock for Maruti’s dominance.
Anand Mahindra has been at the helm of a company that bears his name for over 30 years, spearheading the transformation of Mahindra & Mahindra from a maker of rugged and utilitarian vehicles to an aspirational brand that could compete with global players. It was on Anand’s watch that the first-generation Scorpio was developed at a cost of Rs 600 crore, a fraction of what it would have cost any multinational to bring out a similar kind of SUV. It was also Anand who resisted overtures from then joint-venture partner Ford to develop the Scorpio, which in the long run could have threatened Mahindra’s independence.
The Scorpio changed the perception of Mahindra once and for all and the way people looked at SUVs – not as a utilitarian people carrier, but as a serious alternative to a car. Since then, Mahindra has not looked back and despite several speed bumps along the way (like the aborted JVs with Renault and Ford), the company has remained independent and grown into a significant force, fending off intense global competition and winning hearts with iconic products like the Scorpio, Bolero and Thar.
Anand stepped down as M&M's chairman and relinquished his executive role in November 2021 but not before leaving the company in good shape and in good hands. There’s a resurgence at Mahindra led by a dynamic new team hand-picked by Anand. It is, on the back of a new crop of smash hit products, taking the company – and its share price – to new heights. Anand’s best talent has been to get the best talent; from Pawan Goenka to Anish Shah and Rajesh Jejurikar, all the people he has picked have shown great leadership in turn to run the company. As a custodian of the brand started by his grandfather JC Mahindra, one of Anand’s last jobs as chairman was to get Mahindra to focus on its core DNA and do what it does best – build true blue SUVs. The success of the Thar, XUV700 and Scorpio-N is proof that this strategy is working, brilliantly.
Active on social media, Anand is a huge influence and inspiration to the millions of people who follow him.
Why: Because he transformed Mahindra from a maker of rugged and utilitarian vehicles into an aspirational brand without losing sight of the company’s heritage and legacy.
No politician in recent times has had as much of an impact on the auto industry as Nitin Gadkari, and that too on multiple fronts. In 2014, he became the Minister of Road Transport and Highways after the Narendra Modi-led government came to power, and Gadkari immediately picked up from where the last NDA government had left off in 2004. He upped the pace of road construction exponentially. With new highways sprouting all over the country, it was no coincidence that motorists were switching to bigger and larger cars (mainly SUVs) better suited to long-distance travel.
The auto industry hasn’t had it easy with Gadkari at the helm of MoRTH. His famous comment when he threatened to “bulldoze” carmakers if they didn’t comply with the latest emission standards reflects the often tough approach the government takes towards the auto industry.
On the safety front, it was Gadkari who pushed for the latest crash test norms, which came into effect for all cars in 2019, and in the process weeded out genuine death traps from Indian roads. The 120kph speed warning buzzer is possibly the single most important safety feature he initiated. However, Gadkari has made a habit of prescribing what technologies to use rather than simply setting the norms and letting the industry work out how best to meet it. His insistence on a switch to ethanol fuel and, more recently, an unreasonable demand to make six airbags mandatory for all cars has caused tremors in the industry.
Why: He gave us expressways and has a strong – and often unsettling – influence in the move to stricter emission and safety standards.
If RC Bhargava built Maruti into a towering automotive giant, it was his successor, the late Jagdish Khattar, managing director from 1999 to 2007, that turned this monopolistic monolith into a customer-facing and consumer-led company.
Khattar was not a car guy and didn’t pretend to be one. The secret of his success was finding his way into the hearts and minds of his customers. His passion for customer service is what built Maruti’s unbeatable reputation for customer-centricity and the company is still enjoying the fruits of Khattar’s efforts. In fact, in the face of superior competition, Maruti Suzuki today is encashing its reputation of delivering a pain-free ownership experience. The blind trust customers have in the brand was built and nurtured by men like Khattar.
It was Khattar’s relentless pursuit of building trust with customers that helped the turnaround of Maruti whose market share, thanks to a three-month strike and weak product pipeline, had fallen to an all-time low of 40 percent in 2011. Making service more affordable and accessible, propping up residual values and offering value added services are some of the tools he used to win customer loyalty. Decisive, visionary and passionate, Khattar transformed Maruti into a more agile company that could react faster to customer needs.
Why: Because he always had the customer at heart and set new benchmarks for customer service, which has been a key factor in Maruti Suzuki’s success.
Right from the time a handful of Indian carmakers went to the Supreme Court seeking relief against oppressive price controls imposed by the government in 1969, to the tough stand the judiciary took against the plea by the auto industry for a deadline extension for BS4 sales, the top court’s judgements and verdicts have sent shock waves throughout the industry.
The judiciary’s intervention is largely around enforcing emission regulations and deadlines to curb vehicular pollution. In a landmark ruling on April 29, 1999, the Supreme Court ordered Indian vehicle manufacturers to overnight switch to stricter Euro II norms, or take their cars off the road. The deadline for Euro I norms was brought forward by nine months, and so was the deadline for Euro II – by five years to April 2000! “If we have to choose between economy and public health – we will choose public health,” the bench had famously said.
Though well intentioned, some of the rulings of the Supreme Court have been overzealous and have resulted in thousands of crores of cumulative losses for companies without any real impact on air quality. In December 2015, the Supreme Court banned diesel cars over 2,000cc overnight, an illogical ruling that appeared to have more to do with punishing the rich than cleaning up the air. (The ban was, however, lifted a year later.) The bigger headache for the auto industry was the top court’s decision to stop the sale of BS4 vehicles by April 1, 2020, (the switchover date to BS6) and not production, which is the globally accepted norm for a smooth transition. To end BS4 sales on March 31 was a logistical nightmare because the sale of cars is what the market decides and not auto companies.
The global lockdown just before the April 1 deadline left some automakers stranded with unsold (and unsaleable) BS4 models, and manufacturers had to seek special exemptions from the Supreme Court to be allowed to sell them after the deadline. What’s for sure is that the Supreme Court has played its part in pushing manufacturers to clean up their engines.
Why: Because the judiciary’s intervention in enforcing legislation has had a seismic effect on automakers' plans.
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