Maruti

Around 1970, Sanjay Gandhi, the then Prime Minister of India Indira Gandhi's younger son, envisioned the manufacture of an indigenous, cost-effective, low maintenance compact car for the Indian middle-class. Indira Gandhi's cabinet passed a unanimous resolution for the development and production of a "People's Car". Sanjay Gandhi's company was christened Maruti Limited. The name of the car was chosen as "Maruti", after a Hindu deity named Maruti.

Maruti Udyog Ltd. (MUL) was basically formed to cater to the problems of insufficient public transport capability of the Government. During the early 80's, India was facing tremendous problems regarding public transport. And there was no possible solution to curb this problem. The Indian markets were yet to be opened to globalization hence; there were very few car manufacturers in the country. However, the need for an alternative was becoming very necessary, when the Government of India through an Act of Parliament formed Maruti Udyog Ltd. in 1981.

At that time Hindustan Motors' Ambassador was the chief car, and the company had come out with a new entrant, the Premier Padmini which was slowly gaining a part of the market share dominated by the Ambassador. For the next ten years, the Indian car market had stagnated at a volume of 30,000 to 40,000 cars for the decade ending 1983.

In the early days under the powerful patronage of Sanjay Gandhi, the company was provided with free land, tax breaks and funds. Till the end of 1970s, the company had not started the production and a prototype test model was welcomed with criticism and skepticism. The company went into liquidation in 1977. The media perceived it to be another area of growing corruption. Unfortunately, Maruti started to fly only after the death of Sanjay Gandhi, when Suzuki Motors joined the Government of India as a joint venture partner with 50% share.

After his death, Indira Gandhi decided that the project should not be allowed to die. Maruti entered into this collaboration with Suzuki Motors, The collaboration heralded a revolution in the Indian car industry by producing the Maruti 800. The car went on sale on December 14, 1983. It created a record by taking 13 months time to go from design to rolling out cars from a production line.

The introduction of the Maruti 800 in 1983, marked the beginning of a revolution in the Indian automobile industry. Maruti Udyog brought in the latest technology then available, more fuel-efficient cars, and brought down the prices of cars in India. This led to the creation of a huge market for all car segments as the Indian middle class grew in size. This in-turn brought in more players to this segment. A number of auxiliary car parts making units were setup as most car manufacturers realised it was more cost effective to make their car parts in India rather than import them. Maruti's most major influence was in helping the component industry in the country because of its emphasis on localization and indegenisation. As in the beginning that sector hadn't grown much, Maruti had to start a dozen joint ventures with Indian entrepreneurs. It got them foreign collaborations, that led to collaborations for other manufacturers so that over a period of time the whole component industry was able to upgrade itself and improve its quality. Leading to a major existing export potential in vehicle components. It also brought in better methods of financing that allowed more people, who given their income levels could not afford to buy a car on their own, to buy cars. It still remains the leader not only in terms of market share but also in customer satisfaction surveys - it has consistently topped J. D. Power quality surveys, including 2005.

By the year 1993 the company had sold up to 1,96,820 cars, mostly by selling its chief product the Maruti 800s. By March 1994, it produced one million vehicles, becoming the first Indian company to cross this milestone. It reached the two million mark in October, 1997 and rolled out its 4 millionth vehicle, an Alto-LX, on April 19, 2003.

Maruti 800, one of the first city cars, is the largest selling car in India. Recently, Maruti 800 went through some minor face lifts to maintain its dominance in the small segment cars. Maruti Alto is India's most popular and fuel efficient car. The maintenance cost of Maruti vehicles is also low as compared to the other manufacturers. This is one of the major USP's of MUL. Even technologically, they have attained a benchmark. They have introduced the superior 16*4 Hypertech engines in almost all their models.

This technology helps in increasing engine delivery. They have also introduced Electronic Power Steering in some of their models as well. MUL has three fully integrated production facilities with a range of 10 models in 50 variants. Their overall sales growth is of 15.8%, which also makes easier for the Indians to buy cars. Other successful small and big Maruti car models that have ruled the hearts of millions of Indians are Maruti Baleno, Maruti Esteem, Maruti Gypsy, Maruti Swift, Maruti Versa, Maruti Wagon R, Maruti Zen, Zen Estilo etc.

The variations available are:

In India, cars are still a luxury, but a luxury a growing number of Indians can afford. Small cars are cruising along, with sales growing at 17% a year. But with growth rates of 28%, it is the luxury car segment that is racing in top gear. Of the 20 new models to be launched in India during the second half of this year, several are luxury models. For many Indians, cars are more a lifestyle statement than a status symbol. Fuel efficiency and price tags are no longer the main deciding factors for the buyer.

Time was when one had to wait for months, even years, to buy a car in India. And the options of Indian drivers were limited to just a few home-made and heavy cars, such as the Ambassador. The collaboration of the Japanese car giant Suzuki with Indian car maker Maruti completely changed the market. Maruti 800, a small family car, became a prize possession for Indians.

Last year more than one million cars were sold in India. And sales figures are expected to surge for another 10 years. That makes India an extremely attractive market for international car giants. Rising disposable incomes, a changing lifestyle and foreign travel are being attributed to the growth of the car industry. But experts believe the main driver of the Indian car market is the availability of car finance on easy instalments and reasonable interest rates. Banks are bending over backwards to lure customers in need of car loans.

According to industry estimates, 80% of the one million cars sold in 2004 were financed by bank loans. And it seems there's no speed limit for the Indian car market as it races to catch up with the its great rival China. Last year Chinese buyers turned the keys in more than twice the number of new cars.

Some Interesting Facts:

• The first Maruti vehicle, a Maruti 800, was rolled out on December 14, 1983.

• Maruti rolled out its five millionth car from its Gurgoan factory around April 28, 2005.

• In 1987, the company exported for the first time, when a lot of 500 cars were sent to Hungary.

• By 2013, the global market share growth of India's Tata brand cars will be the highest among all brands, says a study by leading global market Intelligence firm US based Global Insight.