First Published: Fri, Feb 07 2014. 05 09 PM IST

How Maruti 800 changed the dynamics of Indian car industry

Maruti 800 holds a special place in the hearts of millions of Indians, and in many cases it was the first car owned by a family
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How Maruti 800 changed the dynamics of Indian car industry
Maruti 800, which was produced for the last time on 18 January by Maruti Suzuki India Ltd, gave wings to the dreams of a burgeoning middle class in an economy that was slowly opening up to the world. Photo: Pradeep Gaur/Mint
Prathap Suthan, chief creative officer and managing partner of advertising agency Bang In The Middle, who is known for his work on campaigns such as India Shining, claims that his mother was allotted the second Maruti 800 that was sold in Kerala.
“India is certainly poorer without the 800, and I wish to thank it for all the rides, journeys and for being a faithful and dependable companion in the earlier phase of my career,” says Suthan.
Like Suthan, Maruti 800 holds a special place in the hearts of millions of Indians, and in many cases it was the first car owned by a family.
Kiran Khalap, co-founder of Chlorophyll Brand and Communications Consultancy Pvt. Ltd, a brand and communications consultancy, also recalls the iconic hatchback with fondness. “Maruti 800 wasn’t a car; it was the signature, the tattoo, the oscillograph of an entire generation,” he says.
Maruti 800, which was produced for the last time on 18 January by Maruti Suzuki India Ltd, gave wings to the dreams of a burgeoning middle class in an economy that was slowly opening up to the world. The model was the best-selling car in India until 2004 when Maruti launched Maruti Alto, a small car with more modern looks and advanced features. Banking on the huge middle-class population, the car redefined the dynamics of Indian automobile markets.
The car’s first customer Harpal Singh, an employee of the erstwhile Indian Airlines, passed away a few years ago. He kept the Maruti 800 for his lifetime.
Maruti 800’s success can be gauged from the fact that the size of Indian passenger vehicles grew from 40,000 units in 1983 to 150,000 in 1987. Critics who expected the company to sell fewer than 40,000 units a year were dumbfounded when Maruti announced it has received bookings of 125,000 units for the first year though it could only produce 100,000. In the nine months ended 31 December, sales of Maruti 800 rose 22% to 17,000 units, outpacing overall passenger car sales, which declined 5%.
At the end of last fiscal, as many as 1.9 million cars were sold in India and some 550,000 units were exported. This made India one of the most lucrative car markets in the world.
“All of this did not happen overnight,” said Surinder Kapur, chairman and managing director, Sona group. “Maruti 800 was a reason why we have a strong component industry at the moment.”
Kapur’s company, which makes steering systems for Maruti Suzuki, started as a first joint venture company with the then Maruti Udyog Ltd with Rs.7 crore revenue in the first year of its operations. It employed 25 people then. Today, Kapur’s firm has annual sales of Rs.4,300 crore with 7,500 people across the globe.
“More than quantity, what we learnt during the process of producing Maruti was world-class quality. It not only introduced systems such as TQM (total quality management), etc., but also made us focus on localization and upgradation of machinery, etc.,” Kapur said.
Some of the other auto component firms that grew with Maruti are Lumax Industries Ltd, the Anand group and Krishna Maruti Ltd.
There is an interesting story behind Suzuki coming on board. After the death of Sanjay Gandhi, Maruti was nationalized and its top executives visited Europe and zeroed in on Renault 18, an 1,800cc car, only to realize later that it may not be viable for Indian market as it was not small. After being rejected by European companies, a Maruti executive sent a letter to Japanese manufacturers. Suzuki, too, was sent a letter but by mistake it was addressed to the engineering division and not the marketing division.
“We met the engineering guys in 1981 but they were not so interested,” said R.C. Bhargava, chairman of Maruti Suzuki India.
It was only in 1982 when a Suzuki board member was visiting India and he read news articles regarding Maruti tying up with Daihatsu Motor Co., another Japanese firm, for the small-car project.
“He wrote back to Suzuki saying such a big project is happening in India and how come we have no knowledge of it?” Bhargava recalled. “Then, things moved very swiftly with Osamu Suzuki taking personal interest in the project.”
In 1982, Indian government signed a joint venture with Maruti Udyog and the course of India’s automobile industry was changed forever.
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