Maruti Suzuki, General Motors and the auto wars in India
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As General Motors Co. (GM) all but withdraws from India, I still vividly remember the day a quarter of a century ago when the iconic US carmaker launched its India operations.
Back then, I was divisional manager of the sales and marketing function at Maruti, which was still called Maruti Udyog Ltd. In effect, that was the infantry division that had an 82.6% territory (our market share) to defend.
To make matters even more interesting, it wasn’t just GM we had to contend with; the auto wars in India had begun. GM, Ford Motor Co., Daewoo Motor Co., Hyundai Motor Co., Tata Motors Ltd, all were launching cars in quick succession. There was going to be blood on the streets.
GM worried us. It had lots of resources, and even more experts (and expats). We weren’t exactly meek, but it was enough to almost overwhelm us.
But we were also very excited.
The Maruti Udyog executive committee would meet every Tuesday morning, and I recall some of our spirited debates on ways to tackle the behemoth. We were nervous, confident, afraid, excited—and all at once. The “barbarians” were at the gates and we had nothing (well almost) to fight them with.
Maruti was then a 50:50 joint venture between the Indian government and Suzuki Motor Co., and the two partners were engaged in a very public and very acrimonious fight for control. That made sure we had no new howitzers to roll into battle.
What the defenders certainly had to fight was chutzpah. Oh, we knew that word alright. On the day GM launched, we were all over their showrooms in our grey Maruti Udyog uniforms; under, over, below, inside their cars, inside their heads. We collected sales material, market pitches, and insights shamelessly. The GM dealers and the company’s own executives stood around, mouths agape (Hyundai got the same treatment). On that very day, we tore apart GM’s marketing material, specifications and claims—to divine openings to drive our cars through. Meanwhile, their cars were soon being torn apart, bolt by nut, neatly labelled and nailed onto the walls of our product development lab.
The team closed ranks. I remember a Zen-like sense of calm and purpose, although I am sure it must have been frenetic then. Day after day, we studied them closely, building dossiers, mapped their minds, and then did what we had to. Apart from our production people, all mid-level and senior managers were out meeting dealers and customers—and the generals were leading from the trenches.
It also meant managing potentially large defections, both on the supply side and the market access side, appealing to 400 plus suppliers and 250 plus dealer owners, both communities with deep investments, to keep the faith till the storm blew over.
Interestingly, the approach was long-term even though the threat was immediate. The emphasis was on high quality and accessible service, and low cost of ownership. We shot an advertisement in Ladakh that went viral (or whatever the equivalent was in those days). It was about finding no fuel station, or dhaba, no hotel, in a remote corner of the region, but finding a Maruti service centre.
It was really there, I kid you not.
The strategy was to religiously narrow down to a consumer benefit paradigm instead of just features and staying the course on sharp attention to quality in product and process. Maruti had, and still has, a serious case of obsessive compulsive disorder when it came to cost, quality, planning and execution.
We didn’t realize then how long it would take. It now emerges that it’s taken 25 years for Alexander’s forces to publicly acknowledge that they were happier in Greece. Maybe GM made a mistake in starting from the top of the pyramid and then trying to work its way down. We thought as much when the company launched its first car.
Maruti was built on a solid foundation, a strong product and exceptional customer service, delivered by a company with a very unique and disciplined Indo-Japanese culture.
Maruti was a real “Make in India” story that started thirty-five years ago; GM was a “Transplant In India” story.
To be fair, while Maruti must take a lot of the credit, some part of the credit must go to acts of omission at GM. But that is another story, a long one.
Today, Maruti continues to dominate the Indian market. Better still, its executives, some of whom worked with me, are sprinkled all over the industry at senior levels—like it always happens with the best organizations. What Hindustan Unilever Ltd is to the consumer packaged goods business, the erstwhile Maruti Udyog (now Maruti Suzuki) was to the automotive business.
I just can’t resist this one. If the pundits then were to ingest the oh-so-gray Maruti obituaries of the time, I forecast extreme indigestion!
Rohtash Mal is the founder chairman of EM3 Agriservices, an Uber equivalent in agriculture.