The latest numbers on car sales threw up one clear winner in India’s three-million-strong passenger vehicle market. Sales at Maruti Suzuki India Ltd, India’s largest car maker, grew 12.1% in December even as even as Hyundai Motor India Ltd, its nearest rival, posted flat sales.

Maruti continuing success is truly mind boggling. The company has a market share over 50% in one of the world’s fastest growing market populated by the biggest names in the business. The company has defied the global law of the automobile industry, that large multinationals eventually always dominate markets. In a highly consolidated business, a handful of major corporations own nearly all of the world’s major car brands.

Thus, in Brazil, Fiat Chrysler Automobiles leads the market with 18% share followed by General Motors (GM) and Volkswagen. In Russia, Renault Nissan is the clear market leader with 33.5% share followed by Volkswagen. Local car maker Gorkovsky Avtomobilny Zavod (GAZ) has only a 3.9% share. The South African market is also dominated by Volkswagen Toyota.

Even more fascinating is the 30 million-unit-strong Chinese car market, the largest in the world, which is dominated by foreign brands in joint ventures with local companies. EIU estimates show that these JVs are the ten largest automobile manufacturers in the Chinese market. Volkswagen which has JVs with SAIC and First Automobile Works (FAW), leads the market with sales of four million vehicles followed by GM, which through its 10 JVs sold 3.8m vehicles in the Chinese market in 2016.

No major emerging market has a home-grown leader not even when as in the case of Lada in Russia or the Proton in Malaysia or the Yugoslav Yugo, the government itself threw its weight behind them. Eventually the economies of scale in sourcing components and the benefits of having a large installed base rule out small emerging players, no matter what their pedigree.

There is no better example of this than the Malaysian National Car Project which was conceived in 1979 by the country’s then prime minister Mahathir Mohamad and formally incorporated as Proton (Perusahaan Otomobil Nasional Berhad) in 1983. Mahathir backed the project calling it “a symbol of Malaysians as a dignified people" and for years the state provided generous funding besides making efforts to take it to the US market. Despite initial success (by 1986 Proton had a 64% share of the domestic market for cars below 1,600cc) the project soon turned into a white elephant and was losing millions of dollars when it was sold to Chinese auto maker Geely Holding Group Co. last year.

Just how did Maruti Suzuki manage to avoid this fate? At its inception in the early 1980s as Sanjay Gandhi’s pet project, Maruti received preferential treatment including access to scarce capital, easier capacity constraints and indigenization levels and most important, protection from competition. By the time the market was opened to competition from abroad, it had found its feet.

The company is now controlled by Suzuki Motor Corp. but it was a resounding success even before 2013 when the Japanese company raised its stake to 56%. Indeed, the tussle over the stake hike was a reflection of the company’s strong financials.

Over the years the company has taken advantage of economies of scale. The cost-efficient production model all companies covet is optimal only when a plant is operating at high capacity utilization levels. As growth rates have slowed, multinationals like GM and Ford have found their small market shares making manufacturing unviable. GM announced its decision to pull out of the country last while Ford has been a laggard. Maruti with its multiple products at virtually every price point has been the clear gainer from the failures of these global giants. It is really a case off going from strength to strength though how it handles the coming challenge of electric vehicles could test its mettle.

Maruti’s success also leads to the piquant question, one that First Global’s Shankar Sharma has been raising persistently. Is early-stage protectionism a pre-requisite for creating national champions? In a series of tweets last November he pointed to the success of companies like Bharti Airtel as well as Indian private banks as the “Best example of what protection can deliver: highly restricted foreign competition, easy access to capital. Huge domestic market. Result: highest profitability in the world. Global size market caps".

It is a reflection of how far India has travelled down the liberalization road that his views are considered contrarian in today’s market.