India has unlimited potential in expanding its car market, says RC Bhargava
Maruti Suzuki Chairman RC Bhargava said that India has developed two very distinct market segments. One is the old market of the Maruti era and the other one is as sophisticated and affluent as any market anywhere in the world. To bridge the gap between the last 40 years and the future 40 years, he believes, the company has to cater to both the markets.
Forty years ago in August, the Union cabinet gave a green signal to the proposal mooted by the Maruti Udyog, then governed by the Indian government. It was set up to manufacture small size cars in collaboration with Japanese auto giant Suzuki. After four decades, the company now exports 6 lakh cars annually to more than a 100 countries.
“At that time, there were only voices of gloom and doom about the future of Maruti,” said R C Bhargava, Chairman of Maruti Suzuki. He added that when he had to take a decision to leave IAS and join Maruti, people told him to ‘not be a fool’.
According to him, at the inception, even Suzuki suggested starting with 40,000 cars. But surprisingly the company has ended up running out of capacity as the years went by. In terms of low-cost manufacturing and customer focus there were a lot of learnings from Suzuki, Bhargava said.
He said that India has developed into two very distinct market segments. One is the old market of the Maruti era and the other one is as sophisticated and affluent as any market anywhere in the world. To bridge the gap between the last 40 years and the future 40 years, he believes, the company has to cater to both the markets.
He said Suzuki did a wise thing by training the managers of the company and exposing them to the Japanese system, unlike other companies which were doomed due to their adoption of western systems.
While commenting on India’s automobile future, Bhargava said, “I think we have almost unlimited potential going ahead in expanding the car market.” He thinks that the domestic market must grow much faster. If India's production volume reaches 10 million cars at a growth of 10 percent, the global market will offer large export opportunities.
Talking about Electric Vehicles (EV), he said that initially it will cater to the elite and the European-style markets. At current prices, India’s mass market will not be able to afford them. According to him, there are little chances that prices will come down.
The partnership with Toyota gave Maruti access to a number of new technologies such as hybrid technology, which is capable of bringing down fuel by 35-40 percent, he said, adding that it could also cater to the entire range of the market.
Watch video for the entire interview
Also Read: Overdrive takes a look at M&M's EV concepts and test rides the newly launched Hyundai Tucson
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