Only in India does a Peoples’ Car turn into a status symbol. Where else in the world would a midget of a car like a Maruti be commonly chauffeur-driven?
In the beginning was the Ambassador. And for several generations of Indians it seemed as though this venerable model would be the end too. If there are finally intimations of mortality for these “period-cars-in production”, Indians must raise a hallelujah to the Gandhi brothers — Rajiv and Sanjay. Glory be to the bungling of these exemplars of baba log. For it gave deliverance from the tyranny of crony socialism, the flagship of which was the 1952 Morris Cowley aka the Ambassador.ran
It was Sanjay who floated the idea of a people’s car. Something in the nature of Hitler’s Volkswagen. Of course, Sanjay never had Hitler’s luck —either with fascism or with the people’s car. His role in bringing forth a new car for the volks of India was limited to naming it Maruti, the Hindu god of wind (incidentally, Sanjay named his son, his other production, after the god of waters—Varun). While he was alive, Maruti never produced anything worth mentioning except road-rollers and armour-plated Ambassador cars. The latter moved so ponderously that some VIP customers thought they were better off ordering the former. The god of wind would definitely not have been pleased.
Things changed in 1980 after the Gandhi brothers’ other great passion, flying, abruptly ended Sanjay’s life as he crash-landed into a dhobi ghat in the heart of Delhi. Elder brother Rajiv, then a pilot with Indian Airlines, was quickly grounded by mummy and prime minister, Indira Gandhi. Sycophants of the grieving Mrs. Gandhi dotted the landscape with hospitals and other public institutions to the memory of the fallen “Son-of-India”. They also revived his pet project Maruti by bringing in the Japanese Suzuki. Along with Honda, another motorcycle manufacturer, Suzuki had carved a niche for itself in small, fuel-efficient cars, which were giving the Detroit gas guzzlers a run for their money in the world market. It was the time of the Saudi Arabian negotiator Sheikh Yamani, the evil genius behind OPEC, and the unseemly fuss about fossil fuels.
To say that the three-cylinder, 800 cc Maruti was a hit would be understating the case. Those who did not wangle quotas from the public sector company through the bhai-bhai network fought each other in serpentine registration queues. Premiums were about half the cost of the vehicle and resale value better than 100 percent. The all-too-plebian Maruti was in India a status symbol and to own one a statement of arrival — either through the bureaucratic route or the premium-paying one. India then must have been the only country where such a midget of a car was commonly chauffeurdriven to testify to the clout of its owners.
Who said anything about a people’s car? In the beginning, the Japanese insistence on quality meant that parts could not be turned out at the blacksmith’s but had to be imported at considerable cost. A customer who required a new door panel discovered that it would cost a fourth of the price of the car. Maruti did not entertain his plea that they keep all four doors and let him have a car free. Clearly, something more drastically damaging had to happen to the Soviet-style, closed economy before the car owners of India got a respite.
Maruti itself contributed to that change by helping to deplete foreign exchange reserves. But it was left to Rajiv Gandhi, who took over as prime minister following Mrs. Gandhi’s assassination in 1984, to ensure a wide enough hole in the balance of payments position for a once-proud India to beat it to the portals of the World Bank, begging bowl in hand. In his five years as prime minister, Rajiv Gandhi went on a shopping spree, the like of which has never been seen in independent India—German HDW submarines, British Westland helicopters, Jaguar fighters, French Mirages, and yes, the notorious Swedish Bofors howitzers. By the time, Rajiv lost the elections in 1989 he had all but demolished India’s ‘planned’ economy, and the World Bank was already scripting India’s annual budget. The stage was finally set to crack open the almost-virgin Indian automotive market.
That meant that the makers of the clunky Ambassador and its long-time rival the Fiat Delite, both spoiled rotten by a monopoly market, had kto change their ways or perish. So they upgraded, but not enough to meet anything like the attributes proclaimed on stickers that Indian motorists so touchingly stuck on their Ambassadors and Fiats —”16 valve”, “fuel injection” and even “six cylinder”. Upgradation for the Birlas meant bringing in a ponderous Vauxhall, fitting it with the Ambassador’s aging 1400cc engine, and grandly calling it the Contessa. The car floundered like a beached whale. Finally, under threat of official action, the Birlas transplanted into it a petrol-guzzling 1800cc Isuzu motor. What this meant was that politicians and bureaucrats who would not be seen dead in anything other than a white Ambassador (first popularised by Indira Gandhi) had something faster and sleeker to move in and still be politically correct.
The foreign antecedents of both the Ambassador and the Contessa were too historically remote for members of the unsuspecting, unex-posed Indian public to get wise to the fact that this was not the “indigenous technology” they proudly thought it was. Neither model was in production anywhere else in the world —nor could be. But with liberalisation now well underway, and the Gandhis history, politicians are beginning to gain the courage to order sleek Mitsubishis, also from the stables of Birla’s Hindustan Motors.
Premier Automobiles finally upgraded from the Fiat Delite to the well-known 124 model from the mid-1960s, which had had a successful run in Eastern Europe as the Lada. But it chose to underpower the car with a small Isuzu engine and dispensed with pesky details like corrosion-proofing, so that Fiat was soon disassociating itself from the rust-bucket it turned out. Premier also had problems with the French Peugeot and had to drop its 306 version after a brief production run of a model regarded as ideal for Indian road conditions.
If HM and Premier Automobiles were notoriously economical about quality, soon enough the upstart Maruti was beginning to learn lessons from them rather than the other way around. Once sticklers for quality, the subsequent arrival of the sleek Koreans (Hyundai and Daewoo), the Germans (Astra) and the Americans (Ford), showed up the Japanese as having slyly employed an Indian trick or two. And having acquired controlling interest in Maruti, they could no longer lay blame on the Indian public sector sloth.
Maruti’s strong point in a rapidly changing market can be said to be its national network of dealers and service centres. But as the focus shifts to quality and the price of imported spares drop, its network of wheeler dealers, out to make a killing through unscrupulous practices and by cutting corners on service, are proving to be Maruti’s doom. Many of them have Japanese mottos displayed on their walls but provide service that is often worse than that offered by roadside mechanics. Little wonder then that in 1998-99, Maruti’s market share dropped from 80 percent to 62 percent, and now it is thought to hover around 50 percent. If the Maruti still sold 397,586 units in 1999 as against 326,523 in the previous year, it was more a testimony to the robustness of the market than anything else.
However, the management’s worries are more than abundantly clear in the across-the-board slashing of prices of its products. The sticker for the bread-and-butter 800cc car has been slashed by INR 10,000 to 23,000, depending on the version. Prices have also gone down for the Wagon-R because of stiff competition from Hyundai’s Santro and Tata’s Indica, and the Omni 800cc microvan has also become cheaper. The asking for the 1.3 litre Esteem has similarly been pegged down by around INR 50,000, while upgrading it to Euro II emission standards following a Supreme Court order in force from April.
The reduced price has kept the Esteem in the reckoning, but only just. Its once soughtfter aerodynamic ‘wedge’ design is getting a little long in the tooth. In the beginning, about a decade ago, the Esteem sputtered around as a grossly underpowered, if fuel-efficient, lOOOcc version. The Japanese moved it through a car-buretted 1300cc version before finally installing fuel-injection and a new multi-valve head. In other words, the Japanese were caught adopting the Indian trick of not selling the best until forced to by competition and by court order. Recently, Maruti announced multi-valve heads for its 800 and for the Zen (exported as the Alto), literally breathing life into these aging models. To take on the Santro, the company has brought in the Wagon-R, claimed to be the best-selling vehicle in Japan.
Claiming second place to Maruti overall is the South Korean Hyundai, which last year, sold 75,895 units mainly on the strength of its three-year warranty — seen as a convincing show of confidence in the quality of its own products.Hyundai has positioned itself well with the midsize Accent for those with larger disposable income. Its cheaper, “tall-boy” Santro is poised to overtake every other model in the market for sheer popularity, even Maruti’s 800cc mini. To make things worse for Maruti, the small car segment that it monopolised for more than a decade is under assault from the formidable Indian house of Tata, with its Italian-designed 1400cc Indica. Another Korean entrant, Daewoo, is also in the fray with its Matiz, one of the most popular small cars in the world today. Daewoo also makes the Cielo and Nexia, reckoned to be good value for money for those looking for mid-sizers. Obviously the Indian car-buyer is beginning to get spoiled for choice.
No account of the Indian automobile scene would be complete without mentioning the popularity of “oil-burners”, which are in high demand thanks to the heavy cross-subsidy on diesel. Fiat’s popularity in India today rests largely on the diesels it has in its Uno and Siena models. And Peugeot has a ghost of a presence in the country by providing diesel engines for a version of Maruti’s Zen. Diesels are especially popular in the rugged multi-utility vehicles (MUV) category where the Tatas reign supreme with their Sumo, Sierra and the sleek 4×4 Safari. But the Japanese Toyota, a relatively new entrant into the market, is already making a dent in the MPV segment with the increasingly popular Qualis. Together, the Tatas and Toyota are giving nightmares to Maruti’s well-established, gasoline-driven offroader, the Gypsy, which now comes with an 82 bhp multivalve, MPFI power plant. And of course, diesels power the Mercedes E220 turbo-diesel, which allows some of India’s richest men and perhaps in the world as well, to drive around on subsidised fuel.
The real competition for Maruti, however, is in the premium (by Indian standards) segment, where big names like the Opel Astra and Honda City have already edged out the Ford Escort from the 1.6-litre turf. Ford tried out the trick of an underpowered initial model, but could not redeem itself with a multi-valve upgradation. The Astra seems to have fallen into a similar predicament. Clearly, buyers are more discerning and less forgiving in this rarefied zone where details count. The entry of the Mitsubishi Lancer by Hindustan Motors and Suzuki’s Baleno, both sporting a range of internationally standard features to which the postliberalisation Indian is getting used to, foretells a shakeout in the “executive” sector where prices hover around a. stratospheric one million rupees. Here, at last, are cars that could do with some chauffeurs.