India is set to become a prominent automotive exporter globally, majorly owing thanks to the advantage of automotive technology. Supported by the initiatives taken by the Indian government, such as the Automotive Mission Plan 2026 and the PLI scheme, automobile manufacturers could well make India a global leader soon, using this momentum to infuse the paradigms with more innovation in automobiles. Currently, India is ahead of Japan in automobile manufacturing but behind China and the US.

However, the roots of this revolution originally date back to the early 1980s, when Maruti came into existence in India. The story of Maruti Suzuki, India's most recognizable and distinguished automaker, is also the story of RC Bhargava, who made Maruti a preferred brand in the Indian auto market for its commitment to affordability, quality, and functionality. Let's look into his management approach and business tactics over the decades. 

RC Bhargava, the CEO of Maruti Suzuki

After 25 years in the Indian Administrative Service, Bhargava joined Maruti Udyog Limited in 1981. Within a decade, he was elevated to the position of chairman and chief executive officer of Maruti and was appointed non-executive chairman after retiring in December 2007. It's hardly surprising that he was awarded the Padma Bhushan in 2016. Bhargava currently resides in Noida, Uttar Pradesh, with his spouse.

Business Strategy and Growth 

His life itself is a guideline for leaders in the manufacturing industry. Bhargava believes that the automaker's triumphs must be replicated in other sectors. Knowing his leadership traits takes a bit of rewinding. 

The launch of Suzuki's first car, the Maruti 800, coincided with the launch of its Asian bestseller pick-up truck Carry (called Pickup in India). The company anticipated it to account for at least 20 percent of the production. But it couldn't keep up with the much more affordable diesel alternatives. Bhargava calls it a serious error of judgment in his 2013 book The Maruti Story: How a Public Sector Company Put India on Wheels. Maruti was reminded of the importance of correctly assessing the behavior of Indian customers and the dangers of transferring experience from other countries to India.

Bhargava's memory of that lesson may be why he's been so skeptical about jumping on the electric vehicle bandwagon as soon as it's out there. He always knew that India problems require India solutions. It is very different from the markets in Europe, America or Japan. Instead of copy-pasting what works in the West, he always thought we must devise our own decarbonization strategies.

Joint Venture with the Indian Government

Following Bhargava's principles has been one of the reasons why Maruti Suzuki has dominated India's automobile space since its inception in 1983—first as a joint venture between the Indian government and Suzuki Motor Corporation (SMC) and then as a subsidiary of Suzuki after the government divested its stake in 2003. For decades, it has boasted an unprecedented—some would say unnatural—market share of over half, making India Suzuki's single-largest market globally, even surpassing its home market, Japan. In the first nine months of FY22, Maruti contributed nearly 55 percent to the sales volume.

Currently, the company intends to draw on its existing cash reserves of Rs 45,000 crore to achieve a cumulative production of 4 million vehicles by the end of the fiscal year 2021-2031. It is embarking on its third expansion phase and aims to add a production capacity of two million additional cars within the next eight years.

“Trust in the private sector is the way to go for India in its quest for the next level of economic growth. The way forward for India on the road to growth and development is to rely on the private sector,” says Bhargava. 

Maruti Suzuki, the country's largest carmaker, has a strategy for reinventing itself, with Bharat and India being the two main ingredients. On the other hand, the company is obligated to serve its core customer base, the entry-level car buyer. The high-margin SUV segment, which has almost doubled in the past five years, is a tough sell. According to Bhargava, the only way forward is to address the transportation needs of both segments.

 

“The government heavily taxes the auto industry and vehicles, slowing down growth. Our system of issuing driving licenses is very sloppy, and our roads need to be scientifically designed with better markings and road signs. The problem with some of our policies and plans is that the people who make them lack domain knowledge. They lack the expertise, and many are unaware of the latest technologies and best manufacturing and management practices. We are a unique country with a huge variety, and we cannot just pick up policies or rules from other countries and adopt them here. We need to tailor-make policies that suit us, and our special requirements have to be factored in".

Carbon Emission Reduction 

“The per capita income in a country like India pales in comparison to those in Europe and the United States. Coal is the main power source. The carbon content of the air won't be reduced by manufacturing and electricity usage. The carbon emissions from vehicles must be reduced by alternative technologies like compressed natural gas, bio-CNG, ethanol, and hybrid vehicles,” says the chairman of Maruti Suzuki RC Bhargava.

Suzuki has been a supporter of CNG and hybrid cars for a long time. The company is not planning to launch an electric car before 2025 and has been slow to electrify. The five percent annual income of Indians is less than that of Europeans and three percent of Americans, making it more affordable for individuals to travel on their own in India. That is why more Indians prefer scooters and motorcycles to cars and small cars to cars. An electric car costs more than a gas-powered one. If the country goes to electric cars, more people will be unable to upgrade from two-wheelers to cars.

R.C. Bhargava is 88 years old, but he's still very busy and has one of the sharpest minds in the world. He's got the courage and character to speak up, even if he doesn't agree with the authorities. He's a "lone ranger" in the Indian auto industry, with a lot of knowledge and experience, but also for being open and honest. Others in their field will open up and share their thoughts without hesitation. We need more courageous visionaries and business leaders like R.C. Bhargava.