Maruti Suzuki won over India’s car market with Japanese innovation
classic.qz.com
classic.qz.com
I drive 60 km a day total, and have been doing so for past 12 years, commuting to work.
I keep meticulous record of my costs,and the average maintenance for the car comes to around .55 Rupees per km. Less than 1 US cent.
Their cars have a reputation of being reliable and their spares are cheap.
Truly a remarkable success story in India.
So battery costs about 4000 and lasts around 4 years. So I drive 60km, 6 days a week, say 45 weeks. So thats about .06 Rs per km.
Tyres last about 70k km, and cost 18k to change all 4, so thats another .25 Rupees per km.
So total cost is about .8 Rupees per km, including battery and tyres.
Or about 1 US cents per km.
That doesn't mean a VW in India is made to the same standards as it is in Europe, either. What's the best out?
A car being made entirely out of a strong material does not necessarily make it safe, either. Modern vehicles with good safety ratings are made out of many different types of material of various strengths in different locations. https://www.media.volvocars.com/global/en-gb/media/photos/34...
Like any engineering project, design is more important than materials used.
https://old.reddit.com/r/india/comments/jd7x93/kia_seltos_an...
The discriminatory quality of International brands for their products in India has been the norm since globalisation started in the country, be it Colgate toothpaste or Ford Fiesta, most of it boils down to manufacturer building locally what the market is willing to pay.
The opposite is true as well, our export products from fruits to vehicles are of superior quality than what is available for local consumers. Again , it's w.r.t what the market is willing to pay.
I regret that the safety standards on vehicles in the country are appalling, at-least things started to change last year with Tata & Mahindra cars getting good ratings in GLOBAL NCAP[1] for the first time. I hope the COVID impact on the automobile sector, doesn't revert the progress.
I presume this is the case with all the developing economies.
You do get top notch, safe vehicles as well, it is just that most Indians dont consider the marginal safety worth the price.
In practice, the waiting period for any variant with safety features other than the top speced would be "over 6 months, no gaurentees". ie: as a customer, I was forced to buy the top end variant -- with alloy wheels, chrome trim and all sorts of other crap which I did not care about because I wanted the safety features.
I think that maruti is using safety features as a way to upsell customers who care about safety. The difference isn't a "marginal cost". For some models, the difference is 30% the cost of the car.
Coincidently, my ancestors lived in tea plantation estates, worked under British longer than most of my country men until the estates were bought by the Tatas and Birlas.
So here are my two cents for good tea in India - You can get good tea in plantation estates at almost any outlet, but obviously great tea like anything else is of export quality and it's fairly easy to get if you know the right person in the tea factory at the estate. Fun fact, no tea sold in the market is 100% just tea, they are the mix of tea and lot of other stuff which shall remain unknown to enjoy a good cup of tea.
Many car makers also do full imports and CKD units for some their lines in India.
If safety is your primary concern I would recommend a fully imported Volvo, while they don't have the Honda, ford or Suzuki kind of service depth , most major cities do have one. Parts occasionally need to be imported. While it may cost a bit more money and time, there is no hassle of paperwork for you.
If reliability is the primary decision point, there are plenty of choices depending on how much city/Highway/rural you want to do, also depends on size, power etc
You'll be able to milk rich if there are more mercedes on road, they'll need more repairmen or mechanics, you can be one and charge them for everything.
Right now in India, ultra rich proportionally pay less taxes because of various instruments available to them which aren't feasible to be used by middle class people.
We should shift our focus and let them spend their money, it will end up in one of the countrymen's pocket either way.
In fact, in many ways India can already be said to have UPI. "Farmers" (verified or not, typically rural) have free electricity, fertilizer subsidy, regular loan waivers, ... which were instituted as compensation for a broken market that benefit political cronyism.
This also has the 'benefit' of laundering bribes, without taxes - indeed, a joke about the family of previous Chief Minister of Karnataka (capital: Bengaluru) was that they grew gold in their farms!
Excise on petroleum import affects nearly everyone. I am not only talking about income tax.
Other than this, the soap or detergent or even everyday products we use, contain imported active ingredients and they are taxed at some duty which brings up its price, manufacturer simply adds their own profit margin on top of their costs and passed it onto customers.
Even if most in India have never made payment to customs department, they've still paid considerable sum as indirect duty charged included into product pricing.
If you can just show it to people how much cheaper things will get, they'll give you a chance. This is because Indian voter is very unsophisticated, he will buy your promise atleast once to see if you can really help them by reducing prices.
2 issues.
As stated in another comment, most of the income taxes / import taxes etc affect a tiny fraction of the population. Not really a huge voter base there. Influential and disproportionately powerful - but not enough to swing elections I think.
Also these taxes fund a huge number of programs that will need to be cut down or cancelled which will affect a lot of people (who don't necessarily make enough to pay income taxes). Not really something that any government can do in good conscience if they want to hold power.
How can this be true? Nearly everyone needs petrol or diesel or gas, and government has increased exise duty on petroleum import which affects almost everyone in the country!
And custom duties also affect others, today if you go to buy a tool - you'll either find Chinese import or some very expensive foreign make tool or crap Indian make tool in most of the case. People need those tools, they'll benefit from low import duties.
Yes but most people aren't aware how taxes affect them even if they aren't directly paying any custom duty or income tax, custom duty is being charged to them indirectly (they pay for a product where the importer adjusts the price according to costs of which custom duty is a part)
Also the prices of fuel directly affects only vehicle owners who are tiny part of the population. It affects everyone else a lot only indirectly, so people don't really complain.
Most traffic in India is very speed limited, there is no snow or ice in most parts of India.
Many of the safety concerns are perhaps overblown given the very different driving scenario. A bigger problem would be your actual driving skills, unless you take the national highways regularly travelling long distances.
I once took a cab from DEL to Gurgaon. The driver drove up an offramp of the (then) NH-8, along the shoulder against the flow of incoming traffic, and then exited via an onramp. And then they were surprised that I didn't tip them despite this efficient shortcut.
(It may be apocryphal, but fun story/business lesson (think that's where I heard it) regardless. Edit if I find it.)
I was once a passenger in a car going fairly fast on a two lane autobahn. A Trabant [1] in front started trying to overtake a truck at the same time that a Porsche 911 doing probably 250km/h was coming up behind us. Nobody hit anything else but it came fairly close.
And fewer than they would probably cause themselves if transplanted directly in to the other system because of their mismatched expectations!
https://en.wikipedia.org/wiki/List_of_electric_cars_currentl...
It is hard to quantify how big a leap Maruti was in the 80s and early 90s for the Indian middle class.
The reliability jump from a Fiat rebadged as a Premier Padmini("If there's no oil under it, there's no oil in it") to a Maruti 800 was world changing. The Ambassador was reliable, but maintenance heavy & the Contessa was ridiculously expensive to maintain. Plus they were the first cars to come out with the "normal stick shift" with synchromesh instead of the steering shift bar which required way more delicate balancing of the throttle.
Also the service center distribution along with the dead simple 3-cylinder configuration meant that every bike or truck mechanic had enough tools to "fix it up" to drive to the nearest service station. And the parts were cheap because everyone bought one (the monsoon season was different from a car, than a rain-coat on a bajaj).
The entirety of the scenes playing around me those years was literally identical - went from Bajaj Chetak to a Maruti 800, then an additional Kinetic Honda for the wife and the kids buying a Scooty or a Pulsar.
My girlfriend's mother even bought one for herself after I recommended the same diving instructor.
I had the car for a few months after a hurricane ripped us a new one, smashing the rear glass of the car in the process. The island was shut down for the outside world for weeks and it wasn't for months until a replacement glass could be import from the Suzuki dealership. Being that is was a flat glass I simply cut a big piece of plexiglass and used that for the time being. The rear hatch was also big enough to fit a sizable generator I needed to pickup that could not fit in my family's Corolla or Sentra.
The 3 cylinder engine surprisingly had enough power to climb 45-50 degree hills(needed when your island is all hills), albeit slowly.
Maruti was the company that pioneered putting cars on a trailer and shipping them over to wherever. Even today, those trailers are called Maruti Car Carriers.
Too few cars to be shipped to a huge country, makes sense to drive them.
[1] https://gaadiwaadi.com/maruti-suzuki-will-not-send-its-cars-...
Having ridden my fair share in old Transporters, I grabbed hold of the door handle and pulled, putting my body weight behind it to get the door going - and the door came flying along the rail, slamming shut with the sound of the lid being put on a shoe box, more or less.
It was, ahem, of a considerably more material efficient construction than the sliding doors on a Transporter.
When I rode in one, I wasn't expecting much - since the car I was used to was a Maruti 800.
But the Omni was terrifying, like one notch above an auto-rickshaw.
Tata and Mahindra's cars are increasingly top-of the pack when it comes to safety; very likely that if this continues, the Japanese car makers will enjoy the same fate as the Japanese bike makers.
Lessons gained and practices established for supply chain management for Nano, must have reaped a lot of benefits for Tata.
On a side note, perhaps the Nano would have been more popular if it had been marketed as the "cuter second car" angle, rather than "cheapest car"
Maruti was a company started by Sanjay Gandhi, son of India's most politically powerful and corrupt Nehru-Gandhi family. He was known as ruthless and especially known for forced sterilization of poor people including college kids. He died mysteriously in a plane accident.
Maruti was a failed venture which was then conveniently sold to Indian government. Since India simply did not know how to make a proper car they basically used Suzuki's technology. I remember some early folks talking about how Indian government offered them a raw deal but Suzuki took it nevertheless partly out of charity/experimentation. This bet played out very big.
India at that time had banned import of foreign cars and the available ones in India were complete shit (Fiat Premier Padmini and Ambassador). Various politicians connected to the family then got dealerships across different states. Usual red tape of socialism was not applicable as this was the deals among friends. Rich and corrupt politicians selling cars to their other rich friends.
Suzuki however continued to focus on solid engineering and simple products. Before you knew it Maruti 800 had become a status symbol. Some of my relatives worked for a steel company (of course government owned) as officers. To boost the sales of the car, Indian government would offer a "car allowance" to these officers and offer to pay 80% of the car's cost. Every officer bought this car even though they did not need it and sold the tires and other spare parts to recover the 20% of the cost.
I belonged to a tiny state called Goa, which was a Portuguese colony until 1961, they had free trade with rest of the world and growing up I could see all sort of fancy cars from BMWs to Beetles to Porsches. When I left goa and reached Mumbai I simply could not understand why folks in Mumbai would not buy BMWs or Mercs.
It is a classic tale of nepotism, corruption and delayed growth of a poor country. Suzuki however deserves kudos and a million thanks for Indian people. They could have easily chosen to just act like rent seekers by delivering bad cars but they did not.
It's so bad that while traveling in India, I've seen electrical lines burning multiple times.
Also, India lacks its own energy sources and huge solar energy project was stopped by USA/WTO (because they were unhappy that India doesn't buy expensive solar panels from USA companies).
The infra is bad in the rural areas and the quality of infra varies greatly by the state.
I was working remotely so I needed reliable electricity and Internet. I had problems with both in every city I visited (and I visited many, from New Delhi to Kanyakumari.
Also, while traveling between cities on my motorcycle, I frequently saw powerlines burning or electrical poles burning in rural areas. Something I've never ever seen in any other country.
Only in Nepal the situation with both is worse.
Infrastructure sure is not well done but the electricity bit is not true at least from what I have seen.
If you are in a city like New Delhi/Mumbai, most homes/hotels do have reliable power. For rare cuts most have power through power backups.
If you visit remote places, it is definitely worse. They have electrified a lot of places, but power is absent most of the times in the day. Some people rely on solar powered batteries for basic electrification at night. I have never seen a powerline burning though.
In cities there are internet providers which do better than others, so it might have been your luck with some bad provider; but they are not even present in remote places.
LTE based mobile internet has coverage problem in cities with pockets that get bad coverage, otherwise the provider 'Airtel' that I have used while traveling does seem to perform well in cities. Remote places have no coverage from LTE providers as well.
The only exception to this is Mumbai.
Well, depends on the Metro. Chennai is notorious for power cuts. Delhi is supposed to be better - but I used to live in Noida (Part of NCR, but technically UP and not Delhi) and the power cuts were ridiculous - around 60-90 minutes without power every day (I was fortunate enough to have backup power where I stayed).
My small hometown that was approx 25km outside Cochin in Kerala had far more reliable power supply. The point I'm trying to make - power supply varies greatly, and being a "tier 1 metro" does not always mean more reliable power than some obscure town you've never heard of.
Not true in most tier 1,2 & 3 cities.
Somewhat true in rest of India.
However, lack of an existing electricity infra, in my book counts as an opportunity to establish micro-grids and smaller storage based grids powered off renewable energy, especially solar.
E.g. Germany lacks both the necessary power and infrastructure. And I'm almost sure that German electrical infrastructure is in much better shape compared to Indian.
Renewable energy require several times bigger and expensive infrastructure costs because of unstable generation.
Do you have a source for that because it sounds doubtful to me.
India does not have a free market for gas stations and as a consequence there is always a shortage and you will see huge lines to fill up gas. A large number of drivers live in slums which may not even have proper electricity so they can't charge it at home. Most buildings are not designed to have electric chargers as we do not have a concept of "parking spot". We park wherever the car fits.
What do you mean? There are multiple suppliers and gas stations are owned by private entities.
> there is always a shortage and you will see huge lines to fill up gas
Been driving for over 15 years, all over the country. Never have I seen shortages as you mention.
>A large number of drivers live in slums which may not even have proper electricity so they can't charge it at home
The target market for Ev's, at-least for now, is the middle class office commuting people. As for drivers unable to charge their cars at home, they could park it in charging stations. Even now, drivers park their cars far away from their homes, as being slums, you don't have place to even drive the car near their homes.
> Most buildings are not designed to have electric chargers as we do not have a concept of "parking spot"
Almost all apartments constructed for past 10 - 15 years, and that is a lot mind you, have designated parking spaces for each and every apartment.
Funny enough, no one in the country raised voice against it.
Fuel is what affects price of everything from grocery to your mobile phone shipped through Amazon, so why is government collecting and increasing this tax on people?
However, taxes can come down. Geo-politically speaking though, it is in the interest of the govt. that the consumption of fuels is kept to a minimum, as we don't have any significant oil reserves.
Growing up we had no gas station in the 20Km radius. We owned a "moped" and we had to carefully plan our trips keeping that in mind. This was a not a demand supply problem because everyone and their brother owned mopeds like us. Some folks would smuggle petrol and store it in large metal barrels in their homes and then sell it at 15% profit. Occasionally they use to catch fire killing people and little children. The person would than be seen as a horrible criminal who deserved what he go for storing gas illegally.
Since a major trade highway went through our town it was actually no brainer to put a gas station in the vicinity but two people who owned gas stations on the same highway would go to great lengths to stop any new license for being issued, it reached to a level where they even murdered would be gas station owners. Eventually an even bigger goon managed to setup a gas station solving a lot of these problems but the gas continued to remain expensive as government taxed it around 100%.
Energy is the foundation of all economic activity. Part of the reason why USA is the most prosperous country on earth is because some amazing entrepreneurs like Rockfeller managed to reduce the price of gas to a fraction of what it was before them. India's abject poverty is primarily because of how tightly Indian government controls the entire energy market. From electricity to Petrol everything is not just tightly controlled but has the most perverse rent seeking policies around it.
To own a gas station you need to get several licenses and permits from the gas companies which are mostly government owned like Indian Oil. These companies will not give licenses to anyone unless you are politically connected and willing to pay huge sums of bribes. Last time I checked the bribes for a highway patrol pump camp to around USD 900K not worth it. Of course if you are son in law of the right minister you get this for free giving you a $900K head start over your competition.
> there is always a shortage and you will see huge lines to fill up gas
I mean shortages of gas stations and not gas. I can give anecdotal evidence but the oil companies have a plan to double total number of gas stations in India from 65K to 120K in next 5 years that alone should tell you a lot about current state. (USA for example has declining number of gas stations).
> Almost all apartments constructed for past 10 - 15 years, and that is a lot mind you, have designated parking spaces for each and every apartment.
I hope so, and I hope they have the ability to retrofit these spots with charging stations with mechanisms to pay for that electricity.
The same report also mentioned an EV by some Indian manufacturer that seemed to have good specs on paper.
So I am assuming there should be EVs in future from more of them as is happening in most parts of the world now.
And right at the top, 2 years back, federal Transport Minister announced right in front of all car manufacturers event, to which he was invited for keynote "I am not going to allow you to sell Petrol Cars after 2030". Obviously no governemnt can last that long, but still.
Audience was like ...... aaaawwwwoooo, oh man, what do we do with all our current investment! Really gave the manufacture clear message to kick-start R&D NOW. And things have definitely started moving.
My personal guess is at least 50% sales-market-share by 2025. Domestically manufactured EVs.
"Be pleased heathens, for we allowed you plebs to own cars and computers"
Indira Gandhi is probably second only to the British in terms of the damage she did to the country [all of which are still in effect].
In India people will tend to sacrifice safety in order to save costs which is one of the big reasons why Suzuki made it big.
Personally I drive a Hyundai i10 Nios ,much stable at 60mph highway speeds than a Suzuki Swift. and offer better safety if not world class. Also, with the pathetic road driving conditions in India every other Suzuki vehicle you see on the road has a visible dent and looks like the stuff is made out of low quality plastic.
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