Maruti has a quality problem
Maruti Suzuki India Ltd lashes out at component suppliers saying their failure to comply with best practicesis hurting efforts to make India a global hub for small cars, reports Sumant Banerji.autos Updated: Sep 03, 2008 21:03 IST
Maruti Suzuki India Ltd, the country’s largest carmaker, on Wednesday lashed out at component suppliers saying their failure to comply with best practices and quality standards was hurting efforts to make India a global hub for small cars.
"I do not believe we have yet reached a stage where we could design international standard cars, or their main components, entirely on our own," said R C Bhargava, chairman of the company. "I am also not aware how many component manufacturers could, if just given specifications and performance requirements, design and produce those components without seeking help from outside."
Bhargava, an industry veteran, said that auto component companies in India spend just about 1.65 per cent of their sales on research and development, whereas a company like Denso in Japan spends 7.8 per cent of its turnover on R&D.
"The figure is exclusive of those who do not spend on R&D at all and those numbers are also sizeable," he said on the sidelines of an annual meeting of the Automotive Component Manufacturers’ Association.
Component manufacturers claim they have come a long way. "We may not have the best record for quality or compliance among major global auto component industries but we are not that bad either," said Sanjay Labroo, managing director and chief executive, Asahi India — a key component supplier to Maruti.
AK Taneja, president Shriram Pistons and Rings Ltd., another supplier of Maruti agreed. "If we compare where we were and where we are then we have done a lot. But if we look at where we ought to be then a lot needs to be done," he said.
While the growth of the component industry has helped bring down cost of production, the deficit on the quality front is an issue with small car makers that are increasingly looking to export.
"Most of our cars are localised to the extent of 90 per cent, but it changes on cars that are exported,” Bhargava said. "Indian cars should be selling in foreign markets not only because they are low priced, but because they are high on quality, performance and reliability. The quality of a car is as good as the quality of its worst component."