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Timeline of Maruti Suzuki: The story of the family car

The car maker’s fortunes have seen great ups and downs through the many decades of its existence

autos Updated: Jul 21, 2012 22:29 IST

Hindustan Times

The car maker’s fortunes have seen great ups and downs through the many decades of its existence.

1971-77A company called Maruti Limited incorporated under the Companies Act with Sanjay Gandhi as its first managing director. The purpose of the company was to design, manufacture and assemble a small car for the masses. Gandhi held talks with various firms including Peugeot, Volkswagen and Suzuki of Japan. However, the company went into liquidation in 1977 and the dream never saw the light of the day.

1981-84 The government salvages Maruti and starts scouting for an active foreign collaborator. Suzuki is selected due to its know-how to manufacture small cars and the company Maruti Udyog Limited is incorporated in 1981. Suzuki acquires 26% stake in the company with an option to increase it to 40%. To begin with Maruti had 883 employees under its rolls. The factory is set up on the outskirts of Delhi in Gurgaon and the first car – Maruti 800 – is launched in December 1983 followed by India’s first van – Omni. Both cars can still be seen on Indian roads.

1986-88 Maruti starts export of cars to Hungary while the Maruti 800 sees its first model change. Production capacity at the Gurgaon facility is expanded rapidly to one lakh units per year. Simultaneously, the number of employees grows to 2000 and would increase further to 4000 in 1992 and 5700 by 1999. Suzuki exercises its option to buy more equity and increases its stake to 40% in 1987. Waiting period of the M800 swells to over a year as Maruti cannot make enough of them. The Japanese firm gains the reputation of a job-creating hero.

1991-93 Liberalisation of the Indian economy ushers in a rush of foreign companies like GM, Ford, Peugeot, Daewoo and Honda. It benefits Suzuki and increases its stake to 50%. The company is no longer a public sector undertaking but an Indian company run on Japanese principles. A rotating scheme for appointing the managing director is devised with government and Suzuki taking turns to appoint a candidate for five years, alternately.

1996-98 Korean auto giant Hyundai enters India with Santro while Tata Motors, country’s largest commercial vehicle manufacturer, enters the passenger car segment with Indica. The two along with Daewoo’s Matiz provide competition to Maruti’s M800 and Zen. As the market expands, the company’s hold weakens and its market share falls from 80% in 1995 to 70% in 2001.

1997-99 Rift between Indian government and Suzuki. Government nominates SSLN Bhaskarudu as MD in August 1997 without consulting Suzuki even as existing MD R C Bhargava was completing his tenure. Bhaskarudu strives for localisation of gearboxes creating a conflict with Suzuki. The latter brand him as incompetent and take the matter to court.

September 2000 Maruti introduces Alto. It has been the largest selling car for the past seven years and after the introduction of a peppier version in 2010, it became the largest-selling small car in the world.

2000-02 Maruti witnesses its first labour unrest. Workers resort to a go slow, lowering production in October 2000. New NDA-led government’s disinvestment plan also did not go down well with the workers. Government privatises Maruti in 2002 and Suzuki takes majority ownership with a 54.2% stake.

2003 Maruti is listed on BSE and NSE after an IPO that was oversubscribed 7.82 times. The government sold 25% of its stake. The government’s stake fell to 17% and mopped up around R1000 crore. In 2006, government sold more of its stake and exited the company in 2007 by selling off the residual equity. Today, after Suzuki, foreign institutional investors hold the maximum equity at 20.3% followed by banks and financial institutions like LIC at 12.7%. General public owns 2.46% of the company.

2004 Maruti steps out of Gurgaon to invest in Manesar. Initially one plant with a capacity of three lakh units and an investment of R1450 crore was set up in 2007. The company announced fresh investment of R3625 crore to build two more plants that would take up its capacity to 8.5 lakh units by 2014. Suzuki also invests in a motorcycle factory and a R&D hub in the same region.

2005 The Swift is launched and it becomes a symbol of young India in a way similar to the M800 in the 80’s. It is the second-largest seller in the country after the Alto. In 2008, Maruti tweaks the model to create a sedan, the Dzire, and turns the market leader in sedans. It is the only success for Maruti outside the small car segment.

2010 Maruti decides to phase out the iconic M800 in 13 big cities after stricter emission norms. The car would see a gradual demise when the same norms are applied elsewhere in 2015. It marks the end of an era for the most loved car in the country. M800 remains the car with the maximum cumulative sales at around 2.8 million.

2011 A decade of smooth sailing is shattered when three labour strikes between June and October rock the new Manesar factory and cripples the production of the plant. Workers demanded recognition of a new union. During the course of the unrest, Maruti suffers a revenue loss of around R2500 crore and a production loss of 83,000 cars. Its marketshare during the period slides to 38%, the worst ever since inception, while it also witnesses its worst ever quarterly financial performance during the October-December 2011 quarter. The strike is finally resolved in October after a tripartite agreement.

July 2012 A mob of workers go on a rampage at Manesar killing a senior HR executive of the company and injuring at least 50 others including two Japanese nationals. The twin factories are partially set on fire and the offices, security cabins and fire safety systems are completely damaged. The incident shocks the nation and the company is taken by surprise. 91 workers are arrested and police is on the look out for more. The plant is shut indefinitely leaving the company in total disarray.

First Published: Jul 21, 2012 22:26 IST