As Nitin Gadkari raises the stakes for car companies on road safety norms, veteran auto honcho and survivor of many battles, R C Bhargava, faces a dilemma: will the hatchback customer – who has just upgraded from a scooter and is fighting fuel and food inflation – pay more for safety?
The chairman of the largest car-maker in India, which accounts for nearly half the cars produced in India, has a gut feel, he won’t.
The government is pitting data against this gut feel: 150,000 people die and nearly 500,000 are injured annually in road accidents in India.
With only 1% of the world’s vehicles, India accounts for almost 10% of all crash-related deaths, The World Bank said in a June report. Of course, the condition of India’s roads leaves much to be desired, but, at the moment, the government is focussed on more car safety norms, and has tightened the noose on making auto makers more accountable.
Chairman said in a recent interview to The Times of India that the car maker will not hesitate to “discontinue” small cars if they become unviable due to the government’s policy interventions such as the proposal to mandate six airbags from October 1.
Maruti is known for selling affordable, small cars in a price-sensitive market.
“If the policy becomes such that small cars don’t remain viable, we will discontinue them,” Bhargava told TOI, adding that the company itself doesn’t make any significant profits through the sale of the compacts. “The question that we need to ask is that is it a good thing for the country if low-cost cars disappear from the market… the car industry will slow down. There will be less employment in the auto sector.”
Bhargava said Maruti’s dependence on small cars is not as high as it is perceived to be. “Our profits don’t depend on small cars. People have a wrong notion. We sell them almost without profits if you look at models such as the Alto.”
More government, not less
Bhargava’s company is also opposed to a ministry notification that intends to have star ratings indicating vehicle safety based on their performance in crash tests.
says it will adopt safety rating for cars only if customers want it.
Maruti argues that given speeds on Indian roads are slower, cars should be crash-tested at slower speeds than global standards. But data shows that while average speeds are indeed slower, 67% of fatalities occur because of overspeeding, mostly on open roads outside cities.
Maruti’s cars tend to be lighter and cheaper than competing vehicles in the segment. The company has been opposing regulatory costs because they often hurt it the most.
Nevertheless, this is the shrillest opposition to a government policy it has made of late.
If any person can resist official onslaught, Bhargava , who was given the Padma Bhushan, the nation’s third highest civilian honour, in 2016, can.
He can also make himself heard in corridors of power.
“I had three CBI cases instituted against me starting somewhere in the 1992-1994, the last of which finished in 2014. After 20 years to finally emerge and get recognised by the government and get awarded is something which makes me feel that things have happened very well,” Bhargava told ET in an interview after being conferred with the award.
When Indira Gandhi nationalised the assets of Maruti Motor and created Maruti Udyog in partnership with Suzuki Motor in the early 1980s to bring a “people’s car” on India’s roads, Bhargava, then an Indian Administrative Service officer, was one of the people who were picked to lead the company. He started in Maruti as marketing director.
As Maruti evolved over the past three decades – first under government control and then as a company majority-owned by Japanese Suzuki Motor – to decisively place India on the motorisation map of the world, a person who was synonymous with the evolution was Bhargava. He steered it through trials and tribulations, as its deputy managing director, managing director, chairman and managing director, and now chairman – except for a few years in between when he was not associated with the automaker.
Bhargava has invested four decades of his life troubleshooting for Maruti. In between, he has managed to co-author a book, ‘The Maruti Story’, and penned articles for a Japanese publication. He plays golf when time permits, but likes to sit at home when he is not working. “I am much more comfortable at home. We had just gone and spend some 15 days in Goa. Very nice, but I would rather be at home, frankly,” he said.
Bhargava was surprised when ET asked him about unfinished tasks he would like to accomplish. “You can’t say I have nothing more to do in life. That can only happen when you die. I never had a list of what I had to do. For a long time, the major thing was to finish all these CBI matters. It was really quite an unnecessary irritant and it took time.”
Was there anything that he could have done differently? “One of the things you learn, especially if you have been dealing with Japanese: everything is capable of being improved upon. That is Kaizen .. I think we unnecessarily try and attribute to ourselves the capacity to do things perfectly. Nothing is perfect, nothing can ever be perfect.”