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A NEW REVOLUTION IN AUTOMOBILE INDUSTRY
CAR WORLD TURNED UPSIDE DOWN!
By M H AHSAN / New Delhi
Remember the good old days when the waiting period for your Vespa and Lambretta scooters and Rajdoot, Yezdi and Bullet bikes extended over months! And when the choice of cars was limited to the dependable Amby (Ambassador), Premier Padmini (from Fiat) and Standard and their prices beyond the reach of the middle class! And when Sanjay Gandhi’s promised cheap car or the poor man’s car was a dream turned sour!
Enter Maruti and the automobile industry in the country was turned upside down and so was the Indian on the move. The now venerable Maruti 800 made its bow in 1982 , heralding a revolution in not just the automobile industry but the very lifestyle of the Indian.
The hype, expectations and scepticism that preceded this landmark continued right till the first of the 796 cc hatchbacks actually hit the market at an astounding price of Rs. 45,000 — much higher than Sanjay Gandhi’s promised Rs. 20,000 but definitely far lower than others in the market. A comparatively sleeker look, Japanese (Suzuki) technology combined to make it the most sought after car in the country.
Almost the same level of hype, expectation and scepticism has preceded the unveiling of Nano or the Rs. one lakh car from the Tatas. An added element this time, of course, is environmental concerns from the likes of R K Pachauri and Sunita Narain. And for the third time in less than three decades, the way India moves on wheels is once again on the threshold of a revolution.
But there is a distinct difference between the Maruti revolution and the one that could be heralded by Nano. Both Maruti and Nano have had their share of controversies. Maruti, originally the brainchild of Sanjay Gandhi, became an Emergency issue before being ultimately taken over by the Government of India under Indira Gandhi in 1981 to be reborn as Maruti Udyog Limited (MUL) and later tying up with Suzuki of Japan. And the Tata’s Rs one lakh car has the shadow of Singur over it, though for some time Nandigram had overshadowed it. No doubt, Singur will again come to occupy the centrestage.
Maruti was billed as The Affordable Car, but became a status symbol. Within days of its launch the vehicle was selling at a premium, often as high as 75 per cent, thanks to the two to three months’ waiting time. And it ruled the roads for more than a decade, leaving its competitors in the small car segment far behind. Standard had lost its steam and a disastrous foray in the luxury car segment via the Standard 2000 had sent the company crashing, and Fiat was still trying to retain its hold with its Padmini. By early 1990s, Maruti and its various models (Omni, Gypsy and Zen) had changed forever the concept of car as a means of family transport to personal commuting, as much as a scooter or a motorcycle. And this was further cemented, when the second automobile revolution hit the Indian roads, with the arrival of foreign car manufacturers in the mid-1990s.
There had been two attempts at manufacturing India’s own luxury cars. Standard 2000 bombed in the market, the company bogged down in a host of legal tangles before collapsing. The Contessa shone briefly on the horizon, and then faded, South Korean company Daewoo came in with its Cielo, followed by Ford India’s Escort. By then Maruti Udyog itself had launched its Maruti 1000, and Hindustan Motors had rolled out its vehicle.
The second revolution arrived with liberalisation of Indian economy, which opened its doors to foreign investors in several sectors, including automotive industry. It was well and truly underway when Daewoo and another South Korean auto giant Hyundai came in with their small cars. Daewoo’s Matiz and Hyundai’s Santro. Both were instant hits, and for the first time the Indian consumer had a wide choice of small cars. With Santro and Matiz (the latter faded with the collapse of the South Korean parent company which was ultimately taken over by General Motors) stepping up the competition, and the Tatas also coming out with Indica, the consumer was truly the king as the manufacturers were forced to keep rolling out newer models and variants of these models. Maruti Udyog now has 11 models — five of them in the small car segment alone — and nearly 100 variants.
Even as the fight for a share in the ever-growing small car pie gains momentum, the fight has been equally fierce in the larger car segment. MUL phased out Maruti 1000 even as it introduced an upgraded model, Esteem. Ford brought in Fiesta, and then Ikon (The Josh Machine). Hyundai too came in with Accent, the Tatas with Indigo, Honda with City, Civic and Accord.
From there it was just a step forward for them to enter the SUVs. Tata Motors, which already had a presence in this segment with Safari and Sumo, has been challenged by Hindustan Motors’ Pajero and Montero, Ford’s Endeavour, Toyota’s Innova and Honda’s CR-V.
As automobile manufacturers thrived, so did the auto component manufacturing sector which had always remained healthy. But now they too had to innovate, design new products, upgrade technology, and with exposure to international markets through foreign car manufacturers presence in India, started thinking global.
A booming economy, a more adventurous middle and upper middle class riding the IT wave, and easy access to finance from the hundreds of automobile finance companies across the country offering competitive rates of interest have turned Urban India into one big Car Bazaar, where the manufacturers have to fight even to maintain their respective share of the market only by periodically coming out with newer models and variants and upgraded versions of existing models.
Never had the Indian road user had it so good. He now has more than 20 models and nearly 200 variants to chose from depending on his budget (which of course can very well be determined by the hundreds of automotive finance companies around the country).
It is in this scenario that Nano has arrived, bringing with it the possibility of another revolution. Of course, the Nano can never aspire to become a status symbol like the Maruti 800 did in its initial years. But look at the roads in any of the metros. Two out of every three private cabs and call taxis are Tata Indicas. The Indica, of course, has its design and performance drawbacks, but that has not prevented its diesel variant to become the most sought after vehicle in the call taxi/private cab sector.
Costing just a few thousand rupees more than some of the high end motorcycles (the top end Bullet is priced around Rs. 95,000), the Nano can very well become one of the more favoured cars for those upgrading from two-wheelers to four-wheelers, the ordinary first time car owners emerging from the middle class. This could also be the beginning of the nightmare for town planners, traffic managers and the road users themselves.
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THE INSIDE STORY 
