There was a time when buying a car used to be a dream of the middle-class people of India. But today in its budget and very low price, the Maruti car is running on the roads of the country, due to which this dream is coming true. Yes, this dream of yours has been realized by the car manufacturer Maruti Suzuki. Just imagine the steps the company had to go through to provide you with the smallest and best cars possible.
Success Story of Maruti Suzuki Ltd.
Maruti has completed 16 years of listing in the stock market. Maruti is the largest car maker in the country with a 52 percent market share. At the same time, Maruti owns every other vehicle sold in the country. But you will be surprised to know that “if an investor had invested 12 thousand rupees in Maruti’s stock in 2003, then his investment would have become about 6 lakh rupees”. In the year 2003, Maruti Stock Exchange was listed on BSE and NSE. At that time the government had sold its 25 percent stake. The IPO was priced at Rs 125 and was listed on the exchange at Rs 157 per share.
Maruti Suzuki is a private limited company. The government continued to reduce its stake in the company. In the year 2007, the government completely exited this company by selling all its stakes to financial institutions. Initially, the government had a 74 percent stake in Maruti Suzuki and 26 percent in Suzuki. How investors got profits in lakhs – On July 9, 2003, Maruti’s shares entered the stock market. The IPO came at a price of Rs 125. At the same time, it was listed at Rs 157 and the stock touched its all-time high of Rs 10,000 five years ago in December 2017. However, like other companies in the country, the stock fell to a level of Rs 6033, after a fall in auto sales. Let us tell you that the company has given dividends every year for 9 years. In the year 2003, Rs 12500 became Rs 6 lakh. It does not include dividends.
Let’s know how Maruti started (Government Connection with Maruti)
Maruti was launched on 16 November 1970. Its earlier name was Maruti Technical Services Private Limited (MTSPL). The company started by providing technical services related to design, manufacturing and assembly to make Indian cars.
In June 1971, a company ‘Maruti Limited’ was formed under the Companies Act and Sanjay Gandhi became its first Managing Director. In 1973, under a formal agreement between Sonia Gandhi and MTSPL, he was made the MD of Maruti Limited along with Sanjay Gandhi. Maruti used to pay salary to Sonia Gandhi – Under the agreement, the salary of Sonia Gandhi and Sanjay Gandhi was fixed at Rs 2,000 per month for five years. At the same time, commission and other benefits were to be given separately. In 1975, MTSPL and a subsidiary of Maruti Limited, Maruti Heavy Pvt. Ltd. Another agreement was signed with MTSPL, under which MTSPL was to provide technology-related services for the manufacturing of road rollers. Started with a capital of only Rs 200 – Sonia Gandhi and Sanjay Gandhi were the first permanent directors of MTSPL, who had only 20 shares at Rs 10 per share. In other words, the paid-up capital of the company at the time of launch was Rs 200. Thus Sonia and Sanjay were initially equal partners in the company.
On 15 December 1971, MTSPL allotted a large number of shares to Sonia and Sanjay Gandhi. On 2 June 1972, MTSPL entered into an agreement with Maruti Limited, under which MTSPL was paid approximately Rs 5 lakh in return for providing technical know-how. Under this, Sonia and Sanjay were also to get a technical fee of 2 percent of the net sales of cars annually.
The first sample of Maruti did not pass
the sample of the company’s car could not be passed. This car was supposed to be a completely Indian car. However, Maruti’s prototype could never pass the VRDE test to run for 30,000 km.
In this car, a German engine was installed by a German technician. This technician was appointed as a consultant. The prototype had problems ranging from vibration to brake failure and steering.
The government changed the rules – On July 22, 1974, Maruti also got an industrial license to produce 50 thousand cars. During that time, the continuous security being given to the company was also heavily criticized. The then PM Indira Gandhi also had to explain the allegations. Indira lost the election in 1977, making the situation worse. The company could not manufacture a single car since its inception. However, in 1977, the Janata Party government was formed in the country and Maruti Limited came on the verge of closure. Meanwhile, the new government set up a commission headed by Justice AP Gupta to probe Maruti. This commission submitted a very serious report to the central government.
Maruti gets Suzuki’s support
Maruti was nationalized, a year after Sanjay Gandhi’s death, and Indira Gandhi began efforts to revive Maruti. The government began looking for an active partner for the new company. The company was nationalized in 1981 giving it the name Maruti Udyog Limited. This broke Sonia Gandhi’s relationship with the company. Meanwhile, the Japanese company Suzuki approached the government to produce the car in India. Agreement between Maruti and Suzuki Ultimately a license and joint venture agreement (JVA) was signed between Maruti Udyog Limited and Suzuki of Japan in 1982. Thus came into existence Maruti Suzuki, which was initially an importer of cars. At that time the government’s stake in the company was 74 percent.
At that time India was a ‘close economy’ country. Suzuki was given the right to import 40,000 cars for the first two years, though initially, the target was to procure 33 percent indigenous equipment. This caused great disappointment to the local manufacturers.
Maruti 800 made in 1983
After all the efforts, finally, in 1983, Maruti’s first car came on the market, the Maruti 800, which was a 796 cc hatchback car and was the first affordable car in India. Its local production started in December 1983.
After that Maruti Van and Gypsy came in the market. In 1986, the original Maruti 800 replaced the 796 cc car. The company achieved the milestone of manufacturing one lakh cars in 1986. The company also began exporting 500 cars to Hungary in 1987.
Official website of Maruti Suzuki https://www.marutisuzuki.com/
Contribution of R. C. Bhargava to Maruti
RC Bhargava joined the company in 1981 as Director (Marketing). In 1884 he became the joint director of the company, in 1985 he became the managing director, in 1990 he became the chairman and managing director of Maruti Udyog Limited. After that the Chairman and CEO of Consulting Private Limited in 1998 and Director of Maruti Udyog Limited in 2003. In 2007, the name of Maruti Udyog Limited was changed to Maruti Suzuki India Limited and Bhargava became its chairman.
Bhargava, who has witnessed the good and bad days of the company, along with senior journalist and writer Sita has brought the story of Maruti to the pages. The name of the book is ‘The Maruti Story’ which means the story of Maruti. This book with success mantra can bring change in your life. This book will change your thinking, not only that it inspires you to do different things in the race of competition. You must read this book to know the secret of success. It’s printed, it’s still too late to hit the market.
I hope you like the story of Maruti Suzuki Ltd. Please let us know your thoughts in comment section, Thanks for reading.