The Car that Built a Company
B V R Subbu
254 pages; Rs 599
Old-timers at Maruti still sigh: “Had we launched the WagonR earlier, there would have been no Santro.”
There almost wasn’t. The two exhibition prototypes of the Santro that arrived in India to be presented at the 1998 Auto Expo were damaged, thanks to the less-than-ginger cargo handling. Dilip Chhabria, ace car designer, stepped in to make them suitable for exhibition.
That Expo became a high-water mark for automotive shows in these parts. It also saw the Tata Indica crawl out of a giant oyster, and Daewoo took the covers off its super cute Matiz.
The three — all small cars — made an onslaught on Maruti’s hegemony over the Indian car market. That did not kill Maruti. Underlining Friederich Nietzsche’s theory of “that which does not kill us”, it made the market leader stronger. More important, it ushered in the era of high growth, modern technology, and climate-friendly emission norms, and made the customer realise that she could demand better service and features. Till then, Maruti felt no need to market its cars; it dispensed them as favours to those in the long queue.
Hyundai India’s public and media face, for several of its initial years in India, was B V R Subbu. An 18-year veteran of Tata Motors, he moved to Hyundai India at the time of its inception. A forceful presence with a bristling moustache — much subdued now, going by the photo on this book’s back cover — Mr Subbu took on his competitors directly, defying the genteel traditions. As he told me in one of our several interactions, he took pride in “calling a spade a bloody shovel”.
One of the shovel’s early targets was the Matiz. Both the Santro and the Matiz came from Korean chaebols, both were in the same price segment, and both boasted modern technology and features. They gave scores of Indian small car users their first taste of the power steering and multi-pint fuel injection (MPFI). The difference was in their looks — the Santro was the ugly sister.
Mr Subbu brushed that off as a small detail. He homed in on the Matiz’s smaller engine — 800 cc compared to 1,000 cc for the Santro. Daewoo’s people tried to fight back, saying the power output of both the cars was roughly the same in the driving range of RPMs (rotation per minute, or engine speed). But at that time, torque and RPMs were Latin to Indian consumers. Mr Subbu told them the difference in the cubic capacities was unbridgeable.
The Matiz soon fell upon bad times as Daewoo faced financial distress back home in South Korea. Eventually, its heavy vehicles division was sold to Tata Motors and the car unit to General Motors. General Motors took years to bring the Matiz back to India, as the Spark. By that time, the market had shifted.
Running parallel to the battle with the Matiz was Mr Subbu’s feud with Maruti. Hyundai set the ball rolling on customer care, service, and quality. Despite being the dominant player, Maruti was no longer setting the agenda.
Mr Subbu started many fires. One of the first was about emission norms, and the superiority of the MPFI over carburetors. Hyundai won a big victory when the Supreme Court told Maruti to move to higher emission norms, which made MPFI necessary.
Mr Subbu said the Santro’s Zip Drive version was the first small car to have a power steering, and that power steering was just what Ravi Shastri ordered (the cricket commentator has said “the doctor ordered” so many times the adage should be rightfully his).
Maruti, self-conscious as ever, did not protest much, though it was the first to put power steering in a small car, a WagonR variant.
Later, there was another fire about the true five-seater car. Hyundai's advertising said Maruti’s Alto and Wagon R — both high-volume small cars — were, in reality, mere four-seaters since they had only two seat belts in the rear seat. The Santro — you guessed it — had three.
Wisely, Hyundai did not want to outrun the Maruti 800, whose price-to-value equation could not be matched. It chose the Zen as the Santro’s worthy rival, where the price band allowed more elbow room for features and profit margin. Within six months of Santro’s October 1998 launch, Hyundai became the second-largest car maker in India. In 15 months, the Santro outsold the Zen, and paved the way for Hyundai into higher segments.
It helped that Maruti did not launch a single new car between the Esteem in 1994 and the Baleno at the end of 1999, as its two major shareholders were busy in court fighting for control over the company. But, did Hyundai get lucky, as the sighing in the beginning of this review suggests?
Both the Santro and WagonR are Tall Boys. But there is more to Hyundai than that. Nearly every car company in the world has come to India since the government opened up the market in the middle of the 1990s. However, only Hyundai, though it remains a distant second in market share, has challenged Maruti in some segments. Today, Maruti has seven of the 10 top selling models in the country, Hyundai the other three.
This is the story of how that was done, from the trenches, by a man who was at the frontlines. The book does not go as far as the bloody shovel, but there are enough spades in it.