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January 7, 2000

BUDGET 1999-2000

The Rediff Business Special/Osamu Suzuki

India is unstoppable in the new millennium

Osamu Suzuki My visions of the New Millennium may appear biased for two reasons. Firstly, I manufacture cars, hence my perspective is biased as it views global developments from the industry's point of view. Secondly, Suzuki's operation extends to over 180 countries worldwide and it has over 65 manufacturing plants in 28 countries. But I have visited India many more times than I have visited any other operation in any other country. Hence my exposure to India is more intensive than anywhere else. I hope that you will forgive me if my vision is coloured by my beliefs about the great future that awaits India.

In the 20th century, the automobile industry was the very symbol of economic nationalism. Ford popularised the car through the process of mass production and its price came down from $1,000 to $300 in five years. America's economy moved on the wheels of the car industry. Cars made communication faster, distances shorter and spurred demand for many other products in society.

Because the US was the hub of this innovation, it developed a cutting edge in car technology, the benefits of which can still be seen in its industry. Post World War-II, Europe's reconstruction was aided by the spread of the automobile. Japan followed suit and this industry became its spearhead into international markets. The reason is simple: this industry was the catalyst for managerial and organisational innovation.

As the automobile industry grew, so did the economy. After the oil crises of the '70s, the impetus of growth during the '80s was achieved through computers. A new paradigm started evolving leading to today's world of information technology.

Many sceptics doubt the future of the automobile industry in such a changing world. I would humbly submit my note of dissent. The reasons are clear. Six billion people abound the earth. Only one billion today can enjoy the benefits of an automobile. The rest are waiting to own one. The 21st century epitomised a period of human quest and desire. According to me, the new millennium is one of hope and fulfillment.

Info-tech has a great future. It is here to bind nations and people. It is the vehicle for integration into a global economy. But in order that it can be successful, it needs to serve the manufacturing industry which will continue to remain the basis of future growth.

Email this report to a friend National economies over the past decade have been subsumed in large regional integrations. Geographic boundaries have already become subordinate to economic demands. The age of economic nationalism will have to make way for global interdependence.

In this changing scenario, I do not see the growth of the automobile sector in mechanical terms. The auto industry along with other industries will experience deep and qualitative changes. What is happening to national economies is already having a trickle-down effect on my industry.

I therefore see greater unification in all sectors on a global scale. All automobile alliances will merge into four or five automobile groups which will be the driving force of the new millennium.

There is one other reason why this integration will happen. Petrol is not a limitless source. The auto industry can produce cars; it cannot ensure the availability of petrol. There will thus be a search for a new power source.

This will be a very expensive search. By some calculations, the total development cost of alternate sources of energy could be as much as ten times the annual budget of the US. No single company can afford this. Hence companies will merge to share costs. Also, they will share information to save resources to grow.

Osamu Suzuki Paradoxically, even as globalisation progresses, there will be greater emphasis on local needs. A basic car model will be developed by each group for global use, but it will have many derivatives to suit the specific requirements of different markets. Such a harmony between global scales and local needs will be made possible by the revolution in info-tech. The world may have grown in its possibilities but the cyber-age has shrunk it in terms of probabilities.

In the new millennium, trans-nationals are inevitably bound to become more powerful. But power creates responsibilities. Companies will have to pay greater attention to people and the countries where they are working. They will have to evolve as role models for employer-employee and producer-customer relationships.

This is an Asian thought and an Indian legacy. Education of the customer will play a key role in the growth of companies. This will be spurred and abetted by growth in info-tech, which will capsulate the needs and the aspirations of the people. It will empower the customer. This will keep the power of trans-nationals in check.

Yet this technologically unified world will still require efforts to create a common vision. Technical and financial alliances can easily be made but they cannot work unless they overcome the gap of perception in people's minds. The more scientific and efficient the world becomes, the more the fears that it will be accompanied by lack of communication. In this area, the human element will remain the key player. The only way to overcome this hurdle is to create relationship of trust and 'heart-to-heart' communication.

My concept of 'heart-to-heart' communication embraces a mind without fear, where mutuality has a precedence over individuality. It is the human touch which is imperative for growth and evolution of a 'common mind' in the world of informatics in the new millennium. The success of trans-nationals will depend on their abilities to achieve a 'common mind'. Only a 'common mind' can ensure better customer service, efficient management, cost reduction and improvement in quality across the globe.

Maruti Suzuki Zen The car of the new millennium will have to upgrade the environment. These cars will have to use new materials. These will be light and tough and recyclable with much longer life and efficiency. The definition of the used or the second-hand car will change. There will be a shift in the concept of automobile maintenance. Cars, like computers, could become easily upgradable. Engines will have a longer life. Cars belonging to different platforms and companies will have commonalities of parts to reduce cost. Above all, cars will have to become cheaper in order to fulfil the aspirations of all people.

A new century on the move will thus have a new overriding symbol: I see this as the small car. This has been the unmistakable trend. What is the difference between the small and the big car? The big car satisfies ego. A small car meets necessity. But both perform the same mechanical functions of transporting people.

Wagon R of Maruti Suzuki In the '70s, Suzuki opted to focus on small cars. Today, its expertise in this sector is respected globally. In fact, our slogan has been 'Small car for a big future'. In 1992, we added the concept of comfort to the small car with the launch of the Wagon R. The whole industry followed. In 1982, Suzuki came to India with a belief and hope. The whole world today shares our vision about India and the future of the small car. This is a matter of personal pride.

My vision of the new millennium cannot be complete without sharing with you my belief about India in the new millennium. In the 18 years that I have been coming to India, I have seen a transformation of this country which is visible from the moment one arrives. Wider and well-lit roads greet the visitor. Bullock carts and tongas have been replaced by two-wheelers and cars. Personally, I am thankful that most of the cars increased on India roads are Marutis!

The vibrant India that steps out into the new millennium has many global advantages. It should be our effort to harness them to India's maximum benefit. The biggest advantage is that, in the world of info-tech, numbers are a great attraction. And India does have the numbers. It also has a vibrant democracy. A high number of technically educated people. An industrial base ready to take off. India is strategically located. Indians have done the world proud wherever they have entered. I can smell a changing India, an India poised to take on the world in the new millennium.

The last century focused on the US, Europe and Japan. The focus of the new millennium will be manufacturing and info-tech. Today, India is ready to meet the challenge of both. Indian industry needs infrastructure and communication support for it to bloom. And these are both on the government's agenda.

Indian software companies are respected globally. India is unstoppable. I am very bullish about India. And I recommend it with pride to all global companies. I am waiting for the day my dream about India can be realised. And that Maruti, which is an Indian company, can sell its cars competitively in the world carrying proudly the 'Made in India' symbol.

The writer is president and chief executive, Suzuki Motors, and chairman, Maruti Udyog Limited. The article is based on his recent address to the Federation of Indian Chambers of Commerce and Industry in New Delhi. Suzuki was born on January 30, 1930; he joined SM in 1958, and has since held several crucial posts. He became SM's president in 1978.


The Maruti Saga



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