When Ravindra Chandra Bhargava was appointed marketing director of Maruti Udyog Limited in 1981, it was a big surprise for him. He was a novice in the auto sector. At that time he was director of commercial operations at Bharat Heavy Electrical Ltd, a state-owned manufacturer of capital goods and machinery.
People counselled him against joining the venture because it was considered a political project with a bleak future, he says. Maruti Limited was set up in 1971 by Sanjay Gandhi, son of the-then Prime Minister Indira Gandhi. The firm went into liquidation after he died in an air crash in June 1980. Thereafter, the government acquired the assets of the company under Maruti Limited (Acquisition and Transfer of Undertaking) Act 1980. On October 24, 1981, Maruti Udyog Limited was incorporated under the Provisions of Indian Companies Act 1956. It was under these circumstances in 1981 that Bhargava got the call to join the company. It was also the beginning of the great success that Maruti is today.
But the journey was not at all easy. Bhargava recalls, ?I had simply no knowledge about the automobile sector. I knew nothing about manufacturing, marketing or designing. It was a new learning process for me. You have to learn as you go along.? And he got down quickly to learn the nitty-gritty of the automotive world.
His lack of domain experience was not the only hurdle. There was nothing at the ground level to learn from. ?When I joined the company, there was no product and no factory, except the shell. We had to set up the production facility. Everything was set up by us right from the production facility to marketing, sales and surveys teams. Everything had to be developed from the scratch.?? The project got a kickstart with the signing of a licence and joint venture agreement between Maruti Udyog Limited and Suzuki Motors Corporation in 1982.
Spinning the fortunes of Maruti, from scratch to the leading auto company of today, was a challenging task. He gives credit to his 23 year long tenure in the civil service for his success with the automotive company.
Though he was sent on deputation to Maruti for three years, he preferred to stay on, giving up his IAS job. In the process, he also went up the ranks. He was promoted to the post of managing director in 1985 and chairman in 1990. He retired as managing director in 1997, but continues as chairman till date.
He says, ?The company was profitable throughout this period. We had 50-53% return on capital employed. At that time we had a market share of 82%. Our productivity increased from a value add of about two-and-half lakh per person up to 27 lakh per person. Individual productivity of Maruti workers also increased by more than 10 times. We made no loss in our balance sheet. At the time of my retirement in 1997, the company was producing nearly 3 lakh units.?
A new managing director was appointed by the government in 1997. But Suzuki was of the view that the new managing director was not the right person. The dispute went into international arbitration, but it was sorted out in an out of court settlement. But the dispute had its affect on the company. He says, ??The dispute meant that no new models came along for some time. Meanwhile, the market opened up India and there was competition. We lost our market share and it slumped to 45%.?
Bhargava is quite upbeat even during this downturn. He says that the economic slowdown has definitely hit the auto industry, but not to the degree as is reported. ?The industry sales have definitely come down to some extent, but our market share has gone over 50%.??
A man who has worked at the highest level in both the private and the public sectors has an interesting insight to offer on the differences between the two work cultures. ?A great boon in the private company is that an individual?s initiative and creativity are encouraged, rewarded and recognised. On the contrary, every person is replaceable in the public sector. There is no incentive for creativity and innovativeness.?? He adds, ??in the public sector, there is a big disincentive if you make a mistake. One mistake may ruin your career. In the private sector, making a mistake is alright if your overall results are positive.?
The public sector also lost out to the private sector on salaries in his days. Though an IAS officer, he found it financially challenging when he was posted to the national capital in 1973. Consequently, his wife, Aruna, a homemaker at that time, took on the responsibility of supporting the education of their three children, two daughters and one son. She took up a job at the Rajasthan Emporium. Later on, she went on to head the production unit of a garment export house.
Says Bhargava, ??She earned more money than I. It?s because of her earnings that we could send our children to decent schools. Otherwise I could not have managed. She paid all their bills.? As an afterthought, he adds, ?I largely neglected my children as I had neither the time nor the money to spend on them. I am amazed to see the kind of time my daughter spends with her children.?
His own childhood was all about studies and excelling in them. A topper throughout his academic career, Bhargava hails from a family where education was always the first priority. ?My father, a technologist with the Forest Research Institute, Dehradun, spent his entire money on the education of his children .He was of the view that the best asset that he could give his children was good education.??
An alumnus of the Doon School, Bhargava subsequently went on to study at the Welham Boys School, Dehradun. Then he went on to graduate in sciences from the Allahabad University in 1952. It was followed by masters in science. He wanted to get into civil service, but was underage. So, he joined history for a year and economics for another year. Preparation for the IAS was done in the university as well during the vacations at home. He took the examination in 1955 and scored third position in the combined IAS/IFS list. He is 74 today, but his pursuit of excellence continues even today.
