In June 2022, the total production of passenger vehicles, three wheelers, two wheelers, and quadricycles stood at 2,081,148 units in India. The Indian automotive industry is targeting to increase exports of vehicles by five times during 2016-26, and in FY22, total automobile exports from India stood at 5,617,246. The Government of India expects the automobile sector to attract US$ 8-10 billion in local and foreign investments by 2023.
According to NITI Aayog and the Rocky Mountain Institute (RMI), India’s EV finance industry is likely to reach Rs. 3.7 lakh crore (US$ 50 billion) by 2030, and by the same year, India could be a leader in shared mobility, providing opportunities for electric and autonomous vehicles.
These numbers are especially remarkable considering that cars (and even two wheelers!) were once considered a symbol of luxury for the middle class Indian. This was just 40 years ago. It is also very important to remember, that up until 1991, Indian businesses had to function under the highly restrictive Licence Raj: a regime of licences, regulations, and accompanying red tape, that hindered the set up and running of businesses in India between 1947 and 1990.
The Licence Raj was the brainchild of thinkers in India who saw socialism as the way to empower poor farmers in India. As these thinkers came into power after independence, socialist ideas found their way into the policies of the Licence Raj. Unfortunately, in practice, the Licence Raj worked to deter economic growth and upliftment of the poor, rather than the reverse. For Indian businesses, even successful ones, the pursuit of growth was riddled with obstacles.
And yet, some companies managed to beat the odds and become household names. These were companies that made products of such high quality, and in such high demand, that people waited for 10 years for their turn to buy them. India’s automobile sector was home to one such giant.
Mobility in the 1970s-90s India wasn’t easy. Even in the capital, bus services didn’t run on time, and involved a sardine-in-a-can experience. Taxis and rickshaws ran on their own whims (still do!) and in most Indian cities, charged fares that were very different from the official fare list. Moreover, these were expensive. Also, unreliable.
For middle class families then, the pinnacle of their aspiration was to own their own scooter – a Bajaj Chetak. There’s an entire generation of 40 year olds today, who remember going to school, standing on the footstand of their dad’s Bajaj Chetak scooter.
Launched in 1972, in a market that had only known the imported Vespas and Lambrettas (also brought to India by Bajaj Auto), the Bajaj Chetak caught everyone’s fancy. It was modelled after the Vespa Sprint, but named after Maharana Pratap’s trusty steed Chetak. It wasn’t that scooters were a novelty, it was that this scooter was a revelation. The demand far, far outstripped supply.
But, as this was the time of the Licence Raj, Bajaj Auto was not free to ramp up production to meet demand. This meant that prices doubled, and soon, the waiting period for a new Bajaj Chetak was 10 years long. And people waited, because they knew that the Chetak was worth it. It was affordable. It was sturdy. It started when kicked. Anyone could fix it. And the mileage was impressive. It was, in short, a high quality product from a company known for its integrity.
While this was by far the biggest success Bajaj Auto had seen so far, it wasn’t the first time that they had created a stir. Bajaj Auto were single-handedly responsible for the two and three-wheeler revolution in India. In 1948, they began with selling imported vehicles, and graduated to manufacturing two and three wheelers by 1959. Their success propelled them into the 1960s, where they became a public limited company, and just a decade later, in 1970, they rolled out their 1,00,000th vehicle. In 1977, the rear engine auto-rickshaw provided a comfortable alternative to overcrowded buses, and suddenly, it was safe for women to go to college, work or to take their kids to school by themselves.
Then came the liberalisation in 1991. Bajaj Auto weathered the storm of international competition by sticking to their bedrock of high quality, durable, reliable vehicles at affordable prices. Today, Bajaj Auto continues to lead Indian automobile exports, accounting for over 50 per cent of the country’s two-wheeler and three-wheeler exports with a turnover of Rs 11,845 crores. In FY 2019-20, 47 per cent of Bajaj Auto’s production was exported to over 79 countries.
In many ways, the story of Bajaj Auto has paralleled the growth story of India Inc. Both began with the odds stacked against them and had to work long and hard for every little victory, both had to grow capabilities and constantly adapt themselves to a changing landscape, and both have emerged stronger, because of it.
Bajaj Auto is one of the few home grown Indian companies that survived the end of the Licence Raj. Part of the reason is their ability to constantly reinvent themselves and push themselves to ever greater heights. However, the core of the Bajaj offering has always been quality: quality product, quality service, and an unquestionable integrity.
In building this strong base, Bajaj Auto was aided greatly by the economic landscape of the late 90s, when after the historic liberalisation effort, India needed to come up with a globally acceptable mechanism for compliance and conformity to the highest international quality standards. In 1996, the Quality Council of India (QCI) was conceived, and the GOI worked closely with the three leading industry chambers ASSOCHAM, FICCI and CII to shape the QCI as an organisation.
This couldn’t have come at a better time for Indian companies which were facing the onslaught of competition from international companies for the first time. Home grown companies needed to learn and adapt to international standards of quality and efficiency, while also being competitive. The price conscious Indian consumer was suddenly flush with choices, and was voting with their wallet. The Indian companies that survived this churn, were the ones who not only had the agility to change with rapidly evolving customer preferences, but those who came out on top on quality.
The QCI played a pivotal role in shaping the quality movement in India for the last 25 years by assuring quality standards of our goods, and certifying products in several sectors. By creating the framework, and providing the resources they need, QCI helped set the new benchmark for the way Indian firms approached quality, integrity and consumer centrism.
India’s Quality Movement, Gunvatta se Atmanirbharta, continues to challenge Indian businesses to achieve ever greater standards of quality, improved competitiveness, and ever higher customer trust, setting them up to succeed in the global marketplace. With India’s flourishing manufacturing sector, improved ease of business and growing infrastructure, it will be interesting to see how many of our companies rise to the challenge of becoming household names, not just in familiar shores, but all over the globe.
To know more about QCI, and India’s Gunvatta se Atmanirbharta initiative and the many ways in which it has impacted our lives, visit https://www.news18.com/qci/
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