Maruti is officially now bigger than its parent. No kidding given that the market value of the off spring has out grown that of the parent. Maruti has been a remarkable journey! The success story holds several lessons. First and foremost, being fussy about ownership issues does not pay. Losing steam in between, Maruti staved off competition only when government allowed Suzuki to take controlling stake. Second, is the credibility Maruti story lends to Modi government ambition to make India a global manufacturing hub. Third, is the learning about leadership debate over institution versus the individual? Despite change of ownership, Suzuki continues to invest utmost faith in one man, R C Bhargava, enabling him to steer the company. Last but not the least is the issue of whether or not there is a case for sibling buying out its parent? Any takers?
“I care less for solutions from emotions, I believe more in the magic of logic”, said Rajiv Bajaj famously when Bajaj Auto pulled out of scooters. The argument is valid for businesses of all hues. But somehow companies refuse to learn their lessons. What else would explain Maruti Suzuki decision to renew focus on luxury cars? Maruti has burnt its hands several times trying to follow its Japanese peers Toyota and Nissan which boast of a Lexus and Infiniti respectively. Kizashi being the latest victim of the company desire to mount luxury. Maruti’s current contribution of 10 lakh and above segment cars is merely 13% while the Alto family, WagonR and Dezire are time tested bread and butter products. Having ceded space to competition three years ago, Maruti Suzuki has bounced back cornering 45% market share end 2014-15. It must remember small is big!