Rediff India Abroad
 Rediff India Abroad Home  |  All the sections


The Web

India Abroad

Sign up today!

Article Tools
Email this article
Top emailed links
Print this article
Contact the editors
Discuss this article
Home > Business > Special

Always in top gear

Sunil Jain | June 14, 2003

"Let's head towards Gurgaon anyway, and take a chance. You'll never have a situation where you, I, and the State Bank of India chief are in the same city at the same time," Maruti Udyog managing director Jagdish Khattar exhorted GE Caps' Pramod Bhasin, a partner in Maruti's car-financing business.

Both got into Khattar's gleaming black Baleno and drove towards Gurgaon, where SBI chief A K Purwar happened to be in a meeting. Twenty minutes later, Khattar's mobile buzzed: "Mr Purwar has 5 minutes, but he has to leave soon. You'll take at least 40 minutes to get here," the man from SBI said. "We're outside your office," Khattar replied, with the hint of a smirk.

The rest, as they say, is history. Purwar recognised Khattar the moment he walked in -- it appears, as the Uttar Pradesh State Industrial Development Corporation chief twenty years ago, Khattar gave the then young SBI general manager a break -- and was ready to do business.

SBI's loans are two to three percentage points lower than the market rates today, and are available in small towns unlike other bank loans. Two-day loan melas in cities like Tirupur and Varanasi saw Maruti sell as many cars on finance as it did in a full month earlier. In just the first three months of the alliance, Maruti sold 7,000 cars on finance.

For a bureaucrat, Khattar has always been different. In 1979, as director of the Indian Tea Board in London, Khattar found most top English tea packaging firms selling inferior grade Nigerian tea as Darjeeling tea -- at that time, India produced 10 million kg of Darjeeling tea, while the world consumed 40 million kg of it.

Khattar started a Pure India Tea Club, where readers who cut out coupons in English newspapers got three free sachets of Assam, Darjeeling and Nilgiri tea. Within months, the club had 250,000 members.

Cricketers Sunil Gavaskar and Ian Botham were roped in to pose at the Oval sipping tea, with the punch line "anything less than the best, just isn't cricket". The direct mail campaign and the lobbying, worked. The UK government mandated that any tea called Darjeeling would have to contain at least 60 per cent of Darjeeling tea.

With the government breathing down his neck all the time and not even allowing him to sack a militant labour union chief, life in Maruti hasn't been quite as easy as, say, turning around the ailing Uttar Pradesh State Transport Corporation, which he headed after his stint at the tea board, where he rose to become chairman.

And the experience of several new models, including the Amitabh-Abhisekh promoted two-car-in-one Versa, hasn't always been happy.

Till today, Khattar bristles when told the Santro sells much more than the Alto. Yes, but combine the sales of all our B-segment cars -- Zen, Alto and Wagon R -- and we sell much more than Hyundai does, is his stock-in-trade.

But a combination of contacts in his former service (Khattar still refers to colleagues by their IAS-seniority) and the ability to look beyond his nose, has helped put this behind. In 1999, along with consultancy firm AT Kearney, Khattar came up with the concept of 33:33:33.

If a customer spent Rs 100 on a car in its lifetime, a third of this was the cost of the car, another third was fuel costs, and the rest consisted of repair costs, servicing and insurance.

Immediately, Operation Vistaar was born and Maruti forayed into financing and insurance. The dealer-service network was also expanded. Today, Maruti Finance gives out around Rs 1,200 crore (Rs 12 billion)a month in financing, while 200,000 insurance policies have been sold since May 2002 by Maruti Insurance.

For most, a runaway success public issue of the kind that Maruti is witnessing, is the culmination of a successful journey. For the 60-year-old Khattar, who despite a trick back, still drives 120 km to visit dealers every time a new model is launched, the journey is far from over.

And yes, he and wife Kiran, still form a formidable couple on the dance floor.

Powered by

More Specials

Share your comments


Copyright 2006 India Limited. All Rights Reserved.