The Automotive Industry in India – from independence till the modern era.

  1. You should not meet your heroes. You risk disappointment.
  2. If you have to see further, it is by standing on the shoulders of giants.

Don’t go there, for you will leave with less respect than when you arrived. But go there you must, because you need to peek into the future. Quite a conundrum, I figured. I should find out more. In the words of Danish philosopher Soren Kierkegaard, “Life can only be understood backwards; but it must be lived forwards.”

This story begins sometime in early post independent India.

In the mid-1950s, with the unabashed and dedicated execution of Nehruvian socialism, the command & control style was preferred method of implementation for economic development initiatives. These were centered around the redistribution of wealth from the haves to the have nots. Years of misrule, and historical inequities had left the masses in penury while there was a privileged class of conspicuous consumers. We all remember the stories of the Maharaja of Alwar using Rolls-Royce cars for garbage collection. With the abolition of Zamindari, the landless peasants were now landed. Income taxes were at all-time high, in many cases the Income tax and Wealth tax together were greater than 100%.

Efficient redistribution of available resources was perceived to be effective, the govt was Robin hood. The abolition of the privy purse meant that “the rich” were no longer as rich as they were before. Consequently, the consumption of “sin goods” such as cars which were almost exclusively imported, was on the decline. With an aim to provide employment to the masses and further promote equitable distribution of wealth, licenses were granted to some select companies to manufacture and sell automobiles exclusively within India.

A handful of these companies were in a privileged position, if you had the license you could make & sells cars in India. If you didn’t have a license, you were forced to exit the market. There could be no better opportunity for anyone who sought to build a self-reliant India. Companies such Tata (Telco – Tata engineering & locomotive company), Ashok Motors (later Ashok Leyland), Premier Automobiles, Mahindra & Mahindra, Hindustan Motors and Standard Motor Products had the entire playing field to themselves. A slew of partnerships was formed with the high & mighty automotive corporations of the world. Tata partnered with Mercedes Benz (TMB), Mahindra with Jeep, Standard with Triumph, Hindustan partnered with British Leyland (Morris Motors) and Premier Automobiles with FIAT.

The hope was that they would localize or assemble vehicles for the Indian market, through these partnerships. There would be a flood of options for the consumer, and this competition would make cars more affordable while improving demand. (deja-vu moment – Aatmanirbhar Bharat, Production linked incentive schemes of India today are visionary schemes never seen in India before)

As all of these companies geared up for good times, there was one significant hurdle to overcome.

The number of vehicles produced/sold, their price and specification would be dictated by the govt. Even small changes to the vehicles had to be approved, and all of them needed to have increasing local content as the years went by. With stifling quotas and very high prices, only the very privileged who could afford cars (Govt. Babus – cars were limited to IAS elite, rich businessmen, successful doctors, contractors & industrialists) were the only paying customers for new cars. There was a thriving black market for these bookings and allotments, second-hand prices were unreasonably high. A view could be that the Babu-dom which was tasked with the job of implementing the commandments of their erstwhile British overlords were very busy building their own fiefdoms within this walled city they created.

Even today, license raj is remembered by many an industrialist as replacement of the British by the IAS officer. Their powers were absolute, discretionary, draconian and unquestionable. The last remnants of this archaic structure can be seen in the multitude of govt approvals needed to do just about anything in our country. In reality, The Indian Boilers Act, The Shops and Establishment act and the various quasi-scriptures that were the axes wielded by the babus were responsible to kill the goose that would lay the golden egg. This laid the foundation of endemic corruption that is the bane of the bureaucracy in India. Want to do something? There is a price, if you don’t pay, we will throw the rule book at you! When the British ruled India with these diktats, it was unfair, when we do it to ourselves – I do not know what we should call this, but I digress.

The middle class, right from the 1950s’ till Maruti in the mid-1980s, could never aspire for a car. The best you could do as a middle-class salaried person was to book a scooter, and wait 8-10 years for delivery. The specification and price of this scooter would be decided by the govt., many times the color would be decided by the availability of allotted stock to the dealer. In this over regulated economy, there was little room for innovation, dinosaurs could thrive as there was no evolution, or was it not as bad as it was made out to be? Enter the Bajaj scooter – in collaboration with Piaggio, Lambretta was another fringe player. Details on this can be another story in itself.

The Indian car industry till the entry of Maruti in the 1980s is much like the Chinese Internet, it has its own rules & many a large creature which would have not existed otherwise thrives here. The intent of this entire story is not to judge the politics of this, but to get to know these cars. Yes, they shouldn’t have been around for as long as they were, but they did have a defining influence on what an entire generation of Indians expect from cars.

Here are some period correct reviews of the vehicles which were made for their home markets (UK, Europe) & became ubiquitous in India during the License Raj.

I’ve chosen 3 vehicles whose success has set the formula for how to get things right in the Indian car market. Two of them went to one become almost the only available cars for an entire generation of Indians, the Hindustan Ambassador and the Premier Padmini.

Hindustan Ambassador
Premier Padmini

Trim levels and small feature updates would come with time, but right from the mid-1950’s till the early 1990’s these vehicles would remain in production essentially unchanged except for material updates to facilitate localization, or feature updates to manage regulation.

Baby Hindusthan

The other was a small car, a hatchback well ahead of its time. It has previewed the features, the engineering and the dimensions which have somehow found their way into the modern definition of India’s small car. This car, the Morris Minor, was produced by Hindustan as the Baby Hindustan!

I will end with this leg of the story with the car that literally upset the apple cart. It was leagues ahead of the market, and it the consumer just loved it! Credit where it’s due, it was the Indian Babu who dreamt up Maruti, a made in India for Indians car for the masses, a Volkswagen story of sorts. The car that revolutionized the Indian Auto Industry & stormed us into the modern era in one sweep, the Suzuki SS80 or Maruti 800, needs no introduction to any Indian today. This too was a car built by a manufacturer who wanted to gain market share in the booming mini-car segment in Europe in the 1980s, it is almost like the two markets are joined at the hips.

Maruti 800

Needless to say, the reviews/images are property of respective copyright owners, credit if any to me is only for scrounging the internet to find it. The whole story, putting together the pieces are the contribution of this author.

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