In an ever-changing corporate landscape, where businesses have to fall in line with the international policy framework as well as adapt to changes according to every specific local market, embracing change to be compliant with it calls for a difficult task, but is necessary to shape the future of the organization. When the industry you operate in, the business you are in, not only depend on national or regional policies but international policies also play a substantial role, then you are more vulnerable to change and that change can have a positive or negative impact on you and your business depending upon whether you accept the change and more importantly how you embrace it—positively or negatively and make necessary amends to your policy framework to sail through the storm and come out stronger on the other side.Maruti Suzuki currently the market leader with over 51% market share in passenger vehicle segment in India is continuously denying the fact that automotive industry in India will move over to electric vehicles because of the fact it does not have a proven electric vehicle technology and doesn’t want to shift focus from the present and devote its resource on the same. The fact that, for Maruti Suzuki, which is having a dream run in India, it doesn’t want to disrupt the status quo. The research for Maruti in electric vehicles will require a substantial investment as it is new in the arena with very little research done on electric mobility solutions.
In the current Indian scenario, Maruti will need a new capacity in India every year to compensate for the current growth rate in sales. Despite having highest sales, substantial growth rate and being the company that changed the landscape of passenger vehicle market about 35 years ago in India, it is reluctant to be the front-runner, for whatever the reason may be, in driving the change in the field where other companies are making significant inroads every day. Mr.
R.C. Bhargava, Chairman, MSIL, has repeatedly said it is impossible to completely electrify automotive industry in India and I believe Maruti will definitely face the consequences in long-term if not in near future. Currently, Maruti is sitting on a comfortable couch and pushing its conventional fossil fuel cars developed by the Japanese partner, of course with some changes to suit Indian taste and generating huge chunks of cash. However, the recent announcement of technical collaboration with Toyota to develop electric vehicles is a welcome move but how far they will be able to make an impact on ground level still remains to be seen.
There are many examples when the top management has not accepted the change in policies or in customer requirement and succumbed to huge losses, the recent one being the TATA motors and other Indian commercial vehicle manufacturers not accepting the Supreme Court ban of sale of BS-III vehicles in the country in a hope it will extend it further and they didn’t develop a BS IV technology beforehand and this resulted in paltry sales in April 2017 in commercial vehicle segment. What was the consequence of this? It resulted in a shortage of commercial vehicles across segments and fleet owners wandering at the time when several Indian states imposed underload (condition in which a truck can’t load more than the certified limit) resulting in increased demand for trucks. However, BharatBenz, a brand under Daimler India Commercial Vehicles, took the lead by having a proven BS-IV technology which helped in a somewhat smooth transition from BS-III to BS-IV in commercial vehicle segment and didn’t result in much of a shortage.Another example apart from automotive sector is the recent outcry over GST rollback. However, these were just castles in the air and were nowhere close to being instigated. The business community across India, of course, with the help of opposition parties staged protests and made every possible effort to abandon it.
However, the fact is, the business community in India doesn’t want to move over the status quo, notwithstanding the fact that it will help them in the future. There have been protests from different section against the implementation of GST on the commodities that were earlier exempted from the tax, but, what they need to understand is that these changes are here to stay and they have to find innovative ways to walk through the rough terrain. They need to understand the structure of GST and understand how different benefits can be availed which its structure allows.History is a testimony to the fact that all those who have incorporated the change within their organizations swiftly have benefited greatly and those who have been dawdlers in doing so have eventually died a slow death. Indian corporate houses, to say the least, have a dubious distinction of being last in the queue to implement any changes in the policies but that too is slowly changing.
However, they have a long way to go before they can dictate terms of the industry they are in.