Maruti Suzuki, India’s largest and best-selling automaker, has achieved a historic milestone by crossing Rs. 1 lakh crore in revenue, making it the first vehicle manufacturer in the country to do so. The company now holds the 28th position in global rankings, with Volkswagen holding the top spot with a revenue of 293 billion. RC Bhargava, the chairman of Maruti Suzuki and a former IAS officer, played a pivotal role in transforming a government experiment into a global success. Let’s learn more about RC Bhargava and his contributions to the company.
In a 2015 interview, Osamu Suzuki, the owner of Japan’s Suzuki company, credited RC Bhargava as the key to their success in India. He acknowledged that the company wouldn’t have achieved its success if it weren’t for Bhargava’s fairness, integrity, and ability to make the right decisions. Suzuki recognized Bhargava as a crucial player in their Indian operations and attributed the company’s growth in India to his leadership.
In 1982, the Indian government sought a partner for a joint venture to create an affordable car for the masses, in tribute to Sanjay Gandhi. V Krishnamurthy and RC Bhargava were tasked with finding a partner. Despite the reluctance of other foreign companies due to India’s socialist tendencies, they successfully convinced Suzuki to join the project, against the advice of his advisors.
According to Forbes, Maruti’s success is attributed to its ability to maintain low costs. This accomplishment is credited to Bhargava, who collaborated closely with India’s emerging auto component industry and assisted in enhancing its quality while also keeping expenses low.
Who was Bhargava, and his Background?
RC Bhargava was the youngest of his four brothers. His father, who was a paper technologist at the Forest Research Institute of Dehradun, invested heavily in his children’s education. Bhargava attended the renowned Doon School, and in 1950 he studied science at Allahabad University where he became a topper. He was also a keen sportsman with interests in squash, table tennis, and cricket, according to his classmate Naresh Chandra, an IAS officer, who spoke to Forbes in 2015.
After graduating, RC Bhargava topped the UPSC exam and became an IAS officer in 1956. He worked as a secretary in the Ministry of Water and Power from 1974 to 1977 and was the founder-director of NTPC. Krishnamurthy was impressed with his work and offered him a position at Maruti. However, Bhargava found his work at the Cabinet Secretariat to be dull. In an interview with Forbes, he explained that good ideas would be dropped if even one person opposed them, as the focus was on consensus-building for everything.
In 1981, Bhargava joined Maruti as the company’s third employee on a one-year deputation. However, the government refused to extend his deputation, leaving him with a difficult choice to make: either drop the company he had founded or his IAS career. Despite being a top-performing officer with the potential to become the Cabinet Secretary, Bhargava resigned from his IAS position. One of the reasons behind his decision was the significantly low salaries offered to IAS officers at the time.
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At the time of his decision, RC Bhargava was 48 years old and earning a salary of Rs 2250 as an IAS officer, with pensions being even lower. He and his wife were facing financial difficulties, so he made the tough choice to quit the IAS in 1982 and become the full-time director of the Maruti-Suzuki joint venture. After V Krishnamurthy, Bhargava became the managing director of the company until 1985, and eventually retired in 1997. Despite this, he still serves as the chairman of Maruti Suzuki at the age of 88, remaining closely involved in the process of product development, cost-effectiveness, and other areas of the business. Today, he lives in Noida and enjoys playing golf.
During a 2022 interview, he revealed that despite experts predicting that Maruti Suzuki was destined to fail, the company managed to succeed due to its deep understanding of the Indian population’s aspirations.
According to him, Maruti’s inception was incidental, and not a deliberate move. He mentioned that it was Sanjay Gandhi’s dream to create something that would be dear to the hearts of the people, and the project was a tribute to him.
Initially, Suzuki was hesitant to put in 40% of the equity in cash, and it took several rounds of negotiations before he agreed.
According to reports, Bhargava’s annual salary is Rs. 1.5 crore, and in 2017, he received Rs. 99 lakh.