Centre, states must lower car ownership cost: RC Bhargava

A former civil servant, R C Bhargava is the chairman of the country’s largest carmaker Maruti Suzuki and unarguably the most-experienced top-ranked automobile professional in India. Involved with Maruti right from the time Japan’s Suzuki entered India in the 1980s, Bhargava feels the government needs to handhold the industry by driving in affordability. Covid, he says, will help boost risk management systems…

How far have you achieved normalcy in business? What are the specific challenges?
During the past three months, production has risen steadily but is well behind 2018-19 levels. Sales has increased monthly, but lags 2018-19. We expect steady progress as we go ahead. It’s a challenge to predict the situation after a few months. The concern is, like in 2019-20, about demand till such time as the economic growth rate and GDP go beyond the levels of 2018-19, or the customer cost of acquisition of cars falls.

How much cost increase are you grappling with?

Compliance with all the safety protocols relating to the pandemic naturally resulted in some extra costs. Expenditures were also incurred in treating employees, paying salaries when there was no work, etc. However, there were also cost savings from new working procedures and overall there was no significant impact on the company’s finances, other than that resulting from loss of production and sales.

How are you dealing with your employees?
The company has refrained from any situational reactions for remuneration. Last month, bonus for the previous financial year was paid to all employees. A salary increase for unionised associates has been announced. All jobs offered during campus recruitment have been honoured and employees on-boarded.

How can the government help?
Given the importance of this industry, central and state governments should consider measures to increase demand by lowering the acquisition cost of cars by consumers.

Learnings from working during the pandemic?
Use of technology and digital systems has grown rapidly and will stay as they lead to greater efficiency and save cost besides increasing convenience. A great deal of commuting time in travelling and attending meetings can be saved. There have been good learnings in the area of safety and hygiene, which should be of benefit at homes also in the future. Risk management systems will become more robust.