The Maruti - Suzuki Conflict

However, the scenario changed in 1981, when the GoI itself entered the car business by establishing MUL by acquiring the assets of Maruti Ltd.⁶ In October 1982, the GoI signed a licensing and joint venture agreement with SMC where in Suzuki acquired the 26% share of the equity.⁷ Suzuki's history dates back to 1903, when Michio Suzuki founded Suzuki Loom Works in Hamamatsu in Shizuoka, Japan. For the first 30 years, company focused on the development and production of complex machines for Japan's silk industry. In 1937, the company diversified into building cars and in 1939 began manufacturing cars for the Japanese market. But due to the Second World War it had to stop the production of cars and concentrated on the manufacture of the looms.

In 1954, the company changed its name to Suzuki Motor Co. Ltd. and was by then producing around 6,000 cars per month. With 57 production centers all over world, its manufacturing and assembly network expanded to over 26 countries all over the world. Company established 22 automotive manufacturing facilities in 17 countries. Suzuki's vehicles were sold through 134 distributors in 175 countries. By March 2001, Suzuki's net sales were ¥ 1,600, 253 billion and it was one of the top 5 automobile manufacturers of the world. MUL manufactured passenger cars at its factory in Gurgaon, Haryana with an installed capacity of 350,000 vehicles. The first product, Maruti 800 was launched in 1984. Consumers hitherto without any choice rushed to buy the vehicle. Maruti 800 earned the tag of being the 'people's car...'