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Maruti was called upon to take a difficult decision soon after the first bookings had been made. The pick-up truck, a purely commercial vehicle that was part of the original project along with the 800 and the van, got a very poor response—bookings of just 2,000. In the project report, the pick-up truck was expected to account for 20 per cent of total production. The booking response showed that the customers did not want this vehicle, and manufacturing it in small volumes would not be viable. The company realized it had made a serious error of judgement in not recognizing that petrol-driven commercial vehicles could never compete with diesel-driven ones, as the government-determined price of diesel was much lower than petrol. SMC had estimated that the pick-up truck would be very successful because of good experience in other Asian countries. In Pakistan, it was used for rural transport, after being fitted with a canvas top, and sold in large numbers. However, India had a vehicle called the Tempo, which carried a load slightly more than the pick-up truck and ran on diesel. The highly value-conscious Indian customers immediately realized that the pick-up truck would always lose out to the Tempo, because of the Tempo’s lower operating costs. Realizing that the truck would be a failure, Maruti decided to drop its production and to write off the costs incurred till then in tooling and other related activities. This experience was a reminder to Maruti on the importance of correctly assessing the behaviour of Indian customers, and the dangers of transferring experience of other countries to India, without careful examination.
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R.C. Bhargava (The Maruti Story)