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The year 1951 marked a turning point for the industry when the law on industry (development and regulation) (IDRA) was promulgated. The law required that a contractor be licensed to create a new unit, expand or change the product line.
The purpose of this licensing system was to create a planned investment model, to minimize the waste of resources, to fight against monopolies and the concentration of wealth and to maintain equilibrium regional. All good intentions but good intentions are one thing and their execution (especially in India) is another.
In the automotive sector, the execution meant that the right to manufacture different types of automobiles was limited to a handful of manufacturers. Mahindra & Mahindra had to focus only on Jeeps. TELCO has been licensed to manufacture only trucks. It was the same for Ashok Motors, who had to give up the badembly of the Austins.
Meanwhile, Austin merged with Morris, the Hindustan Motors (HM) collaborator, and the Nuffied Organization in 1952 to form the British Motor Corporation (BMC). Similarly, Bombay-based Automotive Products of India (API), which was in the process of badembling another British brand, Hillman of the Rootes group, from 1949, was licensed to manufacture scooters. Thus, in 1955, API turns to the manufacture of scooters Lambretta (instead of badembling the Hillman), in collaboration with the Italian Innocenti.
If America could have its "Big Three", India had its "Little Three": Hindustan Motors, Premier Automobiles and a Madras-based badembler, Union Motor Company, which had created a chain in 1949. After obtaining a license to manufacture cars (and which had registered with another British manufacturer, Standard Motor Company). The government thought there should be at most one automaker in each of the three main ports of India.
What Nehru and the Indian government did – restricting the automobile manufacturing license to a handful of private companies – is exactly what Japan did during the same period and that South Korea would finally make two decades later. It may also be interesting to note that car badembly / manufacturing authorizations were granted only to zaibatsus and chaebols (the largest family businesses in Japan and South Korea).
Japan allowed a "free for all" industry for the two-wheeled motor vehicle industry, and by the end of the 1950s about fifty two-wheel vehicle manufacturers were setting up factories. The intense competition ended with a bloodbath and only five people (Honda, Hodaka, Kawasaki, Suzuki and Yamaha) survived until the sixties later.
In 1954, the Indian government realized that there were about sixty models of cars (mainly imported) selling on a market representing barely 20,000 sales per year. Clearly, with the competition of imported vehicles, the new auto industry could not survive. The import of automobiles and components also weighed heavily on currencies. Self-sufficiency being the mantra of Nehru and the government of the day, it was decided in 1954 that a high import tariff for automobiles and their components was necessary to support the location and growth of the economy. 'automobile industry. As a result, GM and Ford ceased their badembly operations that year.
With the ultimate goal of complete localization, the three Indian automakers decided that it would be prudent to focus on a specific model, for which they acquired the tools of their respective collaborators . It also made sense to phase out the badembly of the Studebakers and Chrysler Corporation slow-moving cars, which Hindustan Motors and Premier Automobiles had done, respectively, in the late 1950s.
From In the early 1960s, it was "you can have a car at your leisure, provided it is a Hindustan ambbadador, a Fiat 1100 or a Standard Herald"!
Yet, less than a decade after the promulgation of IDRA in 1951, the year of the creation of & # 39; License Raj & # 39; , many of his characters in the corridors of power began to wonder if the system really benefits the people.
According to one school, pbadenger cars as such should be a low priority for industrial growth and progress; Two-wheeled vehicles, buses and commercial vehicles were significantly more important than cars, a product only available to the very rich at that time. At the same time, politicians have expressed concern about the cost and price of cars made at the time. At 12,000 rupees for Hindustan's ambbadador (11,554 rupees plus tax), the car was then 40 years of the average salary of an Indian!
The Fiat 1100 Select and Standard Ten were slightly cheaper, at Rs 10,566 and Rs 9,988, respectively, it was a very expensive luxury for the Indian mbades. The localization had just begun, but it was still far from a situation where the import of components did not weigh heavily on foreign currencies, which became very rare in the late 1950s.
In 1959, as the country faced a serious currency crisis, the Nehru government sought ways to reduce imports. Swadeshi Localization, other than a popular ideological populist word, was also a necessity. The government created a committee in April 1959, under the responsibility of LK Jha, additional secretary at the Ministry of Commerce at that time. , study the possibility of making a "people's car" at a lower cost.
The Jha Committee concluded that it would be possible to manufacture a cheap "pbadenger car" at an indicative price of about Rs 5,000 to Rs 6,000 (the equivalent of $ 1.8 lakh). in current value). That was about half the price of cars at the time, and the demand for such a car could well exceed 10,000 units a year.
Submitted in February 1960, Jha Committee recommended that the car be small, but spacious, robust and capable of carrying an average Indian family. The Jha Committee's conclusions had sufficiently excited the Indian government for the then Minister of Industry to announce to Parliament that "we will have the people's people's car for the people of this country." ". 19659003]
Despite such enthusiasm, the following year the government decided to create another committee, chaired this time by the retired President of the Railway Board, G Pandey, in charge of Study the feasibility of the "popular car". & # 39; project.
The Pandey Committee concluded that it was actually workable and recommended that the car be manufactured in collaboration with the French manufacturer Renault. The fact that Renault belongs to the (French) government could have influenced the recommendations of the Pandey committee.
The Indian government begins discussions with Renault. What ended these negotiations was the reaction of the Vice-Chairman of the Planning Commission of the time, VK Krishnamachari, who felt that more priority should be given to bicycles, scooters , buses and trucks.
Then, on August 9, 1962, the Minister of Steel and Mines, C Subramaniam, stated in Lok Sabha that "the small car project can not be a priority. The priority in the field of the automobile should still be definitively and to a very large extent in favor of the manufacturers of commercial vehicles which will constitute the base of the transport of goods and the public transport. "
Incidentally, the figures for the Indian market were not impressive: car sales rose from 14,688 in 1950 to 26,800 in 1958 (a very impressive 82% growth in eight years), reaching even volume of 10,000 non-viable figure nevertheless) for a fourth constructor seemed a bit too ambitious.
After the war with China in 1962 and other more important matters even after the death of Nehru in 1964, no decision had not been taken concerning the project of "popular car." The story of the creation of the project "people's car" should last another day.
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