Sanjay Gandhi - Maruti Udyog, India Controversy

Maruti Udyog, India Controversy

In 1971, Prime Minister Indira Gandhi's Cabinet proposed the production of a "People's car"—an efficient indigenous automobile that middle-class Indians could afford. While Sanjay had no experience, design proposals or tie-ins with any corporation, he was awarded the contract and the exclusive production license. The criticism that followed this decision was mostly directed at Indira, but the 1971 Bangladesh Liberation War and victory over Pakistan drowned out the issue. Indira's victory and the Congress's landslide victory in the 1971 Indian general election only left Indira Gandhi more powerful.

Maruti Udyog, today India's premier automobile manufacturing corporation, was founded by Sanjay Gandhi, but the company did not produce any vehicles during his lifetime. A test model put out as a showpiece of progress was criticized. Public perception turned against Sanjay Gandhi, and many began to speculate of growing corruption. Sanjay Gandhi then contacted Volkswagen AG from West Germany for a possible collaboration, transfer of technology and joint production of the Indian version of the "People's Car", to emulate Volkswagen's worldwide success with the Beetle.

The Japanese company Suzuki was also contacted to present the design and feasibility of their car to be manufactured in India. When Suzuki came to know that the Government of India had contacted Volkswagen as well, it did everything to pip the German company in the race to produce India's first People's Car (Maruti 800). It provided the Government a feasible Design of their 'Model 796' (another big hit in Japan and East Asian countries)