Vikram Kirloskar, vice-chairman of Toyota Kirloskar Motors, who died on Tuesday at 64, deserves credit for reintroducing Toyota Motor Corporation to India.
Toyota Motor Corporation (TMC) made its initial attempt into India before liberalisation, partnering with the Delhi-based company DCM in 1983 to build medium and light commercial cars. According to government regulations, TMC could acquire only 26 per cent interest in the joint venture, with DCM holding the other 74 per cent. However, its joint venture with TMC was short-lived due to conflict management between the partners or product discrepancies.
Toyota withdrew this business in the mid-1990s after DCM opted to divide the equity with Daewoo, a South Korean automaker, to build passenger cars. Toyota initiated negotiations with the Hindujas, a multibillion-dollar corporate house headquartered in London that owns Ashok Leyland, a medium and large commercial vehicle maker. However, the negotiations failed, likely due to the Japanese automaker’s desire for majority ownership in the joint venture.
Looking for alternatives
The search for an alternative Indian-based company recommenced. The Tatas were shortlisted this time, but the deal did not proceed because the company demanded majority control. The Tatas ultimately established their passenger automobile division under their group firm, Tata Motors.
After conversations with several corporate entities, Toyota opted to sign a contract with the Bengaluru-based Kirloskars. TMC chose the Kirloskars as its joint venture partner for a number of reasons. As a Japanese corporation, TMC was known for its extreme conservatism, and its manufacturing technique was renowned worldwide. The Kirloskars achieved a comparable status in the marketplace.
These characteristics were exemplified by the soft-spoken Vikram Kirloskar, a graduate of the Massachusetts Institute of Technology (MIT) and a fourth-generation scion of the Kirloskar Group. He became the vice-chairman of the joint venture and was responsible for developing a good relationship with TMC.
Bidadi, Karnataka plant
In 1997, Toyota Motor Corporation and Kirloskar Systems formed a joint venture, with Toyota Motor Corporation owning 74 per cent and Kirloskar Systems the remaining 26 per cent. The plant in Bidadi, located approximately 90 km from Bengaluru, began production of the JV’s first passenger model, multi-purpose car Qualis, which was a huge success. The JV’s subsequent passenger car models succeeded exceptionally well in the market.
Former vice-chairman of Toyota Kirloskar Motors, Shekar Viswanathan, told The Federal Vikram Kirloskar was one of the best men he had known, and his passing away was one of the saddest days in his life.
Currently, Kirloskar Systems owns 11 per cent of the joint venture with Toyota Motor Corporation, which holds the rest. It remains to be seen how the JV will pan out in the future with the demise of Kirloskar.
Kirloskar held the distinction of being the president of both CII and SIAM at different times. He is survived by his wife Geetanjali, and daughter Manasi, who is married to Neville Tata, son of Noel Tata, the CEO of the retail giant Trent, and Ratan Tata’s half-brother.