Toyota banks on Maruti to stay in key segments



The masses and the classes are spectral ends too wide apart for a Japanese carmaker to straddle in India, and Toyota seems better off relying on the leader Maruti to retain its identity in the more competitive segment of the layered and complex home market.

Toyota Kirloskar has exited the sub-10 lakh segment here, having mothballed Etios and Liva. Instead, it sold about 20,000 units of Glanza sourced from Maruti and will be adding its own version of Vitara Brezza and Ertiga during the course of 12-18 months, helping match the 2019 sales of 1.25 lakh units this year.

The compact SUV based on Vitara Brezza is likely to hit the roads in the second half of 2020, followed by the Ertiga version of Toyota – 6-8 months after the introduction of SUV, say people in the know. Toyota and Suzuki have entered into a global alliance in 2017 and India is at the center of this partnership

Last year, Etios and Liva accounted for a monthly volume of about 2,000 units, which over a period of time has been compensated by Glanza (a rebadged Maruti Suzuki Baleno) that averaged around 2,200 units a month. The SUV and MPV, sourced from Suzuki, could help expand volumes multi-fold.

Naveen Soni, Senior Vice President, Toyota Kirloskar Motor, declined to comment on a specific product but said that the company plans to expand the product line-up in a sustainable and phased manner.

“We believe that important alliances such as ours will pave the way for the introduction of competitive and cutting-edge products and technologies in India, giving customers varied choices of products to meet their ever-growing expectations. The partnership complements each other’s thrusts on new technologies from the futuristic world of alternative and connected technologies that could drive the next generation of passenger vehicles,” added Soni.

The company said the auto industry has been passing through a rough patch and the shift towards BS-VI emission norms too was not that easy. Toyota believes that the next few months may turn out to be highly volatile and challenging for the auto industry.

"The industry growth is most likely to pick up by the third quarter, as consumers would take time to accept the new BS-VI technology, and the associated costs," he added.

To cushion the price increase on account of BS-VI emission norms, the company has decided to adopt a stepwise price increase for diesel vehicles. It has only passed on 50% of the cost increase to the customers.

Under BS-VI, the company has already reached monthly bookings of new Innova. The company's manufacturing plant has completely transitioned to BS-VI emission norms and despatch of all BS-VI vehicles has begun by the end of January 2020

Even as the demand comes back, the company will focus on expanding the number of customer touchpoints with special emphasis on service outlets including mobility solutions, like leasing for hassle-free users experience and digitize sales operations in dealer outlets.

The company will be conducting online promotions to specifically appeal to millennial customers and continue to work toward introducing innovations and technologies in new models.

News Source: Economic Times, Url: https://bit.ly/3a0HZtY

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