Toyota looks at smaller cars to raise market share in India
Japanese auto major Toyota looks to a host of small cars to wrangle market share in India, where it is just one-tenth of Maruti Suzuki, which owns almost half of the market in the country.Updated: Mar 28, 2016 23:48 IST
Japanese auto major Toyota looks to a host of small cars to wrangle market share in India, where it is just one-tenth of Suzuki (read Maruti Suzuki), which owns almost half of the market in the country.
The company, present in India through a joint venture with the Kirloskar group — Toyota Kirloskar Motor — is however manifold larger than Japan’s Suzuki, Maruti’s partner, in the global and Japanese markets.
Akito Tachibana, the newly-appointed MD of Toyota Kirloskar Motor, has said that even though the company does not intent to stay with a 5% market share, it has learned to survive.
“India needs smaller cars,” said Tachibana. “We need more A-segment products… but Toyota doesn’t have them.”
The company will have to figure out how to allocate resources for the development of these vehicles as India is one of the 10 top selling countries for Toyota.
Maruti Suzuki became the market leader in India with its family of small cars. The same formula was used by Korean automaker Hyundai, with remarkable success. Japan’s Honda and Toyota took this path much later.
Honda, which had got left behind in the diesel-engine boom in the country, came up with its Brio platform that has a hatchback, a compact sedan, a crossover and the compact SUV. Toyota entered the segment with its Etios sedan and Liva hatch, developed for India, in 2010, but both lost steam after initial success. Today, Toyota lags Honda too.
“Toyota is really weak in India… Etios didn’t work well,” said Tachibana. Liva has just 2% share in the small car market.
Globally, there are the Yaris subcompact car and the Vios subcompact sedan that can be called upon.
“These are candidates for the India market,” said Tachibana. Before they make way to India, however, they’ll have to be tweaked to suit the domestic market.
Toyota is also planning to revamp the Etios family, though Tachibana was reticent on whether this would be a complete makeover, or mere minor enhancements and changes.
There will be no India-specific products, though. With the implementation of the stricter BS-VI norms in 2020, India will have already come closer to the global market. So, the products will be global products, even if it means more small cars. With that, “we can hope to finally increase our volumes,” said Tachibana.
Toyota may also try to strengthen its portfolio with Daihatsu, which is known for small cars, and Toyota will fully acquire it by mid-2016. N Raja, head of sales and marketing at Toyota Kirloskar, had earlier said it will bring the Japanese brand to India in three-four years.
First Published: Mar 28, 2016 23:47 IST