After focussing on the premium segment for almost a decade, Toyota Kirloskar Motor has entered the entry-level sedan market with the Yaris. The mid-size sedan is expected to go on sale by the middle of this year and will compete with the Honda City, Hyundai Verna and Suzuki Ciaz, among others. Akito Tachibana, managing director, Toyota Kirloskar, talks to Shally Seth Mohile about the domestic automobile market and electric vehicles. Edited excerpts.
You are introducing a model in the volume segment after a gap of eight years, what has been the trigger? Aren't you late?
I don't think we are late. This is the best time to introduce the Yaris in the high segment (mid-size sedan) as it is booming now and will do so in the future because a lot of customers in the A and B (entry-level segment) that constitute 70 per cent of the market, will be looking to upgrade. They will like to move out of compact sedan and hatchbacks We want the Etios customers to move up to Yaris. Till some years ago, safety features were identified only with premium cars, the Etios changed that by offering standard safety features. The Yaris will have an automatic variant and therefore will be the best fit for female drivers.
The localisation levels in Yaris will be limited, how will you ensure it gets the desired volumes vis-a-vis the rivals just when the basic customs duty on imported kits has gone up?
If we offer best quality vehicles, volumes will come automatically which in turn will help us localise faster. The hike in customs duty is good as it will prompt us to take faster decision with regard to localisation. We also believe, if we are able to sell the same number of vehicles as rivals we would be able to achieve the same level of localisation.
What kind of segment share are you looking at within the first year of Yaris launch?
Fortuner and Innova are number one in the SUV and MPV segments respectively, Corolla is aiming for it. You can imagine what we are aiming to do with the Yaris.
Is Toyota finally stepping on the gas? Do we see a faster pace of launches?
Unfortunately, we have been weak in the mass segment. Rapid policy changes have harmed us. We need long-term auto policy. Indian market is changing rapidly. The frequent changes have been impacting all OEMs but we were impacted the most by the diesel ban. The next 10 years are going to be critical for the auto industry in India as India catches up with the global standards and becomes global from local.
How do we see Toyota's strategy for green technologies such as EVs panning out?
People misunderstand EVs. Pure EV is an idea of future that will take time. By 2030 India will have 10 million vehicles of which 4 million will be electric vehicles and 6 million will be ICE (internal combustion engine) The objective can be achieved by a combination of electrification of the existing vehicles and pure electric vehicles and hybrids. Hybrids are the most practical and suitable solution for the Indian market and can get us a fuel efficiency of 45 per cent as compared to ICE. Our strategy will be based on the combination of all the three.
Is it a fair assumption that you will wait for the EV eco-system and policy to evolve before taking the plunge?
As you would be aware Toyota has more than 20 years of experience in producing electric vehicles. We learnt a lot in these 20 years. India has zero EV user, it is difficult to imagine who is an EV user, what type of EVs, there are no customers. We need to first get an answer to all these and then develop a suitable EV model. We need all the favourable factors for a successful. Low-cost production system, infrastructure, tax benefits for the customers.