Realising the vulnerability of product gaps in its range, Toyota Kirloskar Motors has started work on two new projects, aimed at products that have never been a part of its portfolio. One is on a new compact sports utility vehicle (SUV), positioned under Rs 10 lakh, cheaper than Toyota’s only utility vehicle offering, the Innova, under that price bracket. The new SUV will also target markets abroad.
US-based Ford Motor Company did a similar thing in developing the EcoSport, this country’s largest selling five-seater SUV, under four metres. This small SUV is also produced and sold in Latin America, Europe and elsewhere in Asia.
|EXPANDING THE WINGS|
Seniors from Toyota’s headquarters in Japan have begun visiting India to understand the local tastes and product requirements. A similar exercise was adopted when it developed its first hatchback, the Etios Liva, and the Etios sedan.
Beside the EcoSport, this new Toyota vehicle will compete against yet-be-launched SUVs from Hyundai Motor, Maruti Suzuki, Honda, Mahindra & Mahindra, Volkswagen, General Motors and Renault. All these are expected over the next two to three years. With an average monthly volume of 4,400 units, sales of the Ford EcoSport have grown 18 per cent so far this financial year.
Toyota is also working on a sub-four metre compact sedan, which might share its platform with the SUV mentioned earlier. This new one will compete against Maruti Suzuki’s volume generating Swift Dzire, Hyundai’s Xcent, Honda’s Amaze and the recently launched Tata Zest. It is to be priced below its bigger cousin, the Etios.
Like the compact SUV segment, this compact sedan segment has also grown a lot quicker than the rest of the market in the recent period. Monthly volumes here are 30,000-35,000, growth of 10-15 per cent. At least half of this market is controlled by Maruti’s Dzire.
N Raja, senior vice-president and director of marketing & sales at Toyota Kirloskar said, “What we are requesting our parent company is a plan to hold the customer for life. I have the entry segment where we have the Etios and Liva. Then, the the next segment, where we have the Corolla. There is a gap in between. One opportunity is to get a sedan in between or the popular demand is the compact SUV. The compact SUV will be a good step for us because from there, I can move the customer to the Innova and then to the Fortuner."
In 2013-14, according to the Society of Indian Automobile Manufacturers, volumes at Toyota dipped 22 per cent to 128,811 units, when the industry reported a fall of six per cent.
In the 11 months ending February of this financial year, the Bengaluru-based company managed to beat the industry, with growth of six per cent, selling 128,014 units, against growth of four per cent for the latter.