Toyota Gears Up To Raise Qualis Price-Tag

Toyota-Kirloskar Motor Ltd is likely to increase the price of the base model of Qualis, its newly-launched multi-purpose vehicle, soon.

Toyota-Kirloskar managing director Sachio Yamazaki told Business Standard that once the customers become familiar with the Toyota brand name, the company will increase the price of its base model which is priced around Rs 4.5 lakh. "We wanted our customers to try a Toyota at an attractive price," Yamazaki said. He said the `touch & try' campaign had been able to woo a large number of customers. Yamazaki said the marketing strategy was backed by a strong product, was economically priced, safe and comfortable.

 

He said the Indian customers look for a utility product which was competitively priced. "We have been able to provide them such a product through Qualis," Yamazaki said. He said Qualis was slotted as a passenger vehicle and not as a commercial vehicle.

Yamazaki said the existing plant will be further expanded with an investment of around Rs 60 crore. He said the dealer network too would be expanded to around 23 by next year. He said because of the increase in bookings, the vehicles could no longer be made available `off-the-shelf'. "We have already delivered around 1,000 so far and to increase production, we are doubling the shift," he said.

Yamazaki said nearly 60 per cent of those who had bought Qualis opted for the finance scheme. Toyota-Kirloskar has floated a financing arm called Toyota Financial Services in association with Citibank for retail financing for Qualis. Worldwide, Toyota already has a tie-up with Citibank for retail financing. Toyota will also have regional tie-ups with ICICI, Countrywide and Kotak Mahindra among others for retail financing. During the first year, the company had targetted at a production of 20,000 MPVs, by the second year, around 30,000 MPVs and by the third year, around 40,000.

As per the investment pattern worked out by Toyota Kirloskar Motor Company, during the first phase, its investment in the vehicle project would be around $170 million, in the second phase, between $400 million-$700 million and for each subsequent model around $ 400 million.

This would be on a capital of Rs 6,000 crore. It expects to recover all its costs from its investment in the multi-purpose vehicle (MPV) by the sixth year of its operations. The target for localisation has been set at 55 per cent in the first year which would be more than DGFT guideline of around 50 per cent to be achieved in three years. The company expects to achieve localisation of 70 per cent within the stipulated time frame of five years.