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Old 16th April 2014, 11:28   #76
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Default Re: Shocking! Toyota India admits defeat in the small car segment

Forget the hatchback segment, they need to get some new engines on the Corolla too. The petrol engine is refined, no doubt about that, but a turbo-charger should be on it.

Also, the 1.4 L Diesel mill is just plainly pathetic for a D segment car. All other cars have a 2 L engine (barring Elantra) and most of them have a output above 130 BHP. The 87 BHP mill doesn't suits the car.
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Old 16th April 2014, 11:30   #77
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Default Re: Shocking! Toyota India admits defeat in the small car segment

I wish companies like Toyota, Honda and VW stick to products that start from Premium Hatchback secgment. People have certain expectations on quality and performance from these brands irrespective of the price points. As proven so far, it has been a losing battle for these brands against Maruti and Hyundai. I believe eventually more and more people will move towards the premium segments and these brands would stand to gain in the long run.

Last edited by altius : 16th April 2014 at 11:31. Reason: adding more content
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Old 16th April 2014, 16:59   #78
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Default Re: Shocking! Toyota India admits defeat in the small car segment

People keep talking about the reliability of Toyota. Agree, its a reliable car, but Maruti and Hyundai are equally reliable for me. In last 20 years, we had 4 Maruti's in my house. Currently we have more than 10-12 Maruti's & Hyundai's in the close family. I am happy to say that, all cars are very reliable & never has any problems. Never disappointed us in between the road.

Coming back to Toyota, what they launched, Liva is just a piece of boring design. Hardly anybody like the cars looks. Interiors are pathetic to look at & quality is also cheap. To add to it, Look & feel is also really bad i must say. With all these, how can one expect to succeed in market? Whatever they admit is truth only. Toyota has a Taxi image more than a personal car.
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Old 16th April 2014, 17:08   #79
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Default Re: Shocking! Toyota India admits defeat in the small car segment

The indian market is a tough one to crack but those who have managed that have been rewarded pretty well for their efforts. Toyota can do it if and only if they can design and kit their cars better. I don't want to be paying top dollar and ending up with a car looking really dated(dated designs with class are different) and the interiors, not very inspiring.
A.S.S: - good
Showroom exp: good
Car by itself: Not very appealing but it makes sense getting one.

Inspite of the smiles package(did i get the name right?) the liva doesnt seem to be selling really well. Redesign and give it a young face and you'll see the car raking in the volumes.
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Old 16th April 2014, 17:43   #80
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Default Re: Shocking! Toyota India admits defeat in the small car segment

Thinking broadly, reliability is one of the deciding factors when you are going for a C or above segments because you are already spending about 10 lakhs plus and would not like to see frequent issues. This is what Toyota provides and so I believe it is able to make inroads into upper segments.

While coming to the lower segment cars, the cars cost less relatively and more over the 'features' and 'styling' takes the priority over 'reliability'. Also, the spares cost much lesser than the upper segment cars, so the further pinching is not felt that much.

Adding to this, most people selecting D segments cars would have already topped out on their financing (upper middle class) and would not like to spend further on costly spares, high service costs etc.

Therefore, in my opinion, Toyota would be in a position to play a better game in upper segments rather than built to cost segments.
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Old 16th April 2014, 20:30   #81
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Default Re: Shocking! Toyota India admits defeat in the small car segment

I think this is a good lesson to be learnt by not just Toyota, but also other manufacturers about the Indian market. They need to understand that while the Indian customer cares a great deal about the brand, he also wants a stylish & a feature rich product.

Toyota thought that their brand name would help them pass off a lazily styled product like Liva & Etios. I think this semi-failure of these 2 vehicles would prod them to design better styled vehicles. It's the same reason why Tata might have a hit on their hand with Zest & Bolt (provided, they manage to get a niggle-free product right out the door).

I had test driven the Etios when it was launched & even at that time I felt that the Indian market isn't going to take kindly to the droopy style of the Etios & I have been proven right.



While I agree to an extent with you that Toyota probably would be happy to maintain their fat margins on Innova & Fortuner and would probably not want to compete in the slim-margin volume car segment, I do have a counter point.

The fact that brand loyalty matters a lot. If someone has had a good experience with an i10, for their next upgrade, they would first look at what Hyundai has for the upgrade. If the vehicle looks stylish & is feature rich, they usually tend to gravitate towards the familiar brand. I'm unable to source it, but there was an article somewhere on the web which mentioned when the Japanese car brands launched Lexus & Acura premier brands in US, their first batch of customers was those looking to upgrade from a Camry or a Civic.

Can Toyota afford to classify themselves as a faux-premier brand in India by ignoring the mass-market? I'm not so sure of that.

Quote:
Originally Posted by scopriobharath View Post
My analysis is that it is not that Toyota cannot make a small car and price it on par with Hyundai or Honda or Maruti, rather it is they do not want to.

The real fact is that since they started with Innova / Qualis and saw, say a 50% profit on each UV sold, They want to see the same profit on each etios or liva sold. Toyota Management is already used to see figures of profit at 50ish percentage and seeing a 20% profit for Liva or Etios simply does not digest with Toyota Management.

With Innova and Fortuner flying out of the showrooms, they are not much keen on the lower segment. They already are planning to push Innova and fortuner prices closer to the 2 and 3 million mark respectively and want to position themselves as a premium brand. They do not want to be selling Small cars.

This would be my view on the decision.
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Old 16th April 2014, 21:03   #82
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Default Re: Shocking! Toyota India admits defeat in the small car segment

Is this the reason behind the (continuous) price hikes for the Fortuner & the Innova?
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Old 16th April 2014, 21:22   #83
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Default Re: Shocking! Toyota India admits defeat in the small car segment

I think its Toyota’s organizational policy that plays a role here. Internationally, Toyota is a much bigger player compared to Hyundai and Suzuki and the company’s expectation of profit margin per car might be much bigger compared to others. To meet that profit margin, they have to put lousy interiors and outdated design on their cars. If they change their strategy, they may be able to crack the situation.
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Old 16th April 2014, 21:24   #84
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Default Re: Shocking! Toyota India admits defeat in the small car segment

Well, pretty sharp reactions coming in quite quickly. One shouldn't be surprised at all. When Toyota launched Etios twins, with prices in range of ,the Swifts and i20s, the manza,etc, it was game over itself. Problem wasn't the pricing, it was the product itself. Agreed, the are easy to maintain, but they are too bland for the competition. Heck, even a Figo, which is based on older platform, looks better. Honda did a stellar job with Brio. They should have looked at Honda.

Toyota's have always been a bit overpriced, the only thing going for them was reliability and after-sales. Lack of competition played its part. But now its going to be tough for them. Maybe next gen Etios will do the trick.
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Old 16th April 2014, 21:27   #85
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Default Re: Shocking! Toyota India admits defeat in the small car segment

Quote:
Originally Posted by Desi Dybuk View Post
While I agree to an extent with you that Toyota probably would be happy to maintain their fat margins on Innova & Fortuner and would probably not want to compete in the slim-margin volume car segment, I do have a counter point.
The fact that brand loyalty matters a lot. If someone has had a good experience with an i10, for their next upgrade, they would first look at what Hyundai has for the upgrade. If the vehicle looks stylish & is feature rich, they usually tend to gravitate towards the familiar brand. I'm unable to source it, but there was an article somewhere on the web which mentioned when the Japanese car brands launched Lexus & Acura premier brands in US, their first batch of customers was those looking to upgrade from a Camry or a Civic.
Can Toyota afford to classify themselves as a faux-premier brand in India by ignoring the mass-market? I'm not so sure of that.
Right - With 10 years in India, I am pretty sure some company policy would be there at Toyota instructing we need to make a minimum profit of 50% on any product sold, be it a scooter or an SUV.

With Toyota shelving plans to bring in the Lexus to India, the only option is to move the Toyota brand more upmarket.

Lexus would make very very less profit in the market owing to selfish profit margins, stringent tax levels and Govt taxing everything that sells good (Extra tax for SUV) and falling rupee value. Reducing disposable income levels, inflation and competition from other brands like Mercedes/Audi/BMW, Lexus would be a hard task for Toyota.

In say USA/UK, most people can afford a Lexus with Salary. In India the % of people who can afford a premium brand is miniscule and Lexus portfolio would not do justice in India.

They would expect Aspirational product customers to buy the same product at a premium price. Say a 2005 Innova V customer @ 11 lacs OTR wants to upgrade, He can pay 16 lacs OTR For the 2012 V or 18.5 lacs OTR for the 2014 Z. Note, this is toyota's strategy and not mine. . A 22 lac OTR 2010 fortuner customer at the end of his 7 year loan can buy another fortuner @ 35 lacs OTR in 2017

Last edited by scopriobharath : 16th April 2014 at 21:28.
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Old 16th April 2014, 22:54   #86
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Default Re: Shocking! Toyota India admits defeat in the small car segment

There is absolutely no doubt that Toyota went horribly wrong with the design of these 2 cars. That was quiet apparent from the day one of launch of these cars, there was no wow factor. I mean what were they thinking with these dull designs IMO Toyota wasted a fantastic opportunity to tackle the reigns of Suzuki and Hyundai in Indian car market and they are learning the lesson hard way.

As someone correctly pointed on this thread that itís high time they should stop treating India as a third world country and take customers for granted. As a matter of fact that applies not only to Toyota but also to other foreign car makers in India.
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Old 17th April 2014, 08:33   #87
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Default Re: Shocking! Toyota India admits defeat in the small car segment

Mr Kirloskar was talking about the sub 4 lakh segment, and therefore one cannot extrapolate his words to mean company policy has changed or that it applies to all sub-10 lakh cars.
I think we're reading too much into this. Look at the facts: Toyota has installed production capacity of around 3 lakh cars p.a. This level of investment is not done on a whim, the Japanese are known for their long-term views on investments. They may be searching for that one breakthrough model, but as the owner of a Liva, with another in the family for two years, these cars are the ones you drive and drive and nothing more is required apart from the extremely cheap and thorough regular services.
Nothing falls off, nothing stops working, and after a while you realise your car has been taken for granted.
World-wide this company is known for its tenacious business policy, they have never given up. Even in Europe where I have been regularly visiting over the last twenty years, I find the mass market French and German cars have been steadily giving way to the Nissans, Toyotas and of late Hondas.
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Old 17th April 2014, 18:19   #88
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Default Re: Shocking! Toyota India admits defeat in the small car segment

I fail to understand why cant they bring other versions like Yaris etc to the Indian market? A good funky/cute looking car to reboot their B seg strategie and then continue further.
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Old 17th April 2014, 18:48   #89
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Default Re: Shocking! Toyota India admits defeat in the small car segment

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Originally Posted by subscrive View Post
I fail to understand why cant they bring other versions like Yaris etc to the Indian market? A good funky/cute looking car to reboot their B seg strategie and then continue further.
They can but Yaris would start at 12 lacs for the basic model with black bumper and steel wheels, given their current pricing/profit policy. No one would pick it up again.

The only way for Toyota to bounce back is to price on par with the leaders and NOT charge a premium for Quality and Brand value.
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Old 17th April 2014, 19:44   #90
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Default Re: Shocking! Toyota India admits defeat in the small car segment

Quote:
Originally Posted by scopriobharath View Post
The only way for Toyota to bounce back is to price on par with the leaders and NOT charge a premium for Quality and Brand value.
Toyota follows a simple principle of "why fix it if it aint broken?",So till the time the Fortuner and Innova sales are pointing north they will not do anything.However let the volumes fall continuously for 6 months we will see either price cuts in the form of discounts or addition of more features or even both.And looking at the sales chart I don't think that time is far.
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