Why has the petrol Innova bombed

[Rekha]

i'm giving a few findings from research as requested by few BHpians

fuel type motivation for diesel

• driving kms is more
• unit cost of fuel is cheap compared to petrol
• fuel efficiency/mileage

and for petrol cars its vice versa.

i also found that the gap between petrol and diesel engine decreased as far as noise/vibration/pollution etc are concerned because of CRDi engines and other improved technologies. what gap exsisted before .. say around 5 yrs do not exist now(i mean only gap decreased and still petrol engine has upperhand).

hey guys what about resale value which plays one of the major roles? that also decides petrol or diesel.

Even though Innova is positioned as "MPV+PC" why its a success only in MPV market and why not drawing volumes from PC segment?

have taken City and Optra for analysis

• Innova's low mileage
• size and looks of the car
• no direct requirement(nuclear family)

i think mileage wise innova cant be compared with sedans coz of innova's engine(have to drive a bigger car).
and one more info - city constitutes around 48% of market share in its category by sales.

but definitely innova's engine capacity, torque, power(many product features) are superior compared to basic MPVs and PCs. and innova has an edge over safety features too (like GOA body, ABS etc)compared to some other vehicles in that category.

i dont remember the exact figures for that. but if anyone interested, i can get back to my analysis and get it.
then goes my promotional plan which is entirely marketing stuff and thatz why dint include. i've entire profile for Innova petrol, innova diesel, city, optra, tavera, scorpio (all this included in my analysis). so any one can ask me customer profile if required for something.

and i thank u all guys for warm welcome and i'm sure i can learn a lot here.

i know "bhp" stands for break horse power. but since it was BHP(in caps) i thought it will have some other meaning. i thank Mr. Ram for giving additional info on bhp.

[Joz]

How much ever the Innova tries to be a car, lets not deny the fact that its an MPV. And i don't think Toyota has ever tried to position it as a car. Their communication suggested a highway vehicle which can seat a whole lot of people.

From the day Innova launched, Toyota has always been confused as to whether their customers are those who intend to purchase just another MPV or whether they are people who are looking at spending 8 - 11 lakhs on a good automobile. I still think a vast majority of the customers are those need to transport more than 5 adults comfortably and/or often intend to travel long distances.

Trying to position the petrol Innova agaisnt the Honda City and the other petrol vehicles in that price bracket will not yield much results. To my mind, Toyota should focus on capitalising on the momentum the diesel Innova has in the market, rather than push a non starter (petrol) to lay more eggs!

Shantanu, it will be great to know what were the reasons why you picked the Petrol over the diesel.

OT: Looking at the sales for the first 4 months of FY07, Toyota better launch their small car without any further delay. The Corolla sales fell 26 % YoY and the Innova gained less than 1 %. Rekha, whom are you doing the project with? Rajesh Grover?

[WhiteKnight]

Why would I buy a MPV?

I want to travel with my whole family on long trips, bad roads included, with good comfort

Why Diesel, why not Petrol?

I am not planning to do 180 KpH on my MPV- for that I have a car and a good one too. And I also believe diesel engines have more torque (due to my upbringing- Did I ever see a TATA truck which runs on petrol?), so more lugging capability.

[GTO]

Extremely interesting analysis, Rekha. As a fan and huge-recommender of the Innova, heres my two cents:

1. The target customers are entire different to Innova D and to Innova P. But I dont see the same reflecting in Toyotas marketing activities. Atleast not effectively. Your Innova D customers are typically (but not restricted to) long haulers - both commercial and personal. The target Innova P is primarily for personal use, and apt for larger families etc. As someone suggested in your introduction thread, why doesnt Toyota call it differently? Why just the Innova?

2. Image counts a lot in India, and the Innovas MUV / Utilitarian image is not the first choice for personal use. I know of some families who the Innova would be perfect for, but they opted for other options primarily due to the image (or the lack of).

3. The sales restriction to Petrol people-movers is not only the Innovas woe. The Petrol Scorpio and the Petrol Safari have met with a similar fate. The reasons are outlined in the last two points.

4. Even though the NHC / Optra etc. are petrol and fall in the same price bracket, it would be incorrect to target them as potential competition. You are offering a 7 - 9 seater, and the supposed competition is a 5 seater at best. Also they are hard-core sedans with much superior handling, city driveability, acceleration (in some) and FE. Even though the toyota product has more space, I wouldnt pair an Innova against a C-Segment sedan in the competitive landscape.

Reasons for dismal sales:

1. The resale value : Depreciation is by far the biggest cost to an owner. Try taking a used Petrol Innova to a local used car dealer for an estimate and you will be in for a rude shock. I would presume that most Indians replace their cars after 5 - 6 years, and a 5 year old Innova D will fetch a far more $$$ than an Innova P. Plus it will sell much faster.

2. Petrol is now 54 bucks a liter!! And are diesels really that bad anymore? As you rightly mentioned, CRDi technology has changed the rules of the game. I myself picked a diesel Merc over a Petrol. CRDi gives you a lot more power, efficiency and refinement than traditional diesels did. And for people haulers (read Innova), diesels are preffered due to their increased torque and rugged nature. Even on the highways, a diesel engine will absorb adulterated fuels much better than petrols.

I am Toyotas target market since I need a modern machine which will carry my 6 member family comfortably. Am looking for options since 6 months but the Innova is not even an option on my list.

[suman]

Originally Posted by Joz

OT: Looking at the sales for the first 4 months of FY07, Toyota better launch their small car without any further delay. The Corolla sales fell 26 % YoY and the Innova gained less than 1 %.

Wonder what they have in mind! I mean, I would have thought they should have concentrated more on the Fortuner and could have made a killing in the process if the price was right! At 15-18 lacs they would have had a winner

[ajmat]

1: Pricing difference

When you see the mere one lakh difference, the monthly emi money saved and the higher petrol cost, people plump for the diesel by default

2: Awareness of when diesel is practical

Lots of people spend rs 100000 to save rs 20000. No one has explained the math

3: Have you asked the 4% why they have bought the petrol?

Shan2nu will give you his reasons. A colleauge of mine bought his because it1: he did not like the diesel smoke and being a thrid car and living nearby, the lower price was worth it. There are one or two petrol innova's lurking in my company - i suspect they are US returned who have no clue or are resistant to diesels (one key segment you can go after! )

[greatDrive]

Originally Posted by ajmat

. they are US returned who have no clue or are resistant to diesels (one key segment you can go after! )

Yes I do Agree to Ajmat on this, One of my US returned friend opted for Petrol Innova. He never wanted a Diesel. so NRI's coming back can be propective buyers.

[GTO]

3: Have you asked the 4% why they have bought the petrol?

Brilliant! Simply brilliant

[Mr.Bangalore]

i too own a Innova Petrol
Well if you want to boost Innova Petrol then give some guddies along with Petrol version.. like how Skoda is doing.. may be the version should be differnt for both diesel and petrol and give some added features and also the buyers should know the advantages of petrol vehical over diesel.. like how much time they have to service the diesel when compared to petrol and also the cost of servicing should also be mentioned..

[Ram]

The petrol people mover is descended from the Bajaj-Tempo Viking passenger van. I'm old enough to remember it. It had a two-stroke engine and front-wheel-drive. It died as soon as Bajaj-Tempo introduced their diesel-based Matador passenger van.

The majority of Indian car buyers are one car people. A slim minority have two cars, and a wafer-thin miniscule minority have three cars.

Category 1:
Nobody would buy an Innova as their first or only car.

Category 2:
My first car would be a general purpose 3 box sedan.
The second car would be an economy hatchback.
So: Accent and Santro

Category 3:
My first car would be a general purpose 3 box sedan.
The second car would be an economy hatchback.
The third car would be a people mover, ideally a rugged one (even with four-wheel-drive)
So: Baleno/Corolla, Getz/Swift, Scorpio.

Americans (spiritual descendents of the wild-west cowboy -- as seen in Westerns)
love pick-up trucks and 4x4s, ranch-houses, faded jeans and sports-rifle.
Soccer moms who used to drive their kids, the family dog and the kids' friends to the school soccer/baseball/football match, drive a big station wagon, or minivan.

Europeans are either
the hot Volkswagen Golf hatchback people,
the Mercedes E-class/Ford Mondeo/Opel Signum people or
the Alfa-Romeo Brera/Jaguar-XK spider/Opel-GT coupe people.

India is a country where the sophisticated aspire for higher education.
Indians with the ability to afford the purchase and upkeep of automobiles are
somehow closer to the suave European in their mentality
than the ripped-jeans show-off cowboy American.

We would rather go for Baleno/Fiesta/City/Accent/Viva than Innova.

Does this give us any hints to why a petrol Innova would never succeed in India?
The diesel Innova of course could be adapted to suit the good tourist taxi market.

Ram

[Steeroid]

Originally Posted by suman

Wonder what they have in mind! I mean, I would have thought they should have concentrated more on the Fortuner and could have made a killing in the process if the price was right! At 15-18 lacs they would have had a winner

However good the car is - and the Fortuner is NOT as great as it is being made out to be in the forum - the numbers you can sell at 15-18 lakhs dont make any sense. They will still make more money out of the Innova.

The Fortuner, for all its size, has a cramped mid-row. With three rows, it looks like an ST bus where the priority is to push in as many seats as possible. It also looks like the Innova from the front, which as we all know isnt the best looking vehicle around.

15-18 lakhs? No way - Honda will beat Toyota in this market yet again. A more realistic price for the Fortuner will be 12 lakhs - which is perhaps why they havent launched it yet.

The reason why the Petrol Innova will not do well, no matter how much they plug it, is because it is seen as an MUV and all competitors (whether deserving or otherwise) such as the Scorpio, Tavera and Sumo are Diesels. Its an oddity, and it wont sell in any great numbers for precisely this reason - they need to get rid of the UV image for the Petrol version. Jazz it up, MAKE IT LOOK DIFFERENT. Some amount of plastic cladding to give it a slightly more flared and aggressive look. Change that silly grille. Put in fatter tyres (ouch - mileage!). Just make it stand out.

After reading all that I'll admit that it makes more sense to just stop making those small number of petrol variants than to do all that has been suggested. Therefore, Toyota, just can it.

[Rekha]

guys, i've sent a big theory explaining all the points but unfortunately, after typing and when i was about to send, some error occured. just now my classes getting over and when i came to resend d previous mail, i was surprised to see so many responses. thank u all. till now i was talking from the Toyota's point. now instead of sending that mail again, lemme send my point of view

[man23ish]

Hmm, Let me take a Guess,

I think the petrol Innova failed coz of a much cheaper people carrier in Maruti Omni. Of-course and besides Maruti provides so much options like CNG, LPG, etc.

Why would one spend 12Lacs on a vehicle, when you can get atleast 4 equivalent for that kind of money. Heh Heh..

[condor]

Rekha, could you give a split for the other 96% of Innova users? One point has been to understand why the 4% chose the Innova P. categorizing the other 96% can show how many of buyers were commercial, and how many were for personal use.

Commercial users - would stick to diesel. You would leave these users out of any analysis.

Of the personal users, there could be a group who could have been influenced to have selected the petrol version. You may need to educate buyers about savings that they would actually get, so they can take a more informed decision.

Some of these owners who have taken diesels could have done so keeping in mind the re-sale. Used vehicles do often end up as a taxi.

Of the NRI's, they would continue with petrol version of any vehicle they choose, mainly because of their experiences there. OT, diesel is more expensive than petrol in the US.

Is there any data and analysis of the competition - Tavera?

The only point I would not agree with, with what Ram says is that the first car would typically be a hatch, and then upgraded to a 3-box, before looking for a second hatch, or may be a second 3-box. A simple look around will show more hatch-backs than 3-box sedans.


A related question: Why Innova ?

At this time, my thoughts are that the only other way to increase Innova P sales would be by increasing Innova sales. But looking at the traffic today in our cities, and parking, the focus would be on vehicles smaller than the Innova.

Also, even if Toyota didn't intend to, the Innova came out as a replacement for the Qualis, which again was more a people mover than a personal vehicle. If both were available at the same time, and comparable, Personal preferences apart, I would have taken the Qualis - the Innova is bigger, and looks & feels much larger than it is. Parking is definitely a problem - finding the space.

The performance and the FE of the Innova compared to other choices in that price range is another factor against the Innova [unless there is a specific need for the buyer to go for a vehicle that often transports 6+ people].

If possible, please do provide more data - numbers make it that much easier to understand and provide suggestions. While we are discussing this, I hope you and we are not stepping beyond defined lines with regard to bringing information outside of TKM.

[condor]

man23ish, you are referring to two different categories of vehicles, and related buyers.

IMHO, the point you mention is not particularly relevant to the subject of this thread.