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Old 10th September 2004, 02:27   #1
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Imagine yourself to be someone in the age bracket of 45+, a man with 2 kids; both about to go into adulthood, a sprawling business and a house to match your lifestyle.

You own two cars, an Esteem and a Honda City 1.5. The Esteem is just a year old while your City is 3 years old. You like the city because its a Honda, no-nonsense car and a cheek to drive. But you want to move up in life. Prove a point? Probably yes.

So you decide what's best for you. You know that the Mercedes C-Class is the best way to prove a point. But at Rs. 25lakhs+ it isn't exactly cheap. Also, your best buddy just bought one 8 months back and is running maintenance bills *that are reaching stratospheric heights. So you decide against it. But yes you are willing to go in for a car that is realtively cheaper to buy and maintain and gives you the kind of bulletproof reliability that the City has given you so far.

You decide a budget. Around Rs. 16-18 lakhs. You analyse the alternatives. Its the Skoda Octavia Lauren and Klement, the RS, the Honda Accord 2.4 VTiL, the 3.0 VTEC and the Ford Mondeo. The Lauren and Klement is great to have, but too small. You don't need a really fast car, adequate speeds are ok. So you decide against the RS and 3.0. The Mondeo doesn't have good re-sale values and neither does it have great reliability. So you opt out. Finally you choose the Accord. And you get your cheque book out and head to the nearest Honda showroom. Like 200+ customers every month, you think you've made the right decision. And you have!

Its a long story to get to a point, I know. But I had to do it, because this is the buying process that every person looking to buy in that segment goes through. There are more details, but i have missed them since i don't wanna bore you. In most cases than not the Accord is chosen, the customer is happy and life moves on. But strangely the case is not the same for its nemesis, the Camry.

The Camry today is going for discounts in the range of Rs. 2- 2.5 lakhs, something that Toyota would dare not have done a year back. Most sales still happen in institutions, i.e. Private taxis, fleet cars and lease management companies like Orix. But private car buyers and top management honchos seem to stay away from the car. So what's going wrong with the Camry and why is it that Toyota is unable to move it off the showroom floors.

I think the recent price revision has shown a major kink in Camry's armour. Price. At Rs. 4 lakhs+ more than the Accord, it doesn't offer anything more tangible than the Accord, except a few more millimeters of space. Its capacious all right and has a rear back seat that can shame quite a few bedrooms in Mumbai, but that isn't a justification for such a premium. Don't get me wrong, the Camry is a brilliant car, it can give the Accord a tough fight on all fronts, but it just can't justify this premium. And thats what runs through the mind of any buyer even at this price range- VFM.

So would Camry at the same price sold even more if it were badged a Lexus? Probably so. But till its badged a Toyota, it needs to get its price down. Thats as much as people can pay for a brand like Toyota. It holds good brand equity, but can't justify it beyond a point.

That's life i suppose. And that's the rules of business as well.

Post in your comments. Also, give in your suggestions for what Toyota should do?

Revvmaster



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Old 10th September 2004, 11:52   #2
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Revvmaster, I must say that this piece is incredibly well-written by you.

The main reason behind the Camry disaster is its price. Well exceeding the Accords by a couple of lacs. But the Camry is imported as a fully built up, hence Toyota cannot take advantage of Indias low cost base.

Also, Toyota never wanted to sell the Camry to individual buyers anyways. The main customers are institutional buyers like hotels, rent a cars etc. who pick Camrys up for 9 lac rupees (under the EPCG 0% duty scheme). There is a phenomenon called "minimising losses" in developing countries like India. Toyota wants a presence in the upper D segment, but at the same time knows that its barely making money on every Camry that it sells. So it does not want to make the kind of commitment that Honda has made to this segment.

Either ways, the new Accord has beat the Camry in each and every comparo by any respectable magazine from the United States.

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Old 10th September 2004, 11:54   #3
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P.S. The reason behind the recent discounts on the Camry is getting rid of dead stock. They want to introduce the slightly facelifted Camry asap.

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Old 10th September 2004, 12:27   #4
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plus the fact that in most countries like uae and other, camry is used as an taxi. this is an major reason for people like my dad & his friends staying away from it

butt if it were badged a lexus then it would have sold properly
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Old 10th September 2004, 13:03   #5
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I dunno...the styling of the Camry is, IMO, dreadful.

The rear looks too huge and American for my liking and does not gel well with the sharp front. Basically it looks like an American car...large, wallowie (if thats a word!) and not exciting at all.

Maybe this too could have played a part in the low sales.

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Old 10th September 2004, 14:36   #6
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Firstly well written Revv

As said by all the main thing going against the Camry is its price. The fully loaded V6 Accord can be had for 18 lakhs on road Mumbai as inquired by me a month ago. Another point favouring the Accord is its image . Even before the Accord was launched officially in India, it was one of the most popular imports for many years. Any big shot always had one Accord with him.

Toyota has been popular too but mostly the cars you got to see were the Corollas and Caronas yes put in the Crowns too. Thats exactly the reason why the Corolla sells well despite being a bit on the expensive side in its segment.

The Camry wasnt as popular and coming at 20 Lakhs on road Mumbai most people would prefer to put in a bit more and get a Merc. Sure the car is very good very comfortable and nice to drive but then ours is a very price sensitive market and I agree with rtech that it looks like an American car . If it had a Buick or a Pontiac badge you couldnt really make out . The styling is based on the American buyer if one goes to see.

Toyota has to keep in mind the pricing when they get the new Camry to India. It can be badged a Lexus but I'm not sure whether it will sell.

Toyota are you listening??

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Old 10th September 2004, 15:50   #7
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I agree with Rtech and GTO on this

The looks are dead ugly to be honest. For a car costing nearly Rs. 20 lakhs, being seen in a car that isn't noticed isn't good news.

Then of course, it being a CBU, the price is on the higher side. But then again, if you look at Skoda Octavia, inspite of now having 40% local content, the car still is stratospherically priced in comparison to its competition. It no longer is able to justify such a high price.

Sure toyota, like Opel/Chevrolet is looking at getting an upgraded version of the Camry by this year end with better interiors and what not, it needs to get its pricing strategy right. Maybe a bit of localisation would really go a long way in getting Toyota some volumes and presence in the upper segment.

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Old 10th September 2004, 17:18   #8
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Quote:
Originally Posted by [b
Quote[/b] (aadix @ Sep. 10 2004,10:57)]plus the fact that in most countries like uae and other, camry is used as an taxi. this is an major reason for people like my dad & his friends staying away from it

butt if it were badged a lexus then it would have sold properly
Aadix,
Going by that logic Corolla shouldn't have sold either but look at the sales..it leads amongst the competition. It is a global taxi ! & speaking of UAE only Dubai has Camrys, Sonatas, some mercs & beemers as taxis as they are run by Dubai transport Corp. which is govt. owned. In other emirates like Abudhabi, Sharjah & rest its the corolla & Peugeot station wagons(505 i think..can't remember) doing the hauling work.

About the Camry, I like its sharp looks in the front but at the rear it loses out bigtime & yes price revision should be due for the car if they plan to sell it to individual customers. Also if you notice the spare parts of the Camry are damn expensive owing to the import. I mean a rear view mirror costing as much as a C class w/o turn indicators !! 11k..friggin expensive! But all said & done the interior space is the largest in class I think..just huge at the back.
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Old 10th September 2004, 19:07   #9
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Quote:
Originally Posted by [b
Quote[/b] (rjkulkarni @ Sep. 10 2004,15:48)]
Quote:
Originally Posted by [b
Quote[/b] (aadix @ Sep. 10 2004,10:57)]plus the fact that in most countries like uae and other, camry is used as an taxi. this is an major reason for people like my dad & his friends staying away from it

butt if it were badged a lexus then it would have sold properly
Aadix,
Going by that logic Corolla shouldn't have sold either but look at the sales..it leads amongst the competition. It is a global taxi ! & speaking of UAE only Dubai has Camrys, Sonatas, some mercs & beemers as taxis as they are run by Dubai transport Corp. which is govt. owned. In other emirates like Abudhabi, Sharjah & rest its the corolla & Peugeot station wagons(505 i think..can't remember) doing the hauling work.
hey rj
according tomy dad (who goes every month, 90% of our business is from there )both abu dabhi and dubai have the toyota's as taxi(u rarely see any sonata though)
now if u speak of the corolla it is in a diff price range and hence no probs

why i said abt the camry is coz after paying close to 20l no one would like to buy a car badged as a taxi(would u?)
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Old 10th September 2004, 19:29   #10
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Quote:
Originally Posted by [b
Quote[/b] ]why i said abt the camry is coz after paying close to 20l no one would like to buy a car badged as a taxi(would u?)
Why 20 lakhs...ppl spend 40 lakhs driving a taxi too. This one just happens to have the 3 pointed star in front!

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Old 10th September 2004, 21:50   #11
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Revv dude........great write-up.Very Professional indeed.

IMO the Camry is heading Vectra`s way.
The Vectra was launched at around 22L.No Buyers.The price sliding to 18L.Few Buyers.Then finally discounts coming up and the price now stationed at 16L.Few more Buyers.
The reason for the Vectra was FE.
The reason for the Camry is its cabbie impressions,and the ugly front end,and ofcourse the pricing.
Indian mindset is such limited that any car other than the Mercedes priced above 20L is a waste.Think about it.How many C-class do you get to see on the road compared to the Camry?? A lot.Hmmm.
And moreover the Tourist Companies like Hertz,Avis etc were getting a disount of 2L on the Camry.
One of my uncle purchased this car for 21L for his hotel customers,a month after its launch.Ofcourse a tourist no. plate.And he has purchased another 2 cars in April this year for 19L.So imagine the amount of losses they are going through.Its only because of Corolla that the company is making profits.
But then,if this car was launched under the Lexus brand,people would have not accepted it either.
Lexus spells class.And the Camry is no ways close to class.Its spacious but then who cares.
Another thing,the Lexus brand would have been degraded in people`s eyes,and how many people would buy the actual Lexus range like the LX,RS,GS etc for 25L+.
Very Few IMO.
Well so the only thing Toyota has to do now is take Camry off the market and launch the Lexus series.
Thats what i think bout this.
Cya.
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Old 10th September 2004, 22:17   #12
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How come no one mentions the Superb - same problem, cabbie roots excepted ! Have not seen a single one over in Bangalore except for the dealer demo vehicle
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Old 11th September 2004, 15:15   #13
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the only reasons the cars is not doing well is because of its looks...
a face lifted version with better interior and more gadgets to play with while retaining all the positive points at the same price ro a bit cheaper would really help its sales.....
and an auto gearbox and enw engines wont hurt.....
maybe if toyota localises it - even 20-30% , the price reduction would really help its sales

hey x-machine ... i gotta agree with u there...
anyone have prices for new vectra....
why dont toyota launch a new camry under lexus brand name...
it will be quite good....



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