[blacksport]

Originally Posted by zenren

That was the ideal slot for Etios to fit in. They could have targeted Etios as a competitor to City and the price difference would have easily helped them launch a car that avoided all the exterior and interior cost cutting that they had to do in Etios. It is a good car otherwise and would have got more buyers if Toyota had put in 1-2L more and given a proper car. Remember that City got a diesel avatar just a few months back. A comparable Toyota sedan with diesel option would have heavily damaged City's sales and posed as a tough competitor to Verna.

By any stretch of imagination, the Etios cannot be compared with the City, Vento or the Verna. Neither does it have the premium-ness of the above cars, nor does it have the price advantage of the compact sedans. Etios is in no mans land. No amount of goodies would have made it any more desirable.

BTW, I think Toyota had a lucky run with the Innova so far. One thing I had noticed when i was went to Japan a few years ago was that most of the large passenger cars there were innova type MPVs. I don't understand why Maruti or Honda or Nissan hasn't brought us an innova competitor yet.

[scopriobharath]

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.

[nim_peter]

For me it is just that there is no wow factor in it, very much like Logan. No doubt all these 3 cars are rock solid and great cars. In India it matters what neighbors think. Landing in an Etios or Liva won't make my neighbors or my friends jealous Cars like Linea, Jazz, Polo, i20 got a premier look and you feel you own the best car out there, just my view.

[Bingeljell]

IMO, while this could be a larger strategy for the company, I wouldn't have really phrased it the way Kirloskar did. At least not if I ever wanted my customers to think that I'll be back.

They are launching the Etios Crossover, so that'll be something to see...

While I'm no expert, if they manage to do what they did with the Original Corolla in that segment, or repeat the Innova success with another model, they should be home. Will also give them breathing room to rethink their small car / mass market strategy.

[drsingh]

Isn't the premise that Toyota has "failed with the etios twins" wrong in this thread.

The interview clearly points towards the fact that Toyota has been unable to break the "4 lakhs" price barrier.

The "failure" is that they can't make a "Toyota quality car" at 4 lakhs at present.

By quality I mean measurable levels of quality meaning tolerance levels in spares, critical part failures etc.

They may choose to build a lower but "acceptable" quality car Branded "Daihatsu" just like Renault /Nissan have chosen to build a lower quality car branded "Datsun" to hit a certain price point.

They can't ignore the B and C segments, that's where the volumes lie. They're making the etios twins better every year.

They have a major advantage in their service framework and policies. Their vehicles are designed from the beginning to avoid critical part failures and lower service costs. They will become mass market players when they go into tier 2 and tier 3 cities like Maruti and Hyundai. Which they are doing.

It would be wrong to think that Toyota is giving up on the B and C segment.

[nik_kapur]

Toyota can do as well as Honda and Hyundai in the Premium Hatch and Mid Size sedan segment if they did not treat us like a third world country. They sell junk in these segments when they have good cars like the Yaris and Vios in their international lineups. They need to get over the success of the Qualis which has really messed up the heads of the management. The Qualis existed in another environment and India is now a changed nation.

[pgsagar]

Toyota desreves this. Qualis and Innova success has bloated their heads to the point that they think we Indians will lap up any crap with a "T" badge. Etios/Liva looked infradig right from the moment of their launch. Today, Camry sells a fraction of German sedans. Corolla is struggling. Only Innova is selling in big numbers but I'm sure it cannot go on selling forever. It looks bland and utilitarian. I don't car how reliable it is. That thing looks like a parcelvan with glass panels in place of sheetmetal. And speaking of reliability, Toyota is not the only reliable car there is. Honda/Nissan/Suzuki/Hyundai are no less reliable. Ertiga and Enjoy get the work done as good as an Innova. Evalia, too, but for the quirky looks. Budget end is dominated by Maruti/Hyundai and premium end by Germans and British (they are slowly making inroads, thanks to Tata). Where does that leave Toyota? Well, right now it is just MUVs.

[Chethan B G]

Does this mean reduction in manpower? May be, recent strike / lockout have got them thinking?

It is very hard to believe that a giant company like Toyota can take such a drastic decision. Quality was compromised a bit with Etios / Liva. If Toyota decides to sell only big cars, quality will be maintained. Good for public.

[one-77]

I think the key here is how Toyota defines "success". Some manufacturers - Fiat, for example - would be yearning to see their cars do the numbers and return the margins the Liva/ Etios twins manage every month.
Toyota probably expected Swift-like numbers and Innova-like margins, which they simply couldn't realize from its small cars.

[deepclutch]

Toyota may have figured after seeing our neighbouring nations like Bangladesh, Pakistan, Srilanka where Toyota is the obsession with even decade old JDM cars flood these markets. they made cars for VFM segment assuming Toyota tag is enough. they may have concluded India is not much different and will embrace anything with a Toyota tag, even if that looks like and feels like cars from '90s. I am not saying we are anything better, but our people's choice has definitely changed from the Qualis era.

[Yeldo]

Where comparable or similar products are few and far between as in the case of the Qualis / Innova / Fortuner, Toyota sure has had success. But where there is competition, Toyota has not risen upto its own reputation in India. A sub par product like the Liva stands little chance against the competition from Hyundai and Maruti.

Unlike most of Toyota's other vehicles, which cement its manufacturer's quality image, the Etios / Liva twins have to rely on the brand image alone to sell in any significant numbers.

On the other hand, its competitor Honda seems to have got the cost / quality equation right in India. The City, the Brio and the Amaze are nothing special if benchmarked against global Honda standards, but still manage to meet customer expectations in India.

Unless Toyota does something similar, it stands no chance in the small car segment.

[LoneWolf9]

There can be two reasons for this.

1.If i can make money by selling 1 Innova which i cannot make even by selling 20 LIVA, Why would i deploy my infrastructure for LIVA.

The lack of competent vehicles in the 10L+ segment is the reason why Toyota is having a free run. Iam sure Innova and Fortuner are the best margin Vehicle in India. Innova specifically is grossly overpriced but than we dont have much choice either in this segment. The price of all Toyota cars have shot up big time in the last 3 years. Yea Yea Rupee depreciating with much faster speed at Toyota than anywhere else. And the price don't correct even if it moves from 68 to 60. How else a Prado costing 69L on road in 2011 is now costing 1.04 CR?. Thats 100 LIVA margin right there

2. Maybe that's their way of suggesting that Toyota Cross is not a small car.


Irony:- I am about to assist Toyota with 20 Liva margin.

[charanreddy]

Honestly this statement doesn't say anything new that we have not seen over the years. Toyota has made no efforts in the sub 4L segment at all and at max a half hearted attempt in the sub 6L segment with the Liva. Their USP lies in reliable, good looking mid-budget vehicles starting upwards of 10L. and with their current line up they are missing out on some very hot categories now

1. 10L Segment Sedan ( City / Verna)
2. 6L - 8L Segment, Compact Sedan ( Amaze)
3. 6L - 10L Compact SUV ( Ecosport, Duster)

In India where Swift Dzire sells more than WagonR, I10 etc. and Honda City, Amaze sells more than Brio, they would do better to realize the growth potential with rising disposable incomes and aspirations of the middle class.

[deetjohn]

It is no secret that Toyota placed their bets very wrong for the Etios twins. The glaringly obvious cost cutting was noticed and not ignored by the mass market. There are many rubber and plastic bits missing in the Toyota when compared to competitors and it makes for a very sad look and feel inside the cabin.

And this news is disheartening. I would have loved them to have another go at the small car segment. The base ingredients are all there, Toyota just needs to spend some money and effort on the obvious bits to increase the desirability of the product. And no, more chrome everywhere just doesn't help.

I would love to own a Toyota in the future and cherish the wonderful after sales service and support. But the product matters, and currently there is some gap to the industry benchmark in the small car segment.

[zenren]

Originally Posted by deetjohn

And this news is disheartening. I would have loved them to have another go at the small car segment. The base ingredients are all there, Toyota just needs to spend some money and effort on the obvious bits to increase the desirability of the product.

As some members have already pointed out, I think we interpreted Kirloskar's words incorrectly. What I understood from that article was that Toyota would not venture into the sub 4 lakh market with its products. They have already tried every cost cutting measure in the book with the Etios twins and they still couldn't get it below 4.5 lakhs. So there is no way they can launch a small car (3-4 lakh range) without considerable investment in R&D which they are not ready to do.