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Toyota to launch separate marketing arm in India

Some restructuring is underway at Toyota India.While Toyota Kirloskar Motors (TKM) will look after output, CNBC-TV18 reports a new company, Toyota Kirloskar Sales, will handle the group's sales and marketing. The unit will be part of Singapore-based Toyota Asia Pacific. Company sources say this will boost decision-making efficiency.
But Vikram Kirloskar, vice chairman, Toyota Kirloskar Motors, denies this. He says, "I don't know why it should be spun off because we are not really importing and selling cars here. And why add another layer of bureaucracy to something."


Experts say the move comes because the Innova's sales have apparently slumped. TKM had priced Innova at Rs6.5 lakh, which, company sources say, was Rs100,000 more than the product planning department had recommended.
Besides, even the Toyota Corolla seems to be facing rough times in the market after Honda launched its Civic.
Toyota is believed to have reduced production and cut prices. And now company sources say Toyota has more than tripled its advertising and marketing budget to Rs200 crore from Rs72 crore last year. It hopes all those moves will push its cars and its sales graphs as well.

Meanwhile the Indian production operations of Toyota Kirloskar have been brought directly under the control of Toyota Motor Asia Pacific Company based out of Thailand. The Toyota Motor Asia Pacific Company will also support Toyota production operations in Thailand, Malaysia, Indonesia, the Philippines, Vietnam and Taiwan.

Source:CNBC TV18.

Why would a seemingly expected corporate restructuring be construed as a sign of bad times? Its but natural for a company to take as much direct control in the decision-making functions of subsidiaries - more so when a subsidiary is seen as losing significant market-share that would jeopardize the parent company's long-term plans.

If you notice the product planning department had actually wanted to replace the qualis with the innova but keep the price tag on similar levels,this could not be achieved and toyota india still went ahead with the innova without taking care of the vacuum created by withdrawal of the qualis.

I am with MAXBHP here... Toyota really is bring the bad models here, while keeping the goodie goodie models for other countries, JUST LIKE FORD!

And Toyota does have to really launch some vivacious looking cars, like Maruti did with SWIFT, to stay on in the market for long.

In the Corolla/Civic/Octavia segment, the Corolla has lost it to the Civic. In the Innova Range, it stays as not much competition. Once Mahindra launces its MUV against the Innova, and seeing how good M&M has been with the Scorpio, Bad times are seen for toyota in the future if steps are not taken to boost up models, more than the advertisement/marketing strategy.

That, my friend, is true for almost all car manufacturers in India, save Hyundai.

I agree. It shouldnt necessarily be taken as a sign of bad times.

However, it is Toyota admitting that its current marketing strategies needs to become stronger. I am dead sure that it will equate to, significantly, fresher talent into the new marketing arm.

Splendid Insight!

What would this mean?
1) Did TKM got the pricing wrong (based on their marketing research)?
2) Is it TKM couldn't sustain manufacturing at the price suggested by planning dept?

I think this is a good sign - Toyota have been surprisingly TIMID in India. I think Honda have just pricked the sleeping giant with a Civic needle. Very good for us - this is the sign of GOOD times to come.

Hi everyone, it's me Venkat here - been quite some time since I posted anything on this forum after becoming a member.

However, coming to the topic of these car makers keeping the better models or to be more specific, "better equipped" models to other countries, I must say what I have in mind regarding Ford and Toyota in India.

A couple of days back I was just doing some research on the Toyota Innova and Ford Fusion in the Indian market and somehow I got to see the Toyota websites of Philippines, Thailand, Malaysia and Indonesia where the Innova is also sold - but with much better equipment. For example, engine choices of 2 litre VVTi, 2.7 litre VVTi and 5 speed manual and 4 speed automatic transmissions, parking sensors in the rear bumpers, reversing cameras with the satellite navigation and large display in the dashboard (in some markets), electrically foldable outside rear view mirrors, powered front seats, Optitron gauges for the instrumentation (check out the links I have provided for the Innova) and so on.

As for the Ford Fusion, I noticed leather interior, in dash 6 CD / DVD options, 16 inch alloy wheels, electric mirrors, electrically foldable outside mirrors, ABS, dual airbags and more engine choices like a 1.6 litre petrol (same as the current Indian Fiesta's), 2.0 litre petrol, 1.6 litre Duratorq diesel with much better output (in the region of 100-120 bhp as against the 68 bhp of the Fiesta's 1.4 litre diesel), 2.5 litre turbocharged diesel and so on. Even if India doesn't get those wonderful engines, why not at least include those extra features like the electrically foldable mirrors, parking sensors etc ? I noticed these features on the Ford UK website at http://www.ford.co.uk.
As for the Toyota websites of those other markets mentioned above, here are the links:

http://www.kijanginnova.com/ (Indonesia)
http://www.toyota.com.my/hid_88.html (Malaysia)
http://www.toyota.com.ph/showroom/innova/index.html (Philippines)
http://www.toyota.co.th/red/en/ (Thailand - English version of the site)

All of you, please do let me know what you think. I am really pissed off with these car makers for not including such useful and interesting features in the same models sold in the Indian market, despite the vehicles costing upwards of Rs. 7 lakh. Forget the Fusion as Ford has just knocked off almost Rs.80,000 from the Fusion's price and in the process also got rid of even things like ABS which were optional. Even the electric mirrors on the Fusion are gone due to this price cut and "redesign" of the interiors which now have the Fiesta's gauges etc.

Regards,
Venkat

splendid observation rahul,infact it was echoed by a rival company top brass,

he put it as a 'display of admirable courage to replace a model basking under un-diminishing glory in the current market with a spanking new model',

and if you observe now they are giving considerable discounts which is close to 60k and finance subsidy which never happend in the case of qualis(max 10-15k),and at the fag end speculators hoarded qualises and sold them at a premium!!!

i can say one thing toyota is a company which apply's a lot of wisdom in anything they do,it may seem they may be making a mistake but they always have a back up plan take their marketing strategy for instance amir khan did look un-nesassary when the product was new but as the vehicle is becoming more common he does help in getting a second(possibly a deciding)glimpse for the car,

iam trying to point only about toyota's far sightedness and not their products,they will do anything but only after a million deliberations.

Why doesn't toyota bring in a bread n butter model in the 5 to 6 lacs range. I am sure they have one of the best range of diesel engines on offer. Why have they been keen only on Petrol cars, while every other manufacturer is turning the diesel way (Cars, i meant)

And if it is keenly observed, all the biggies are bringing in models that are only for the moneyed few. Maybe they make better margins there.

Again as somebody observed, toyota has been timid in India. Maybe its time they get aggressive. The market is on the boil for new models, come 2007.

Toyota Yaris saloon can be good option to get the Verna, Fiestas and it looks good too.

I feel they should have done the same thing with the Innova here . Should have launched a fully loaded one for around 13 lacs and sell the qualis side by side . If not 2.5 D4d , plonk in a 3.0D4d , add some plastic claddings , better quality running boards, lower tyres, better alloys , a grille like those of LC Amazon and finally all leather interiors. This may come upto 13 lacs , but this would have still sold quite a number and at the same time maintain a 10 lac model too. By this way Toyota can have decent sales figures coupled with qualis without being too aggresive on the marketing/discount side.

• Top End Innova(13) -...700 units
• Lower model(10)-.......1000units
• Qualis -......................2500units

I somewhat agree to the same . I too feel that they should have kept a sumo competetor by offering a basic no ac no ps model of the qualis and then start with the level 2 upwards innova with power windows and central locking ,two tone interior in light colours , as it is they just feel too overpriced