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Old 11th March 2020, 14:11   #1
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Default Toyota to follow Maruti-Suzukiís low cost business model in India

Toyota To Follow Maruti Suzukiís Low Cost Business Model In India

Read more at: https://gaadiwaadi.com/toyota-to-fol...odel-in-india/

Found this article which mentions that Toyota will start engaging with Maruti's suppliers to get components at a cheaper price. Toyota has decided to prioritise cost cutting for its products going forward in an attempt to increase volumes. This may also apply to their hybrids coming later on.

What do you think? Will Toyota quality get compromised in this effort?

Mods: Please place this in the appropriate thread if someone has already posted about it.
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Old 11th March 2020, 17:17   #2
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Default re: Toyota to follow Maruti-Suzukiís low cost business model in India

The Etios & Liva felt quite old & outdated even when they were brand-new. The Innova Crysta is pretty much running on the same platform as the 2005 model. The other cars in the Toyota showroom are badge-engineering jobs on Marutis, and a couple of zero-effort-to-sell CBUs.

And Toyota India wants to further cut costs? God help this company. What "Toyota India" needs to do is think like "Toyota Global" and bring some truly international products here. Learn, Toyota, learn. See how Kia brought in a world-class product and has that 1 car outselling your entire portfolio!

Last edited by Aditya : 11th March 2020 at 18:05. Reason: Minor typo
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Old 11th March 2020, 17:47   #3
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Default Re: Toyota to follow Maruti-Suzukiís low cost business model in India

So, the market as of now -

:

Toyota, Maruti Suzuki and Honda, after being pioneers of automotive tech in India, losing their plot completely by planning low cost business models for India.

VW-Skoda duo continue to churn out decade old platforms for India.

Nissan-Renault aren't sure if they want to churn out anything worthwhile for India.

The Americans have either left India or packing their bags and checking in for their flight back home.

China seems eager to enter India (the horror!).

:

Koreans seem to be making hay while the sun is shining.

The Indian duo of Mahindra and Tata continue to improve.
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Old 11th March 2020, 17:48   #4
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Default Re: Toyota to follow Maruti-Suzukiís low cost business model in India

Quote:
Originally Posted by GTO View Post
What "Toyota India" needs to do is think like "Toyota Global" and bring some truly international products here.
I think Toyota is focusing and really putting efforts where it pays off best-Japan and the US. Toyota, especially Lexus has excellent brand value in both markets as they have full range of products on offer and consumers can shell out that much extra money for top end variants. Getting a new product line-up in India would be costly with all the tooling cost, ATL activities, dealer incentives etc.

Even Ford and GM are doing something similar with their products, focusing more on the domestic market. They have been able to milk more money there than in other countries. For ex difference between the base Silverado/F-150 and top Raptor is more than USD 20k and consumers have been flocking towards top end variants of late.
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Old 11th March 2020, 18:10   #5
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Default Re: Toyota to follow Maruti-Suzukiís low cost business model in India

I remember Toyota and Honda India bosses giving interviews less than a decade ago that they won't enter the sub 4 lakh car market because it won't meet their safety standards for the asking price.

Yet a few years later Toyota wants to break that promise while Honda are on the verge of leaving the market.

If only our purchasing power grew on the same rate as the developed nations.
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Old 11th March 2020, 18:33   #6
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Default Re: Toyota to follow Maruti-Suzukiís low cost business model in India

Quote:
Originally Posted by Nithesh_M View Post
............

If only our purchasing power grew on the same rate as the developed nations.
Who says our purchase power hasn't grown? Have you seen the sheer number of Luxury cars sold Month on Month. Have you seen the Used Luxury car dealers which have cropped up?
How has Toyota been able to jack up the prices of the Innova and Fortuner to unheard levels without offering ever 50% of the features which competition offers. And yet we still line up for their vehicles.

Purchase power has increased but you have to see at a much more depth level. The purchase power of rural India which used to buy only Splendors is also increasing. This is the reason for Sub 10 Lakhs cars seeing a boost.

Moreover going by the level of traffic and parking issues, almost ever other household which can afford 2 or more cars purchases a Small car for their city chores.

This segment is a very attractive segment. Because of the high volumes it offers.

In my opinion Toyota if at all it heads to the low cost model should keep it exclusively for the small cars. It shouldn't be replicated in its Innova and Fortuner segments.
Today people buy Innovas and Fortuners only because they know it will last literally forever without incurring high recurring costs. A low cost model will undermine that very USP.
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Old 11th March 2020, 20:45   #7
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Default Re: Toyota to follow Maruti-Suzukiís low cost business model in India

What next? Toyota Celerio or WagonR with different names?
Atleast get us a Toyota Jimny before Maruti launches it!

The line up should have been like this -

Yaris hatch
Yaris Sedan
Rush
Rav4
Crysta
Fortuner

Yaris hatch instead of Glanza would have earned Toyota more respect and better sales!

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A timely launch of the Rush instead of launching the Brezza, could have been what Seltos is for Kia!

Toyota to follow Maruti-Suzukiís low cost business model in India-toyota_rush_.jpg

Rav4 is an excellent product to hit the sweet spot, where Jeep compass and alike are dominating!

Toyota to follow Maruti-Suzukiís low cost business model in India-maxresdefault.jpg

Quote:
Originally Posted by nikhilthegunner View Post

What do you think? Will Toyota quality get compromised in this effort?
Mass vs class! Low cost and quality/class cant exist together. There has to be some compromise.

Last edited by Samba : 11th March 2020 at 20:51.
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Old 11th March 2020, 21:16   #8
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Default Re: Toyota to follow Maruti-Suzukiís low cost business model in India

With the way things are going, only hope for any sort of good product is our homegrown brands.

Come on Tata and Mahindra, rooting for you both.
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Old 11th March 2020, 22:24   #9
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Default Re: Toyota to follow Maruti-Suzukiís low cost business model in India

Really confused about the strategy Toyota is trying to execute. For a manufacturer with virtually every segment of cars under its global portfolio, they can beat every player in the Indian scene if they want. Instead, they have a partnership with the segment leader and tries to badge engineer their cars. The only way this strategy makes sense is if they get to be the number one manufacturer in India overnight with some stock play with Suzuki.

Hyundai's strategy seems more coherent and purposeful at this point. They seem to have a well-thought-out plan to replicate their global strategy in India as well.
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Old 11th March 2020, 22:39   #10
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Default Re: Toyota to follow Maruti-Suzukiís low cost business model in India

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Originally Posted by padmrajravi View Post
Really confused about the strategy Toyota is trying to execute.
I was thinking about the same just now. How difficult it is for them to bring their Rush and pit it against Seltos/Hector? RAV4 against Harrier/Compass? And for god sake give a modern ICE with Android/Apple car play? Their strength is with reliable diesel SUV/MUVs and rather than milking that, they are trying to enter a low cost model which backfired miserably with their Etios attempt (at least among private buyers). Only time will tell what their strategy is
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Old 11th March 2020, 23:37   #11
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Default Re: Toyota to follow Maruti-Suzukiís low cost business model in India

Arrogance, sheer arrogance nothing else.

Toyota is drunk on pride of its famed 'T' logo. Having your eyes elsewhere while your legs are walking to a pit approach, IMHO.

What is this company trying to do? Compete with whom? Their portfolio will soon be swarmed with cheap Maruti products and then will start fleecing more for authentic Toyota models in future, looks like.

Forget other foreign players, just turn your head and look at what the TATAs and Mahindras are doing! This is a land of opportunities (the KIA Carnival being the case here), we love companies that show commitment, believe and treat us as a mature market! If there is one company that thinks we are shitty headed and deserve nothing better in life, it is Toyota!
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Old 11th March 2020, 23:56   #12
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Default Re: Toyota to follow Maruti-Suzukiís low cost business model in India

Quote:
Originally Posted by navpreet318 View Post
Who says our purchase power hasn't grown? Have you seen the sheer number of Luxury cars sold Month on Month. Have you seen the Used Luxury car dealers which have cropped up?
How has Toyota been able to jack up the prices of the Innova and Fortuner to unheard levels without offering ever 50% of the features which competition offers. And yet we still line up for their vehicles.

.
Spending overall has reduced, automobile industry has shrunk, luxury car sales has huge potential in India but economic conditions aren't that great at the moment. You have got to go the opposite direction now.

Luxury car segment is very small in our country, car ownership levels are dismal to say the least. Maybe Toyota needs to utilise it's installed capacity , only way to do it is by making vehicles that are selling - a lot - like Maruti volumes, to do this Toyota now has to adopt Maruti ways of doing things. Can't blame them as well because Maruti makes sense to most indians, just as reliable and a lot more VFM.

This is about survival, you have to do this or else end up like the FCA, GM and maybe even like the VW soon.
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Old 12th March 2020, 00:00   #13
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Default Re: Toyota to follow Maruti-Suzukiís low cost business model in India

If there is one thing I have learner working with Toyota over the last 15 years is that they never try to make a quick buck. The car sharing with Suzuki is purposeful and is a learning process for Toyota about low cost car sales and service in India. Most of the volumes for cars being shared by Suzuki will be outside India in Africa presumably. The actual fruits of this partnership in the short term would be visible by 2023 when Toyota is rumoured to share their vehicles with Suzuki. Simultaneously Suzuki will be incorporating Toyota's Hybrid / EV knowhow in to their next gen Heartect platform vehicles presumably like Baleno, Ciaz etc. In the longer term, I see Suzuki being a part of Toyota.
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Old 12th March 2020, 00:13   #14
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Default Re: Toyota to follow Maruti-Suzukiís low cost business model in India

It seems that for Toyota - Maruti ki naa dosti achi, naa hee dushmani.

English translation: Toyota is stuck between a rock and a hard place
On one hand, Toyota isn't able to compete in Indian market due to their poor product portfolio. On the other hand, a tie up like this will just end up diluting their brand. But it seems rather than taking the fight to the competition, they have decided to throw their weight around and take the easy way out here.
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Old 12th March 2020, 00:25   #15
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Default Re: Toyota to follow Maruti-Suzukiís low cost business model in India

Quote:
Originally Posted by Kosfactor View Post

Luxury car segment is very small in our country, car ownership levels are dismal to say the least.

This is about survival, you have to do this or else end up like the FCA, GM and maybe even like the VW soon.
Thank you for saving me a lot of typing by saying what I was going to say.

Anyway I think Toyota is doing this to be able to fall in line with the Cafe norms.
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