[ronford]

A well-deserved one I can say. I sat in a 40 lakh Fortuner (2018 model) and was astonished to see it had manual IRVM. I pitied the owner who paid well over 40 big ones and had to change the mirror manually when even 8 lakh hatchbacks are getting it.

Also, another big blunder was plonking 1.4 Diesel in the Corolla. I mean seriously? 18 Lakh for this?

[sunilg33]

I think the losses are due to the 3-month long strike and not due to lack of demand.
They had taken a strong stand against the union and the factory was literally locked out for quite a few days and working at 20-25% capacity for a couple of months.

[Geta]

Let us not attach too much importance to this loss as this was the pandemic year (2020-21) and we had extensive lockdowns across the country for 2-3 months with zero vehicle sales. I hope Toyota becomes profitable again in 2021-22.

I really hope they succeed. Toyota failing is a very bad sign for the Indian auto industry.

[WorkingGuru]

Crysta and Fortuner are probably the most expensive mass market cars selling in India. Lockdowns & union standoffs both put together made an extraordinary scenario, also I'm sure COVID left the dealers bleeding. So end of day TKM will need to re-negotiate the heavy royalties.

They have the consumer trust, they need to monetise it by selling in larger scale.

[anjan_c2007]

TKIM has been banking on its Innova and Fortuner sales and both are with inflated price tags, that many customers have taken it on their stride to acquire something with the "Toyota" badge. Both these once money spinners are getting dated and are not the best choice for many customers, as the competition offers a better choice.

The TKIM management appears to be no less puffed up as compared to quite a few European or American car makers, who entered, made losses and ultimately quit. Toyota Motors at the international level has dozens of models in the mid-size and small size segments with several dozen engine options. Despite their in house car model availability, they have been laid back and have gone on a piggyback ride on MSIL's shoulders. They need to have introspected after withdrawing the Etios and the Etios Liva as to why these failed to sell well and then take proper corrective actions.

The India loss of Rs 55 crore could perhaps get neutralised and turned into profitable next quarters, if TKIM takes corrective steps.

But on the same day the TKIM news poured in, Toyota faces another nightmare. Compounding Toyota's problem at the international level is the fact that their long time steel supplier Nippon Steel is suing Toyota at home for US $ 177 million for infringement of technology patent of the latter by a Chinese company Baoshan Iron and Steel (Baosteel). Baosteel has infringed Nippon's steel patent for non-oriented electrical steel sheets used in EV making. Baosteel after such infringement of intellectual property of Nippon Steel has now become a supplier for Toyota EV's.

[SoumenD]

Wait what? After selling innovas for 30L and Fortuner for 50L still they face losses?

And these cars make insane numbers for their respective segments.

[Carpainter]

That is a news to me but I think their market size has decreased too with the discontinuation of Corolla and then Etios twins. I don't think the rebadged Suzukis have managed to sell in equal numbers as those cars. This may be a temporary phenomenon for them because of the lockdown and labour strike coupled with chip shortage. They may get back to positive bottom line but will their market size get back to the same level with their current portfolio.

[nkrishnap]

Loss reported, price hiked in the coming days. Toyota laughs away to the bank once the volumes pick up as the chip shortage situation improves.

All in all, Toyota is not interested launching any international models here, but just piggy bank on rebadged MSIL cars.

[CARDEEP]

INR 55 crores loss for INR 13000 crores revenue is peanuts. Barely over 0.4% of turnover. It's definitely due to lockdown to a major extent & partly attributable to labour strike at plant (s). For the fixed costs + overheads would anyway have been incurred even when the operations were down.

Toyota India is cash rich & this loss during exceptional/ abnormal period would hardly have any bearing on anyone connected with it's Indian operations in my opinion.

[Kousie_Arima]

Hope this atleast gives them the wake up call to put actual effort and bring their best vehicles to India, some of which I would love to see are RAV4 and Yaris hatch GR! Here's to hoping they won't fall down the same hole Ford did with their lack of innovation.

[Axe77]

IMO Toyota only has its poor management choices (whether local or global HQ) to blame for this predicament. As a brand, they did and ought to operate on a much wider playing field. Instead they have become a two horse company with a slew of moderate badge engineered products to supplement. Even where they can make money their apathy prevents them from milking whatever little they can. A friend of mine was literally lining up to buy a Camry but to no avail.

Toyota has numerous products in its line up which can suit india and for which Indian customers would likely pay a “Toyota” cess / premium as well.

In terms of product offerings:
Get a credible competitor to the Honda City; the i20 (Yaris hatch maybe); Creta segment crossover (Corolla Cross); Tucson segment crossover; Ertiga segment MPV etc. Get in higher number of units for the Camry hybrid, explore proper hybrid in the above product categories as differentiators and get it via Indian production - CKD or otherwise - not the CBU route. If you get the RAV4, get it at “under” the Camry price.

We’ve got a Chinese company (MG), with all its natural limitations including adverse political perceptions, show more gall and aggression in this market than Toyota with its blue eyed brand value in India.

Looking forward, we need to be aware that diesels are going to get more and more squeezed towards a minority in India with ever tightening norms as well as customer preferences. While the ladder on frame segment will defy this trend overall, we must ask ourselves for how long this is feasible. Their two biggest cash cows are predominantly diesel. In their shoes, I would have actively considered the possibility of a petrol hybrid alternative to at least the Innova. Not sure if that is feasible with the Fortuner as well but if so - definitely worth considering that too.

[Turbanator]

One thing that’s being overlooked by most is their input costs. A simple bolt that most of the manufacturers use costs X times more to Toyota. If someone checks these small things, they will realise the amount of engineering that goes into their product. They are no fools running the largest company in the world, with a reputation that precedes everyone else. It’s a fact that they don’t go for the shortcuts in manufacturing. When others can pick and drop a vendor or change the design/ specs, just at the drop of a hat, TKM enters into long contracts. They have so many checks, many redundant too but that’s their way. All this costs money and also ensures there are no surprises when the customer uses their vehicle.

Suzuki manufactured cars being sold as TKM was probably a stop-go arrangement until TKM start using their excess production line. They took a calculated risk as Suzuki products are otherwise trouble-free so Toyota does not spoil their name and everyone who bought such vehicles knew at the first place that it’s not a Toyota manufactured product. This was never about the money that TKM will earn from such arrangements.

I don’t know why the production of such cars by TKM is getting delayed. Maybe they feel that the current model lineup does not justify production at TKM plants and they may have completely new products, more adapted to our price-conscious market. Will have to wait and see what happens.

But this does not sound good. Like Ford, they may find our market not very interesting considering their overall global sales.

[Sebring]

Who makes profit on rebadged cars? Maruti or Toyota? I think Toyota will only earn in servicing

Originally Posted by samyD

But since the company is now selling rebadged vehicles in the volume category (higher volumes and comparatively thinner margins) I think Toyota will never achieve the operating profit per car

[the.dogfather]

I think the loss is mostly related to the pandemic and the related slowdown in the tourism and taxi segment.
While TKM is selling Maruti cars, on a low profit margin, the majority profit is expected from their own cars.
We need to acknowledge the fact that a major sales component for Toyota cars was towards the Taxi/fleet segment.
The diesel versions of the Innova, Etios and even the Corolla have been very popular in the taxi segment.
The pandemic has hit the tourism sector hard and we rarely see any new taxis on the road. Also the corporate cabs rentals have almost stopped. Many taxis have been put on sale as the owners could not afford the EMIs. I don't remember seeing any new cabs coming on the road in the last two years which was a common sight earlier.
At this point a fleet owner would try to keep risk low and avoid bigger cars like Innova Crysta and stick with the smaller segments.
Even now, as we are hopefully reaching the end of the pandemic, the taxi sector is still going through a bad slowdown. Offices are still closed and people are hesitant to use taxis regularly.

While the new car sales have revived, it's still majorly for smaller cars and still not enough for Toyota to cover up for the void in the taxi demand. I am expecting Toyota to come back to profits once the tourism sector revives.

[discoverwild]

They sell an average 6,000 cars of the Innova and Fortuner month on month, even more earlier. Not taking into account the rebadged Marutis. At an average of 30L per car minus 50% in taxes, their turnover is about 900 Crores per month. That's in the range of 11,000 Crores per year. A 55 Crore loss is not even a mosquito bite. A measly 0.5%.

Bear in mind that all their models are high value, 30L being their lowest priced car for now.