[V.Narayan]

If I were an investor in TKM then putting emotions aside I would back them on their strategy to take over the middle segment of the market by rebadging Maruti cars, using Maruti's manufacturing base and boosting up TKMs future sale of spares not to mention make things even more profitable for TKMs dealer network. Without paying very much {Toyota Japan invested 96 billion Yen into Suzuki Japan i.e. $850 million} Toyota leveraged the small & mid market emperor of the India auto world and has gained a foothold which is likely only going to grow. And where TKM is concerned they've done this without investing in fresh capital expenditure and yet will reap the sales margin i.e. improve the return on capital invested in TKM.

So while I can understand and empathize with Team BHP car enthusiasts bemoaning the rebadging, the paucity of real Toyota products in India and the high prices of Fortuner & Innova from a strictly business point of view they've done a great deal. And while Team BHP car aficionados may not buy rebadged Suzukis there are enough customers out there who disagree. Our hissing and cursing will make no difference so long as customers out there vote with their wallets.

As for quitting India. No. Toyota is no Ford Motor Co. They are in fact digging their heels into the 5th largest car market in the world. In the next decade I suspect their pick-up trucks and buses will also line up in India.

As I said at the start read this post with emotions locked away.

[Simhi]

My two cents - As pointed by others, it is just a blip due to the pandemic year where many things were beyond the control of the manufacturer. It is clear that Toyota never compromises on profit margin and hence increases price of its cash cows year after year.

Though I own a Yaris and would never look at rebadged Maruti cars, I can very well understand Toyota strategy here, that is to keep the dealers happy. We all know the dealers make more money out of service than sales. If customers are ready to buy rebadged cars via Toyota and if this strategy keeps Toyota dealers happy then why not. Toyota can keep dealers happy without incurring huge CAPEX.

In my opinion, instead of bashing Toyota and comparing them with other brands like Hyundai, Kia, MG, Tata, Mahindra etc, we, enthusiasts should look at India specific regulations and see if it makes sense to have a uniform tax structure, which is not based on factors like length of the vehicle (4m rule), engine size (1200cc petrol, 1500cc diesel), ground clearance and so on.

I am totally in for cars being manufactured in India as it ensures localization and develops the whole ecosystem of auto ancillaries and generates employment. I think, local manufacturing is what government should stress upon instead of coming out with absurd rules to favour few domestic manufacturers. I believe, we have given sufficient time to protect our domestic manufacturers. Domestic manufacturers have gained the required know how and can tackle any competition.

Just imagining if some of the local mobile manufacturers forced government to come out with taxation rules based on memory, processor speeds, screen size, etc and forced manufacturers such as Apple to price their mobiles exorbitantly or forced them out of the market. We will be bashing Apple saying that they do not innovate products for the second largest mobile market of the world.

The point I want to put across is let’s not kill innovation through absurd rules and provide a level playing field for all players. Let’s not restrict customer choice. In the end, customer is the king, and he will purchase things in which he sees value.

[OffRoadFun]

Originally Posted by Brumby

Its really strange that even after selling their vehicles at more than twice the price (as compared to the rest of the world barring a few countries), Toyota is still at loss. How automobile manufacturers amass losses is beyond my understanding, specially when every single rupee increase in production and tax is totally passed on to the customers.
The way the prices are discounted, by the premium segment makes me wonder how big is the profit margin in the automobile sector.

On road prices of vehicles in India are high because of high cost of raw material (steel), absurdly high excise duties and road taxes bordering on daylight robbery. Add to that the lockdown, poor infrastructure leading to inventory losses and Toyota factory shutdown due to low demand as well labor unrest and the company makes losses.
BTW, worldwide, margins are thin in auto business. Ford and GM don't even have 5% margin if I recall correctly.

[Encyclopedic]

When the Japanese brought their superior technology to India nobody felt sorry for Ambassadors,Contessa,Rajdoot etc. Now it seems the tables have turned and its the Indian manufacturers who are bringing in better products.Ultimately, Indian consumer has given its verdict that a superior product will flourish.

[Dry Ice]

I was just curious to understand if there is any sort of royalty at play here similar to Maruti. Toyota Kirloskar not being a publicly traded company here does not help, but I was able to find an appeal filed by the company in KA HC for some dispute with the IT Deptt.

It is possible that a majority of the “profits” are passed off as royalty payments to the parent in Japan. As quite obviously, there is not much of an R&D setup or any expansion plans here where the money could be invested.

So this “loss” actually becomes a notional thing. Also if you go by the actual sales, it seems quite surprising that they were only making profits in 100s in the prior years.

https://indiankanoon.org/doc/183272580/

It is also not disputed that while computing the manufacturing segment results the TPO himself had accepted royalty as a part of cost.

[arun_m5]

Originally Posted by AllisWell

Is this a joke? Toyota doesn't even have a car competing Seltos and Creta. Toyota has also started re-badging Maruti which is essential known only for it's cost cutting and fuel efficiency.

Toyota doesn't have superior mechanicals. There are very few mechanical failures in today's cars. The failures are usually related to the ever increasing technology present inside the cabin, which Toyota doesn't even offer. Consumers are not blinded by lower prices. Toyotas are priced so very exorbidantly high with such fragile portfolio of cars. A common man can't afford an Innova nor a Fortuner.

The Yaris was a pricing disaster. You can't price a new sedan which costs more than the segment leading City and expect people to flock to the showrooms.

The day when Toyota decided to re-badge Maruti marked its end of legendary reputation. It doesn't care about it's customers, nor about safety of the vehicles sold. If they do choose to shut shop, so be it. It's not like they are offering cars in every segment anyways. Customers have literally nothing to lose.

Toyota has the RAV4 which is a segment leader in the rest of the world which if they bring here, will definitely show how much of a shitty product the Creta and Seltos really are. "Toyota doesn't have superior mechanicals." This is pure ignorance and shortsightedness, their vehicles are the one of choice for law enforcement, taxi drivers, uber drivers, the UN of all things, state heads when travelling to inhospitable locations. Their mechanical prowess is simply unmatched to the level that the makers of creta and seltos can only aspire and dream about. I rest my case, It's sad that people like you are looking forward to a future where cars that look and feel good dominate the market over cars that actually work, have high resale value and are built to last over a decade. Planned obsolecense is something Toyota doesn't incorporate and unethical companies like Hyundai and kia do it on a large scale.

[Kosfactor]

Originally Posted by arun_m5

Toyota has the RAV4 which is a segment leader in the rest of the world which if they bring here, will definitely show how much of a shitty product the Creta and Seltos really are.

Originally Posted by arun_m5

Planned obsolecense is something Toyota doesn't incorporate and unethical companies like Hyundai and kia do it on a large scale.

Lets not generalize that way, Land Cruiser and RAV4 are not the same. Camry & Etios are not the same.

Here I have selected the most popular variants of RAV4 & Seltos as per Edmunds, you can see the difference in price.



Prices from the States (Edmunds) - KIA is significantly cheaper and is a smaller car as well however it comes with 10 year powertrain warranty, lower running and maintenance cost as well over 5 years.

[arun_m5]

Originally Posted by Kosfactor

Lets not generalize that way, Land Cruiser and RAV4 are not the same. Camry & Etios are not the same.

Here I have selected the most popular variants of RAV4 & Seltos as per Edmunds, you can see the difference in price.

Attachment 2223359

Prices from the States (Edmunds) - KIA is significantly cheaper and is a smaller car as well however it comes with 10 year powertrain warranty, lower running and maintenance cost as well over 5 years.

So you think comparing an AWD mid-high variant of the RAV4 to a base model seltos is fair? Thankfully people in the US don't pick cars because its cheaper and has a fancy feature list on paper. Reputation, track record, reliability and service quality goes a long way. The RAV4 despite being 30% more expensive according to your biased comparison, outsells the Seltos 10x over in the US (source below). RAV4 sells as many units in a month that seltos does in an ENTIRE YEAR! Even though according to you it has "lower running and maintenance cost over 5 years" a fact that you've clearly just made up.

The RAV4 is wider, longer, taller, has adaptive cruise control / TSS 2.0 as standard, much larger cargo space, more powerful and more efficient engines compared to the seltos. The RAV4 even has a hybrid variant which is the most efficient in its class by a long shot! These facts shows you that people that care about actual real world usability, reliability and resale value prefer a Toyota product even though it may be more expensive. No cheap korean shoe box can dethrone the Japanese giant with any gimmicky product anytime soon in any mature market.

Rav4 sales figures - USA

seltos sales figures - USA

[Kosfactor]

Originally Posted by arun_m5

The RAV4 despite being 30% more expensive according to your biased comparison, outsells the Seltos 10x over in the US (source below). RAV4 sells as many units in a month that seltos does in an ENTIRE YEAR! Even though according to you it has "lower running and maintenance cost over 5 years" a fact that you've clearly just made up.

Not at all - here are some more things.

As mentioned earlier, the comparison as well as maintenance cost is from Edmunds. The point is that your claim of planned obsolescence does not make sense when Toyota offers 5 year warranty and KIA offers 10 year warranty.

Toyota entered the market in 50s and got popular during the oil crisis a few decades afterwards. Koreans entered in the late 80s and 90s, so although Hyundai group is the 5th largest car manufacturer in the world, they are not as big as Toyota in US. So where do they stand in the market?

Hyundai + KIA has sold more than Honda thereby taking the 4th spot in sales. So the sales argument wont fly anymore, at least in the US. Koreans are very strong in their crossover SUV game and is gaining market share year on year.

[arun_m5]

Originally Posted by Kosfactor

Not at all - here are some more things.

As mentioned earlier, the comparison as well as maintenance cost is from Edmunds. The point is that your claim of planned obsolescence does not make sense when Toyota offers 5 year warranty and KIA offers 10 year warranty.

Toyota entered the market in 50s and got popular during the oil crisis a few decades afterwards. Koreans entered in the late 80s and 90s, so although Hyundai group is the 5th largest car manufacturer in the world, they are not as big as Toyota in US. So where do they stand in the market?

Hyundai + KIA has sold more than Honda thereby taking the 4th spot in sales. So the sales argument wont fly anymore, at least in the US. Koreans are very strong in their crossover SUV game and is gaining market share year on year.

The comparison was between RAV4 vs seltos, the RAV4 maybe more expensive, but it is objectively better and arguably on a different level altogether compared to the seltos. If you're combining sales of Koreans, lets combine sales of Toyota, Honda, Mazda, Mitsubishi and Daweoo to make a point like you did.

Doesn't matter when they (koreans) entered the market, they're still very far away from a product quality standpoint compared to the Japanese, sadly people in India judge product quality by infotainment response times and trim feel, which is not what you'd be doing when you're on a road trip in the middle of the night with a family in the car. You want vehicles that withstand the test of time, stay relevant, hold its value and work in the most demanding conditions which is where the Japanese are 10 notches above the koreans. Toyota leaving the indian market will be the worst thing to happen in the automotive scene in the history of the country and I do wish they stay.

[Mr.Ogre]

Originally Posted by 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.

I totally agree with you and I am not sure if we should be happy at the thought of another manufacturer like Toyota or Honda leaving our country. At this rate we wont be left with much choice other than Maruti, Tata, Mahindra and Korean twins, and of course other luxurious brands.

It is dreadful even thinking about it. In the current scenario anyone who wants a reliable offering without servicing hassles choices are very few.

[CarNerd]

Originally Posted by arun_m5

Toyota has the RAV4 which is a segment leader in the rest of the world which if they bring here, will definitely show how much of a shitty product the Creta and Seltos really are.

Then why doesn't it bring the RAV4 to India and show the Koreans? What is it afraid of? What happened to their shitty Etios?

Originally Posted by arun_m5

I rest my case, It's sad that people like you are looking forward to a future where cars that look and feel good dominate the market over cars that actually work, have high resale value and are built to last over a decade.

So according to you, cars that look and feel good don't actually work, don't have high resale value and don't last over a decade? Bizzare logic. My uncle had a Santro (1999 model) which he bought in 2002 and sold it in 2013 to a known person who is still using it. That is a total of 22 years. There are many examples of Hyundai cars being run for more than 1 lakh kms in this forum. So it's not only Toyota that can last for decades.

Originally Posted by arun_m5

Planned obsolecense is something Toyota doesn't incorporate and unethical companies like Hyundai and kia do it on a large scale.

Toyota is ethical?

You have no idea about how ethical Toyota is, do you?

Toyota was recently fined $180 million for EPA non compliance: https://www.google.com/amp/s/arstech...-regs/%3famp=1

In 2014, Toyota paid $1.2 billion for misleading regulators:

http://youtu.be/qel9R4rPY14

Not just that, according to Violation Tracker, Toyota has far more fines & violations than Hyundai:

Originally Posted by arun_m5

These facts shows you that people that care about actual real world usability, reliability and resale value prefer a Toyota product even though it may be more expensive. No cheap korean shoe box can dethrone the Japanese giant with any gimmicky product anytime soon in any mature market.

Talking about reliability, here are the problems of RAV4 over a few years: https://www.cashcarsbuyer.com/toyota-rav4-problems/

The Koreans are not behind the Japanese in reliability:
https://www.google.com/amp/s/www.for...-rankings/amp/

If the Koreans were that bad, how come they gained from 11th position in 2000 to 3rd position in 2017?

Link: https://www.quest-trendmagazine.com/...facturers.html

Originally Posted by arun_m5

You want vehicles that withstand the test of time, stay relevant, hold its value and work in the most demanding conditions which is where the Japanese are 10 notches above the koreans.

10 notches above the Koreans? Do you have any report that says that the failure rate of Korean cars is 10 times that of Japanese cars?

Remember even Nokia was the largest phone maker at one time and known for reliability before being overtaken by Korean Samsung.

[ashis89]

Originally Posted by arun_m5

Toyota has the RAV4 which is a segment leader in the rest of the world which if they bring here, will definitely show how much of a shitty product the Creta and Seltos really are.

If and when Toyota brings the RAV4 to India, it will compete with the Fortuner, rather than the Seltos. Reason being our tax structure.

That said, there are enough examples on our forum, of Hyundai, Mahindra or Tata clocking a few lakh kms with basic maintenance. A BHPian recently clocked 3L km on his diesel Verna which still runs on stock clutch. This shows most cars today are reliable and can run long.

Originally Posted by Kosfactor

Here I have selected the most popular variants of RAV4 & Seltos as per Edmunds, you can see the difference in price.

Unfair to compare as the Seltos sold in the US is a global model while what we get here is a heavily modified "Indianized" version. Toyota doesn't cut corners when they launch a model here and have to pass on the costs to the consumer (or absorb losses).

Can't say I have experienced the US version of Seltos but I have travelled in RAV4 quite a few times. It is far better than the Indian Seltos.

Originally Posted by CarNerd

Then why doesn't it bring the RAV4 to India and show the Koreans?

Most of the successful automotive companies have designed India specific models - having smaller engines, shorter length, lighter weight, different platforms, structures and other cost cutting methods to price the car competitively.

That involves a lot of investment, R&D and companies would look for volumes to recoup their investment. And some other companies might not want to tamper with their global models too, to customize it for a local market.

Toyota tried this first approach with the Etios twins which were engineered well, had good engines, was priced well but lacked looks/features. Then they got the Yaris with good features too but that ended up being over-priced. Corolla and Camry are top sellers worldwide but were considered over-priced in our price sensitive market. RAV4 or other Toyota models would get a similar response if launched in India.

Ford went through the exact same experience and finally gave up. Toyota is staying relevant with the times by getting rebadged Maruti which will give them volumes to stay afloat.

[Brumby]

=BTW, worldwide, margins are thin in auto business. Ford and GM don't even have 5% margin if I recall correctly.

Thank you for a bit of detail regarding the profit margins of automobile manufacturers.

My comment was based on year end discounts offered by the car manufacturers, specially premium car segments, which are around 10%.

Even Maruti-Suzuki refund a good amount to initial S-cross buyers.

Though I may sound dumb, but as I understand no manufacturer sells the product to the customer at just 5 to 10% margin and every bit of increase in production cost is immediately passed on to the end user.

[sunilch]

Originally Posted by OffRoadFun

BTW, worldwide, margins are thin in auto business. Ford and GM don't even have 5% margin if I recall correctly.

No that is not the case. Most manufactures have near fixed margins and those are higher than what you have quoted.

Mainstream makers may have lower margins than luxury ones though. Luxury car makers (BMW, Audi, Merc) have margins in the range of 20-30%.

It is dealer margins that are low in India and could be the same at other places too across the globe. What you are referring to is the dealer margins.