[Vid6639]

Originally Posted by ashlil

Why single out Toyota? Because they are whining loudly, as if they did a favor to India by gracing us with their presence.

They are not the only ones whining. Mercedes has been doing so as well.

It was not a moot point. The point originally was that we get "international" cars only in looks, even though we pay more.

We pay more cause of the tax structure as explained by Turbanotor. It's applicable not just for Toyota but for the entire automotive industry in India hence moot cause all cars are overpriced vs the USA counterpart.

My point is also simple. I don't see anything right in Toyota's whine. Their business strategy is faulty. Where other manufactures diversified their product portfolio, Toyota decided to stick to two cars only. Now that the ban affects those two cars, they act all hurt. They are being penalized for their faulty strategy.

Why is it faulty? Because they chose to offer big full size SUV's and MPV's with larger engines that meet all emission regulations when they were launched? Only to have the law changed with no plausible explanation as to why they were banned. They were caught at the wrong end of the stick for not doing any wrong. Their strategy more than faulty was different.

Other manufacturers just couldn't sell cars in that segment and realised if you want to survive in India sell cheap low end cars with small engines case in point Honda, Ford, Renault etc....

[RickyC]

Agree with VID here...
Toyota is not cribbing unnecessarily...They have been producing engines adhering to the norms of the country and now suddenly find themselves inoperative in the biggest market of this country.. Delhi-NCR, what with repercussions likely to go far beyond this and Kerala.
While they do have a series of Petrol Engines/CNG compatible engines which are doing duty on Innova/Fortuner in countries like Thailand, it may not entirely work here as bigger vehicles would rather get a robust diesel engines considering the enviournment, fuel costs, fuel quality etc thus making these engines unviable.
I wont be surprised for one if Toyota plans to take a back seat and hold their horses for the time being.

[riteshritesh]

Originally Posted by Aaron:)

Also, a company like Toyota or Mercedes cannot react the same way as Mahindra. They cannot spend millions on R&D just to develop engines that conform to the ever changing rules in India.

If they don't react, they will have to shut shop and exit the country. In the first place, they decided to enter the country to make money and not as some CSR exercise. Now that they have entered, they have to glocalise or exit. However unjustified the environment to do business is, in a country, if they don't adhere to the norms, they can exit. They surely must be lobbying and have filed counter cases, but whining won't get them anywhere. They need to have plan B, Plan C till plan Z ready or they can kiss the Indian market good-bye. Someone else will fill their empty shoes.

[RavenAvi]

Toyota-Kirloskar Motor India and Mercedes-Benz are budgeting financial support for their dealers and their staffs in Delhi and it's satellite cities. They are also working on diversifying the jobs of the existing staffs of these regions so that they are not affected much by the diesel ban.

For the record, Toyota-Kirloskar has 10 dealer outlets in the Delhi-NCR region (same number as Mercedes-Benz), which contributes to over 14% to the company's overall sales in the Indian market.

The diesel ban in the Delhi-NCR region has resulted in the production loss of around 11,000 vehicles in the auto industry, which has affected about 5,000 jobs, according to SIAM.

"We have decided to support our dealers and have earmarked some cash flow to help them retain employees," said Shekhar Vishwanathan, vice chairman at Toyota Kirloskar Motors. "We are carefully assessing the situation at our dealerships in the NCR and extending financial support as per their requirements."

Given the uncertain business environment attrition rates have picked up, Vishwanathan said. Details of the subsistence package, which may include financial assistance for payment of salaries to employees at dealerships, are being worked out on a case-by-case basis.

Mercedes-Benz, which is among the worst affected in the luxury car industry, is restructuring roles of employees in the region. "We haven't cut down on our staff strength in Delhi NCR dealerships. Lot of their roles have been diversified, but there has been no cut in jobs", said Roland Folger, managing director at Mercedes-Benz India. "We have to wait and see what the next verdict holds for us," he added.

Since the ban in NCR came into effect on December 16, Toyota Kirloskar has lost around 7% of its annual sales, prompting the auto maker to apply brakes of new model launches and fresh investment. Toyota sold 34,989 vehicles between January and April 2016, a 30% drop from a year earlier. Sales of best-sellers Innova and Fortuner have declined by 29% and 57%, respectively, in the first four months of 2016.

Mercedes-Benz, which has been working on arresting sales slide in the NCR through higher allocation of petrol-run models, decided to put on hold planned investments until there is further clarity on the fuel policy.

"We have invested Rs 1,000 crore in our production facility in Pune alone. Additionally, we have another Rs 750 crore of investment from our investors across markets. Regarding any new investments, we will finalise it only when we have some clarity on the road ahead for the industry and for us," Folger said. "We are ready to invest as we are committed to the market and we see the potential but we need assurance for our business to sustain."

ET

[CrAzY dRiVeR]

Looks like Toyota is having doubts about bringing the new Fortuner to India. Quite sad if true, but I wouldn't blame them either. As a buyer, I'm worried about purchasing a diesel till the confusion is sorted. Might be big decisions for them to make, considering the investments needed!

http://www.cartoq.com/ngt-ban-impact...-india-at-all/

[riteshritesh]

Originally Posted by CrAzY dRiVeR

http://www.cartoq.com/ngt-ban-impact... india-at-all/


Quoting from the article:
Toyota does have a 2.7 liter inline-4 petrol (164 Bhp-245 Nm) engine that it offers on the all-new Fortuner. This engine will soon be available on the Innova Crysta sold in India. However, this petrol motor is expected to be less fuel efficient than the GD diesel engine range.

What kind of FE does the petrol engine give? If they consider that the Diesel engine returns a good average, I wonder if they are talking of 4-5 kms/litre. The Fortuner hardly must be giving a 8~10 kmpl in city driving. Aren't countries using this petrol version concerned about FE?

[ashlil]

Originally Posted by Vid6639

They are not the only ones whining. Mercedes has been doing so as well. .

My eyes are not going all dewy for Mercedes, either.

Originally Posted by Vid6639

We pay more cause of the tax structure as explained by Turbanotor. It's applicable not just for Toyota but for the entire automotive industry in India hence moot cause all cars are overpriced vs the USA counterpart.

If tax structure could explain the huge price difference, then S-Cross should cost more in India than in UK. (And local production does not explain the price either, since prius is not locally produced in the UK) Could you just take the time to compare the tax structures and see how much difference they make in ex-showroom price? The point i made originally still stands: we get less than international models, though we pay more. Not moot, since it is part of a bigger faulty strategy and there were many claims in the thread about how Toyota sells "international" products.

Originally Posted by Vid6639

Why is it faulty? Because they chose to offer big full size SUV's and MPV's with larger engines that meet all emission regulations when they were launched? Only to have the law changed with no plausible explanation as to why they were banned. They were caught at the wrong end of the stick for not doing any wrong. Their strategy more than faulty was different.

It is faulty because it is failing. If their strategy was merely different, they would not be whining (louder than their diesel Etios) now. It is extraordinarily short-sighted to rely on just two models and think that you would be minting money indefinitely. Rightly or wrongly, the laws will keep changing. It is no use blaming what is not in your own control. When they were making money, they were not going gaga over the great laws of India, were they?

[Vid6639]

Originally Posted by ashlil

If tax structure could explain the huge price difference, then S-Cross should cost more in India than in UK. (And local production does not explain the price either, since prius is not locally produced in the UK) Could you just take the time to compare the tax structures and see how much difference they make in ex-showroom price? The point i made originally still stands: we get less than international models, though we pay more. Not moot, since it is part of a bigger faulty strategy and there were many claims in the thread about how Toyota sells "international" products.

While you make an interesting point but this is going around in circles. Earlier comparisons with US market which has different pricing and now with UK which is again different.

Why the S-cross, did you check the prices of the VW Polo, Hyundai i20 and other similar cars in UK? All of them are priced more than India because the taxation is totally different.

The Prius in India is so expensive because it is a CBU and any CBU car imported will attract nearly 110% duties vs one that is locally manufactured.

The ex-showroom price of a car in India is inclusive of the duties and taxes. These duties are different depending on the amount of localization for that car.

It is faulty because it is failing. If their strategy was merely different, they would not be whining (louder than their diesel Etios) now. It is extraordinarily short-sighted to rely on just two models and think that you would be minting money indefinitely. Rightly or wrongly, the laws will keep changing. It is no use blaming what is not in your own control. When they were making money, they were not going gaga over the great laws of India, were they?

We're going around in circles aren't we. Why is it failing? Because the laws are silly and are making them fail.

You cannot pass a judgement overnight banning the sale of cars with greater than 2000cc diesel engines. Which country has done this? They are always done in a phased manor, allowing the OEM's to meet the set deadlines for that transition.

You can read this thread to understand why this rule is so silly:

https://www.team-bhp.com/forum/india...any-sense.html (Why engine capacity-based diesel vehicle bans don't make any sense)

[ashlil]

Originally Posted by Vid6639

While you make an interesting point but this is going around in circles. Earlier comparisons with US market which has different pricing and now with UK which is again different.

Why the S-cross, did you check the prices of the VW Polo, Hyundai i20 and other similar cars in UK? All of them are priced more than India because the taxation is totally different.

The Prius in India is so expensive because it is a CBU and any CBU car imported will attract nearly 110% duties vs one that is locally manufactured.

The ex-showroom price of a car in India is inclusive of the duties and taxes. These duties are different depending on the amount of localization for that car.

I used UK example, since the Prius sells at about 20Lakhs (almost same price as the US) there as opposed to India. My point has been that tax structure alone cannot justify the astronomical figure Toyota are charging in India (and for less equipment) and I thought that this example proves that villain cannot be tax alone. (Other manufacturers charging less or more does not prove anything one way or other and hence I ignored those)

Originally Posted by Vid6639

We're going around in circles aren't we. Why is it failing? Because the laws are silly and are making them fail.

You cannot pass a judgement overnight banning the sale of cars with greater than 2000cc diesel engines. Which country has done this? They are always done in a phased manor, allowing the OEM's to meet the set deadlines for that transition.

You can read this thread to understand why this rule is so silly:

https://www.team-bhp.com/forum/india...any-sense.html (Why engine capacity-based diesel vehicle bans don't make any sense)

Here also, my point has never been the logical correctness of the laws. Relying on just two (overpriced) models for success is a silly strategy for Indian market. Since they have done this (ignoring the potential for their smaller offerings combined with hybrid tech), their plight should not evoke our sympathies.

[Vid6639]

Originally Posted by ashlil

I used UK example, since the Prius sells at about 20Lakhs (almost same price as the US) there as opposed to India. My point has been that tax structure alone cannot justify the astronomical figure Toyota are charging in India (and for less equipment) and I thought that this example proves that villain cannot be tax alone. (Other manufacturers charging less or more does not prove anything one way or other and hence I ignored those)

I thought I clarified this earlier. Toyota is charging as much more than other manufacturers. The Prius example you said was because the Prius was imported CBU and hence attracted 110% import duty. The Camry Hybrid is nearly 8-9 lakhs cheaper than the smaller Prius!

The Corolla in India is priced on par or cheaper with VW Jetta, Hyundai Elantra, Chevy Cruze, Honda Civic. So I didn't really understand what you mean by saying that Toyota is charging astronomically more?

The Civic when it was being sold in India was more than the Corolla for lesser specced car with 2 airbags.

The Hyundai Elantra in India is very good VFM but still doesn't sell as much even with all the features. The petrol corolla has a superior engine and gearbox combination. Yes the corolla misses a few features but they are not charging astronomically more vs the competition here.

Here also, my point has never been the logical correctness of the laws. Relying on just two (overpriced) models for success is a silly strategy for Indian market. Since they have done this (ignoring the potential for their smaller offerings combined with hybrid tech), their plight should not evoke our sympathies.

How do we know they are not working on a smaller car with hybrid tech? Maruti is fooling the authorities as well as the public with the SHVS tech. Maybe Toyota is developing a proper hybrid low cost car.

What you call as overpriced models have been perceived as VFM in the minds of lakhs of buyers. The Innova is 10 years old and in the entire 10 years it was on sale it was at the top. Not one manufacturer could dethrone it. Even if it was overpriced, nobody put a gun to the buyers head to go buy it. They bought it cause they wanted to and saw value in what the Innova offered. Same with the Fortuner. 1000+ cars every month in last 7 years since launch for a 20-30L SUV. Buyers could have got a Scorpio or Safari or Endy but still went with the Fortuner.

They tried their hand at the low end segment with the Etios and Liva but failed miserably. They realised they can't compete with Maruti and Hyundai on cost as the compromises were too much and announced their failure publicly.

So rather than focusing on low cost vehicles with small margins but more volumes they have decided to stick to what has worked and what they are good at making.

But, they are being punished for no real fault of theirs. If they don't want presence in the low end of the spectrum and want to be exclusive, it's their strategy. Crying foul over the fact that they don't make cheap small cars doesn't make sense.

They even rejected the idea to make a sub 4m SUV or sedan especially for India: https://www.team-bhp.com/forum/india...ys-toyota.html (No sub-4 meter SUV or sedan, says Toyota!)

And you will agree after reading the article I mentioned earlier about the NGT ban that the displacement rule is not related to emissions and for all you know they might be polluting lesser than the 1.5L diesel engine in India but are still being punished.

[Samurai]

It is clear that Toyota doesn't want to drop their quality so low that it becomes indistinguishable from the rest. This month Global NCAP released the test results of many Indian cars, all got zero star. Meanwhile, Toyota's smallest car Etios has 4 star Global NCAP safety rating.

Toyota is the largest automaker in the world and has been so for the last few years. They obviously understand business strategy, I don't think they need lessons on that from keyboard warriors like us. Their strategy for India appears to be low volume, high margin. That strategy can only work with high quality products. If they try to compete with zero NCAP starred cars, they'll have to drop both quality and price. Then they will lose their niche. Instead, they should take on the NGT, using the emission data which is available with ARAI. When the courts realise that the diesel ban is based on fantasy and not data, the ban will be revoked. That is how Toyota should tackle it.

Do we really want Toyota to drop their quality to compete with zero starred cars? Maruti Swift (India) has 0 star, while Suzuki Swift (Europe) has 5 stars. Suzuki does that because India is their biggest market. Toyota doesn't have to do that, they are the biggest in the world. Why compromise their brand making cheapo stuff for India?

And Suzuki doesn't give us their 5 star Swift or 3 star Alto for an obvious reason. It will be too expensive for Indian market. I had posted about it here.

[RavenAvi]

Looks like Toyota's Delhi-NCR operations won't get any respite from challenges anytime soon.

Now, one-third of the entire sales staff at all of Toyota's Delhi-NCR dealerships have quit their jobs, after the May 2016 verdict of the diesel ban being continued.

This, despite Toyota extending financial support to the dealership staffs and their wage costs, diversifying the staffs' jobs, and offering higher incentives to them.

After the diesel ban came into effect, Toyota has been facing a continuous sales decline of 5 straight months. Even then, it has been trying to help out it's Delhi-NCR dealerships by several counter measures - taking back all stocks of Innova and Fortuner with no extra cost and providing extra financial support on the interest loss on the blocked inventory, providing extra credit days for spare parts, increasing the allocation of Camry Hybrids, and offering additional incentives on sales of the Etios and the Liva.

Akito Tachibana, managing director, Toyota Kirloskar Motor:

“The most impacted stakeholder is the NCR dealer. I visited the dealerships recently and they are in a very difficult situation because 70 per cent of sales are gone thanks to the ban on Innova and Fortuner. About 30-40 per cent of the sales staff also resigned to seek other job opportunities. The big impact for the owners of these dealerships is the loss of human resources they developed for years. That is my biggest concern."

N Raja, senior vice-president and director (sales division), Toyota:

"We have not spent on ads on Innova and Fortuner in the NCR. We are trying to use some marketing budget to keep the dealers motivated. The company has increased its share in advertising cost as their (dealers) earning was impacted we did not want them to bear this expense. Our overall strategy has been to retain the teams at dealerships. The cost of manpower they did not need owing to a drop in sales has been taken on by the company. We will continue to support the dealers till the ban continues."

Business Standard

[Turbanator]

despite Toyota extending financial support to the dealership staffs and their wage costs, diversifying the staffs' jobs, and offering higher incentives to them

I understand a lot of money of these sales guys is dependent on volumes , they get incentives on sales, insurance & accessories so if sales are not happening even if they get complete salary it might not be sufficient. Besides, there are lot of opportunities in market at this time specially in smaller cars where these guys can easily get adjusted.

[R2D2]

Frankly, as a Toyota owner, I am glad they are not getting into the rat race with cut price (and quality) vehicles that do nothing to highlight their proficiency and reputation in producing reliable vehicles. Toyota models may be pretty bland to some, but heck, most will outlast you if you take care of them. My Toyota vehicles have never let me down.

And yes, need I say anything about the after sales? They're at #1 in my >10 years of Toyota ownership.

If I pay a small premium for contemporary products with reliability built in and excellent after sales service to back it up so be it. IMO, in this matter Toyota India is on the right track.

[volkman10]

Toyota halts fresh investments in India; likely to hold some models also.

The company's problems can be gauged by the fact that it invested Rs 1,200 crore for a diesel engine plant that started production only recently. It has set up a capacity for around 1 lakh engines annually, but is utilizing around 30% of this.

The burden of idle diesel engine capacity has started telling on the Indian auto industry. Toyota Motor Corporation, the world's top car manufacturer, has said that it is halting fresh investments in India, while undertaking a review, and will possibly hold some of the models that it planned to introduce

We will bring in some products that were planned, but fresh proposals will be on ice for a while... We will rework product plans, at least till 2020. Some of the products that we had planned to introduce will be re-thought

Similar sentiments are echoed by Honda who shifted focus to diesel recently and is seeing a slump in its diesel car demand.
Fiat a company mainly associated with diesel engines in India,is seeing a skew in its diesel engine demand and hence low factory utilization.

Source