NEWS: Toyota is aiming to cut car prices 30% by 2013

HammerHead · 18th June 2010, 20:40

Came across following news article on The economic times.
IMO this will be excellent step from Toyota. I hope Honda too thinks on similar lines

Quote:

Toyota Motor Corp is aiming to slash its car prices by 30 percent by 2013 through a new cost-cutting strategy to better compete against rivals such as Hyundai, a senior executive said.

Full Article:
Toyota aiming to cut car prices 30% by 2013-Automobiles-Auto-News By Industry-News-The Economic Times

Mods.: Please move the article to appropriate section if it does not belong to this section.

avishar · 18th June 2010, 22:01

This is a good initiative.Car makers have realised that cost is perhaps the most important factor in deciding the success of a model in emerging car markets.30% is a steep drop,that would mean over 3.6lakhs of the price of the corolla!

dragstar · 18th June 2010, 22:09

Hope they don't drop the quality too with the drop in cost. As it is toyota has been stained with the recent car recalls across the globe.

Though I am sure with process engineering and being in production since so long they can shed atleast 20% easily. Lets see what does the competition have to say about it.

kadanaJ · 18th June 2010, 22:23

But wouldn't that just result in a drop in build quality and fit and finish, or does that mean that they will just launch newer base variants with absolutely no features.
Either ways I'm skeptical about this move, it just sounds too unrealistic.

kaviprem · 19th June 2010, 07:05

A basic question - How much its going to increase by then to make this 30% decrease happen ?
OR
Is it something like electronic parts' (Like how cell phone is reducing day by day) price would reduce to have this impact ?

Prem.

Amartya · 19th June 2010, 07:59

Quote:

Originally Posted by kaviprem

A basic question - How much its going to increase by then to make this 30% decrease happen ?
OR
Is it something like electronic parts' (Like how cell phone is reducing day by day) price would reduce to have this impact ?

Prem.

Very prudent points. Also, we need to wait and see whether Toyota actually passes on that difference to the customer. A 30% drop would erode resale value of previously bought cars.

KiloAlpha · 19th June 2010, 09:59

Is this 30% reduction going to be inflation adjusted?
Or will it be that we can buy a Corolla in 2013 for 30% less than what it costs today, in absolute terms?

CARDEEP · 19th June 2010, 10:51

If this means getting more local parts (rather than imported ones), more manufacturing in India & enhancing the production capacity in India, it is good in the long run.

Else, I predict, it may be good for the company, but, not for the consumers, as the reduced costs will increase the demand for a "Toyota", without any tangible in crease in supply of cars.

I believe that they would like to maintain top quality, especially after the US fiasco (which has led to downfall of Toyota's image in US ~ world's biggest car market). Only this way they can remain on their track to become/remain the biggest car maker on planet.

In any case, in future I expect there would be cheaper Hondas, & lesser units of Suzuki. Hyundais, Fords, etc.

P.S. - I could not open the ET link, I haven't read the article. My apologies in advance if my views are similar to those on ET, or if I have missed out something.

deep_bang · 19th June 2010, 12:25

Cars in US cost a lot less than in India. I wonder why is that. Further I wonder if thats what Toyota is trying to fix, and hence reduce the price by 30%.

sachinj12 · 19th June 2010, 12:59

Quote:

Originally Posted by kaviprem

A basic question - How much its going to increase by then to make this 30% decrease happen ?
.

You worded my thoughts.

By the way, 2013 is a long way to go.

da_lowrider · 19th June 2010, 13:14

I believe that it will be inflation adjusted, and the benchmark here is Hyundai's prices - which incidentally happen to be 30% lower- hence that statement should read - on par with Hyundai's pricing, if car prices go up globally so will Toyota's, but by 2013 I guess a corolla and an elantra will be priced on par.

ivar1951 · 19th June 2010, 13:19

Quote:

Originally Posted by deep_bang

Cars in US cost a lot less than in India. I wonder why is that.

Duties and taxes are lower in US. The basic model of Accord costs under Rs. 10 lakh in the US.

narchennai · 19th June 2010, 13:57

30% reduction is possible by localisation and value engineering methods, but to maintain the same product quality that is offered now, must be difficult.

1100D · 19th June 2010, 14:05

Doing the math for the price reduction in the Fortuner. However, before we get all excited, this will in effect be applicable to cars/platforms launched beyond 2013.

ajman28 · 19th June 2010, 16:01

This is good news.

The only point here is that the other manufacturers too are on a similar route.

I remember Maruti had come up with a plan of reducing just Rs.1 from every component. A small sum as this too achieved great results in the end product pricing.

Toyota too must have started similar projects.

Anyway the article says 30% reduction by 2013, so let's hope we see some reduction within this year itself.

18th June 2010, 22:01	#2
avishar Senior - BHPian Join Date: Oct 2008 Location: kolkata/bangalore,india Posts: 2,901 Thanked: 4,143 Times	This is a good initiative.Car makers have realised that cost is perhaps the most important factor in deciding the success of a model in emerging car markets.30% is a steep drop,that would mean over 3.6lakhs of the price of the corolla!
	() Thanks

18th June 2010, 22:09	#3
dragstar BHPian Join Date: Mar 2010 Location: moving around Posts: 78 Thanked: 57 Times	Hope they don't drop the quality too with the drop in cost. As it is toyota has been stained with the recent car recalls across the globe. Though I am sure with process engineering and being in production since so long they can shed atleast 20% easily. Lets see what does the competition have to say about it.
	() Thanks

18th June 2010, 22:23	#4
kadanaJ BHPian Join Date: Apr 2010 Location: Mumbai Posts: 585 Thanked: 958 Times	But wouldn't that just result in a drop in build quality and fit and finish, or does that mean that they will just launch newer base variants with absolutely no features. Either ways I'm skeptical about this move, it just sounds too unrealistic.
	() Thanks

19th June 2010, 07:05	#5
kaviprem BHPian Join Date: Feb 2010 Location: Trichy Posts: 953 Thanked: 834 Times View My Garage	A basic question - How much its going to increase by then to make this 30% decrease happen ? OR Is it something like electronic parts' (Like how cell phone is reducing day by day) price would reduce to have this impact ? Prem.
	() Thanks

19th June 2010, 09:59	#7
KiloAlpha Senior - BHPian Join Date: Mar 2010 Location: Cubicle Posts: 1,605 Thanked: 3,002 Times	Is this 30% reduction going to be inflation adjusted? Or will it be that we can buy a Corolla in 2013 for 30% less than what it costs today, in absolute terms?
	() Thanks

19th June 2010, 10:51	#8
CARDEEP Senior - BHPian Join Date: Jan 2010 Location: NCR Posts: 3,248 Thanked: 2,522 Times	If this means getting more local parts (rather than imported ones), more manufacturing in India & enhancing the production capacity in India, it is good in the long run. Else, I predict, it may be good for the company, but, not for the consumers, as the reduced costs will increase the demand for a "Toyota", without any tangible in crease in supply of cars. I believe that they would like to maintain top quality, especially after the US fiasco (which has led to downfall of Toyota's image in US ~ world's biggest car market). Only this way they can remain on their track to become/remain the biggest car maker on planet. In any case, in future I expect there would be cheaper Hondas, & lesser units of Suzuki. Hyundais, Fords, etc. P.S. - I could not open the ET link, I haven't read the article. My apologies in advance if my views are similar to those on ET, or if I have missed out something.
	() Thanks

19th June 2010, 12:25	#9
deep_bang BHPian Join Date: Mar 2007 Location: Bangalore / Boise Posts: 888 Thanked: 1,272 Times	Cars in US cost a lot less than in India. I wonder why is that. Further I wonder if thats what Toyota is trying to fix, and hence reduce the price by 30%.
	() Thanks

19th June 2010, 13:14	#11
da_lowrider BHPian Join Date: May 2007 Location: Mumbai / Gold Coast Posts: 247 Thanked: 238 Times	I believe that it will be inflation adjusted, and the benchmark here is Hyundai's prices - which incidentally happen to be 30% lower- hence that statement should read - on par with Hyundai's pricing, if car prices go up globally so will Toyota's, but by 2013 I guess a corolla and an elantra will be priced on par.
	() Thanks

19th June 2010, 13:57	#13
narchennai BHPian Join Date: Sep 2009 Location: Chennai Posts: 129 Thanked: 40 Times	30% reduction is possible by localisation and value engineering methods, but to maintain the same product quality that is offered now, must be difficult.
	() Thanks

19th June 2010, 14:05	#14
1100D Senior - BHPian Join Date: Jun 2006 Location: Calcutta Posts: 4,390 Thanked: 4,096 Times View My Garage	Doing the math for the price reduction in the Fortuner. However, before we get all excited, this will in effect be applicable to cars/platforms launched beyond 2013.
	() Thanks

19th June 2010, 16:01	#15
ajman28 BHPian Join Date: May 2010 Location: Chennai Posts: 281 Thanked: 24 Times	This is good news. The only point here is that the other manufacturers too are on a similar route. I remember Maruti had come up with a plan of reducing just Rs.1 from every component. A small sum as this too achieved great results in the end product pricing. Toyota too must have started similar projects. Anyway the article says 30% reduction by 2013, so let's hope we see some reduction within this year itself.
	() Thanks