The Urban Cruiser is part of the product sourcing deal Toyota had signed with Suzuki Motor Corporation. This is the second product after the Glanza premium hatchback which is essentially a rebadged Maruti Suzuki Baleno. (Image: Toyota)
The first week of December 2020 will mark the 10th anniversary of Toyota’s first made-for-India product. Launched in December 2010, the Etios sedan was to become one of the largest-selling proucts for the Japanese giant in India.
Aspirations riding on the Etios were such that Toyota targeted to grab 10 percent of the Indian car market by 2015, up from 3 percent back then. The Etios Liva, the sedan’s hatchback version, which was launched in the first half of 2011, was to add incremental volumes. Both were developed on the lines of the hugely popular Maruti Suzuki Swift Dzire and Swift.
Both models were perceived to be the first serious attempt by Toyota to crack the mass market segment, which accounted for more than 85 percent of the Indian car market.
Like Honda, Toyota, too, had established itself as a premium brand in India. The Camry luxury sedan was launched in 2002, Corolla, a premium sedan in 2003, followed by the Fortuner, a premium sport utility vehicle (SUV) in 2009.
The Etios and Liva brought the entry price of a Toyota car to below Rs 10 lakh, a record broken only once earlier by the boxy-looking Qualis, which was priced at Rs 6 lakh and launched in 2000.
Toyota stopped producing the Qualis in 2005 to make way for the Innova, which was launched in the same year.
In April 2018, Toyota introduced the Yaris sedan to take on Honda City, Maruti Suzuki Ciaz and Hyundai Verna, among others. Prior to this launch, its regular models such as the Corolla (Corolla Altis), Innova (Innova Crysta), Camry (Camry Hybrid) and the Fortuner received upgrades.
Following the switchover to Bharat Stage VI emission norms from April 1, 2020, Toyota decided to pull the plug on the Etios, Liva and the Corolla Altis.
Cut to the present
By the first week of next month, Toyota will find itself in the same position as it did a decade ago. Its market share by the end of November is expected to remain around 3-3.5 percent. It was 3.4 percent by the end of October as per data shared by the Society of Indian Automobile Manufacturers (SIAM).
The slight increase in market share was thanks to the deal between Toyota and Suzuki Motor Corporation. As per the arrangement, Suzuki agreed to manufacture and supply the Baleno and Brezza to Toyota, which were rebadged to Glanza and Urban Cruiser, respectively, before they hit showrooms.
As of October, the two models accounted for nearly 50 percent of Toyota’s India sales. The balance is mainly driven by the Innova Crysta.
Innova Crysta, the premium multi-seater contributes 36 percent to Toyota’s sales in India, and accounts for nearly 70 percent of the company’s output from the two plants it runs in Karnataka.
Despite being one of the first multinational auto companies to enter India (1997), Toyota has struggled to get its footing right. In comparison, Kia Motors, which entered India only last year, have grabbed a 6 percent share on the back of just three products.
Why is Toyota sticking around?
“Toyota has its own way of developing and understanding a market, which is often a time-consuming process. The pace at which the Indian car market changed, with consumer preferences changing every four to five years, Toyota did not anticipate it and struggled to cope up. Toyota is taking its cost lessons from Suzuki, a world leader in small car technology, for the time being,” said a Mumbai-based analyst tracking the auto sector.
India intends to move towards electric mobility over the next few decades. This should augur well for the Japanese giant as it has been working in the field of electric and hybrid vehicles for several years.
Through the joining of hands with Suzuki, Toyota wants to roll out an affordable range of electric and hybrid vehicles in India. Though hybrid vehicles (at 28 percent) do not enjoy the same GST as electric vehicles (at 5 percent), a softening of stance by the government is expected.
The Camry Hybrid, for example, is priced at Rs 40 lakh, and the Volvo XC 90 at Rs 1.35 crore, and Lexus NX at Rs 55 lakh.
The company is now seeing a workers’ strike at two plants in Bidadi, Karnataka of Toyota Kirloskar Motor. However, the company says they only play a minimal role in the company’s operations.
Since nearly half of its sales are not even produced in the plants, Toyota has been able to avoid a supply issue of at least two models. The Glanza and the Urban Cruiser are made in Gujarat and Haryana, respectively, by Suzuki and Maruti Suzuki. The Innova Crysta is still manufactured at one of the plants using limited manpower.