The Hindu Business Line : Corolla races ahead, but competition hots up

THE battle for the leadership position in the executive segment for cars is turning out to be fierce with Toyota Corolla edging out its competitors during 2003.

In January 2004, Corolla reached a milestone for itself when its sales crossed the 1,000-mark. The other two main competitors in the segment, Chevrolet Optra sold 700 cars during January, while Skoda Octavia sold around 600 in the same month.

But 2004 could see competition turning out to be tougher for car manufacturers as more variants and newer cars with far better fuel efficiency and aggressive pricing will hit the roads.

For Toyota, Corolla's performance is a repeat of the response it received when Qualis was launched. It now plans to sell 12,000 units of Corolla this year, which is nearly 33 per cent more than last year.

With production constraints easing up a bit, General Motors too has increased the target to around 12,000 units for 2004. Since August, 2003, when Optra was launched, it has sold around 5,000 cars.

Octavia, which was also bogged down by production constraints and later by migration to CKD from SKD in its factory, notched up sales of around 4,800 cars.

The company lost nearly five months during 2003 because of the switchover. The company expects to sell around 7,900 units of Octavia during the year.

Quoting the results of a study, Toyota Kirloskar's deputy Managing Director, Mr K.K. Swamy, told Business Line that the cost of ownership of a Corolla is far lesser when compared with its competitors.

"We enjoy the least parts to car price percentage. The study showed that a Corolla owner spends less on his vehicle than others," Mr Swamy said. Corolla has, so far, sold around 3-crore units worldwide.

The General Motors' Vice-President for corporate affairs, Mr P. Balendran, said production constraints bogged down its sales last year. "This year will see Optra performing extremely well because we have sorted out most of the production problems," he said. General Motors has a 24 per cent market share in the segment which is expected to grow to around 34 per cent during the year, he said.

The executive segment saw an unprecedented boom during 2003 recording a 350 per cent growth over 2002. During 2004, though the growth is expected to be smaller, of about 20 per cent, the base is much larger. In 2003, the size of the executive segment was around 20,000 units.

Skoda Auto's General Manager for sales and marketing, Mr Bipin Datar, said with more variants and launch of two more new cars this year, Skoda should start performing extremely well. "Our new models will show that our technology is far superior than our competitors with better emission standards and far better mileage," Mr Datar said. He said Toyota has a far wider network of dealers, which Skoda hopes to match during the year.