Daihatsu, Toyota months away from decision to launch small car for India

Toyota and its subsidiary, the small car maker, Daihatsu are a couple of months away from taking a decision to launch a passenger car for the Indian market.

A Toyota Kirloskar Motors top official confirmed that Toyota and Daihatsu are in serious discussions on launching a small car in certain emerging markets including India. “We are anxious to see India is shortlisted for the launch of the small car project,” N Raja, Toyota Kirloskar’s senior vice president and director of sales & marketing told BusinessLine. He said there will be a lot more clarity on this issue in a couple of months.

In June this year, Daihatsu shareholders gave their nod for full ownership by Toyota. Daihatsu will retain its name and will continue to manufacture cars under its brand name. In countries like Indonesia, however, Daihatsu has made an exception and manufactures and sells its cars under the Toyota brand.

Raja said it remains to be seen the strategy Daihatsu will adopt for the Indian market. “This will be part of a larger strategy and we have to see whether they will use the existing resources or have a separate unit,” he said. Toyota has stayed away from launching a sub-Rs 5 lakh passenger car for the Indian market. Nearly 70 per cent of the Indian market consists of small cars.

Raja also said that the newer versions of Etios sedan and Liva hatchback will be primarily sold to individuals while the taxi and fleet segment will be encouraged to buy the older versions. They will also be given incentives to make it more attractive for them to buy the older versions.

He said the utilisation of the plant for manufacturing both the models was low though the enquiries for the newer versions have doubled to about 1,200.

Since the launch of these two models, Toyota Kirloskar has undertaken at least 11 small and major changes with the previous one being undertaken in 2014 where the airbags and ABS were included as standard equipment in all the models. “We had big challenges after the launch because the customer expectations were much higher,” the marketing director pointed out. The product design of the interiors and the exteriors were largely driven by the team in Toyota’s Bidadi plant with some help from Toyota’s Thailand unit. The entire exercise was carried out on the basis of the feedback from the customers.

In their respective segments, Etios has 7 per cent market share while Liva has 3 per cent. Out of Toyota’s total sales, Liva has a 35 per cent share while Etios has 50 per cent. The Indian arm of Toyota expects to close the year with about 1.4 lakh units, similar to the numbers during the previous year.

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