It’s a week of big launches from Toyota and Honda

This is an unusual week for India’s car arena with a distinct Japanese flavour. Wednesday saw Honda Cars launch its all-new Amaze while Friday will see Toyota follow suit with its Yaris.

It will be interesting to find out when these two car-makers last had product launches within 48 hours of each other. Both offerings are sedans, though at different price points. While the Amaze will compete with the likes of the Suzuki Dzire, Hyundai Xcent and Volkswagen Ameo, the Yaris will be up against the Honda City and Hyundai Verna at the premium end.

Important for success

Both cars are critical to their manufacturers’ growth strategies for India, a market which is dominated by Maruti with Hyundai as its nearest rival in relative terms. The difference between the two is at least a million units annually, which also puts in perspective how the others are clamouring for a share of the balance.

Both Toyota and Honda have been around in India for a little over two decades but with limited success going by their single digit market shares. Toyota had, prior to this, got into the light commercial vehicle segment with the DCM group in the 1980s. Like other Indo-Japanese joint ventures in the LCV space (the others being Eicher-Mitsubishi, Swaraj Mazda and Allwyn Nissan), this was blown away by the onslaught of the Tata 407.

Toyota learnt its lessons on the imperatives of localisation and competitive costing when it set up shop once again in the newly liberalised India of the 1990s. Its Qualis multi-purpose vehicle was a runaway hit and firmly established the brand.

Honda, likewise, hit the bull’s-eye with its City, which continues to be its flagship brand and is going strong even after 20 years. There are not too many car brands in this part of the world that have had this level of endurance and durability, which clearly puts the City in a unique slot.

Looking to ‘Innova’te

Yet, the company would like to see a similar encore in its other offerings too, which has not been quite the case. This is the same for Toyota, which brought in the Innova to replace Qualis many years ago and, once again, had the market in a tizzy. However, it has not been able to recreate the magic with its other brands, which only drives home the importance of the Yaris.

Toyota attempted to crack the small car space with its Etios Liva and sedan duo but they hardly created any excitement. The Corolla is a global brand that continues to do modest numbers.

As for Honda, it was categorical about its positioning as a premium brand player, which worked like a charm with the City. In the initial years, the Civic and CR-V also caught the eye of the market but volumes were limited. The Brio was perceived as a game changer in the premium hatchback space but, once again, the numbers were elusive while the expensive Jazz fell short of expectations.

Trying to Amaze buyers

The first generation Amaze created a much-needed presence in the entry-level sedan space and did its bit for the Honda brand in India. The same could not be said for the Mobilio and BR-V in terms of volumes even while the more recent WR-V has been a better performer.

It is with this backdrop that the Amaze and Yaris become critical for Honda and Toyota. They have the potential to do big numbers, which will also help satiate capacity at their manufacturers’ plants. The Amaze also has an automatic diesel option while the Yaris has an all-petrol range to offer.

Finally, it is the customer who will have the final say but both Honda and Toyota will have reasons to feel optimistic, especially after their decades of learning in the competitive market.

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