By on October 24, 2010

Despite government witch hunts (recently cancelled, supposedly) and subsidized competitors, Toyota is holding its own. Just. But like Toyota said, they’re going on the offensive. They’ve upped the incentives (but are still below industry average) and launching new warranties to confirm their commitment to their products. But they’re also pushing into new markets to offset their reliance on the North American market (and also to make more money). Now one of those markets is India. The formula is very simple there. Cheap, reliable, safe, and cheap. And that’s what Toyota is trying to do. About time. Suzuki is eating everybody’s lunch in India. reports that Toyota has set December this year as the time when Toyota’s Etios will be launched in India. The promos are already making the rounds in India, but December is “bring to market” time.

“It has been a challenge to build quality at a lower price,” said Hiroshi Nakagawa, Toyota India’s Managing Director, “The Indian car market is one of the toughest markets in the world. Customers and car owners are very cost-conscious.” (Did we mention Suzuki?)

In order to keep the price of this vehicle under control (and, therefore, in the price bracket of many Indians) Toyota sourced 70 percent of the car within India. But does local sourcing mean a compromise in quality? Well, according to Executive Vice President Yukitoshi Funo, the mantra is simple: ‘Get quality or die trying’.

“Bringing procurement cost to a very competitive level is s do or die challenge for our procurement and production teams,” Funo said. (Anyone going to make the standard “Seppuku” joke?)

But engineering a car acceptable enough for Indians’ wallets was only half the battle; how do you make a car acceptable for Indians’ tastes? Simple. You get a celebrity spokesperson for your vehicle and Toyota secured a good one. A R Rahman. Don’t know him? Don’t blame you. But to nearly 1.2 billion people, he’s very well known. Time magazine called him the “Mozart of Madras (Chennai)”. Rahman has sold over 100 million records (yes, they still make them in India), he has composed music for many Indian films (and the Indians LOVE their Bollywood films), he won 2 Academy Awards for his work on “Slumdog Millionaire”.

This guy is now the “brand ambassador” for the Toyota Etios reports OneIndia. This is Toyota’s secret weapon in cracking the Indian market. To give some context to this development, imagine that General Motors managed to secure Tom Cruise as its front-man. (Wait, does he sing?) Imagine the marketing capabilities. If I were Maruti Suzuki, Tata and Hyundai, I would be scared. Very scared.

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6 Comments on “Toyota Goes All Out In India...”

  • avatar
    Educator(of teachers)Dan

    Ummmmmm would having Cruise be a PLUS?
    Toyota can likely pull off “low cost quality” in the Indian market cause they likely don’t expect “soft touch” plastics.  Should be interesting to see how this pans out.

  • avatar

    Heh, I can tell you that Toyota Avanza, the low cost model built locally here for the Indonesian market, isn’t exactly full of soft touch plastics or exudes any feeling of “quality”. Not that well engineered either (jumpy throttle, suspensions that successfully combine poor handling and harsh ride, etc.). You do get what you paid for. They have been quite reliable however, and is a huge success. They also command insane resale value here, despite being everywhere. I bet that’s what Toyota is aiming for with this new India car. Different cars for different kind of folks. Notice that European Toyotas are 100% different than U.S. ones?

  • avatar

    I sure wish the US could get a low-cost, high quality vehicle (a wagon or hatch, please).  $14K for a Hyundai or $16K for a Toyota Yaris is not cheap.

  • avatar

    forraymond – we have standards. People expect equipment like central locking, electric windows, power steering, stability control, ABS, more than 50bhp etc etc That is why cars are more expensive. Feel free to move there if you want cheap (which also translates in a lower salary so as a % of salary they are no cheaper than cars here)

  • avatar

    On a recent trip to India I was surprised by the number of Maruti Suzuki Swifts on the roads.  They vastly outnumbered the recently hyped up, ultra cheap Tata Nano.

    • 0 avatar

      In the delay it took from announcement to (limited) launch for the Nano, most of the Indian market has moved ahead aspirationally. The Nano is fine as a city runabout or a second car, but it’s not really highway capable. Also, the higher versions of the Nano hit almost 2 lakh. For that one can get a decent second hand set of wheels which will break into 3 digit speeds, have a useable boot and won’t mark you out as a cheapo.
      [My grandma has an open offer for my bro to get a mid-level Nano. He says he’s rather wait till he finishes his studies, will put in an equal amount and buy a 2nd hand Palio]
      Credit is available, and more and more people are opting for it. The fantastic engines the Swift comes with, Maruti’s service and reliability, and negligible depreciation make the Swift a best seller.

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