Toyota aims to boost sales in India by more than 10 times in a decade to reach a 15% share of one of the world’s fastest growing car markets, the head of its local operations told a news agency.
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“If the market keeps growing at an average pace of 15% annually, you’ll have a 4m-unit market by 2015,” Atsushi Toyoshima, managing director of local unit Toyota Kirloskar Motor, told Reuters. “At that time we’d want to be selling 15%, or 600,000 cars.”
That goal is the most ambitious that Toyota has set to date for India, where it sold 41,000 cars in 2005 for a share of 4%, the news agency noted, adding that top Toyota officials have suggested that even a target of reaching 10% by 2010 may be challenging as competition heats up with more rivals entering the market.
But Toyoshima, who has held his post for three and a half years, expressed confidence in fulfilling that objective provided that Toyota comes through with a plan to develop a small car specifically aimed at emerging markets.
“Not only are we standing by that (10%) target, I think it’s ‘do-able’,” he said in an interview with the news agency at Toyota Kirloskar Motor’s headquarters in the outskirts of Bangalore.
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By GlobalDataReuters said the new small car couldn’t come a moment too soon because Toyota, a winner in virtually every other major region, has lagged in India. It suffered the only sales fall in July as the Corolla sedan – one of the two cars it builds locally – was hit by the launch of Honda’s rival Civic.
Toyota’s line-up of four models in India, which also includes the locally built seven-seater Innova and the imported Camry and Landcruiser Prado SUV, occupy a high-end section of the market, which accounts for only 15% of total car sales.
“We need to capture the remaining 85%, or else our growth will stop. We want to roll out this car as soon as possible,” Toyoshima told the news agency.
For the current business year ending 31 March, 2007, Toyoshima reportedly said he wanted sales at least to top 50,000 units, compared with 47,000 units in its past fiscal year, and that a sales increase of as many as 10,000 units was “probably impossible”.
The smallest car in Toyota’s global product line-up is the Yaris/Vitz subcompact, but a car below that segment is crucial to compete with market leaders Maruti Udyog [Suzuki-designed models] and Hyundai Motor in India, Toyoshima said.
Reuters said Toyota executives in Japan have provided scant details on when or how the company would come up with a car that could be sold for less than $US8,000 in India, citing the difficulty of reducing costs far enough without compromising quality. The Corolla starts at about INR980,000 ($21,150).
Toyoshima reportedly stressed, however, that a small car was becoming increasingly indispensable to overall growth plans at the world’s second-biggest automaker as oil prices hover at record levels and consumers seek more fuel economy in their cars.
“Even in the United States, you’re seeing a shift towards smaller cars,” he told Reuters [the newly-launched Yaris has been a big success there with waiting lists]. “Unless we really tackle the smaller segments in emerging markets, we might one day find ourselves no longer at the top.”
Toyota can now build 60,000 Corollas and Innovas a year at its plant in Bangalore and could stretch that to a maximum 70,000 with added investment in the paint shop. But with 430 acres of land available, the Bangalore site would be ready to house total annual capacity of 600,000 units with a few more factories any time, a separate Toyota official told the news agency.
Toyota undecided on small car for India
