Toy­ota adds Etios Com­pact to bat­tle Gen­eral Mo­tors, Hyundai

The Pak Banker - - Company& -

TOKYO: Toy­ota Mo­tor Corp. placed such im­por­tance on the In­dian-built Etios com­pact that it was the only new car the com­pany didn't de­lay amid the global fi­nan­cial cri­sis. Pres­i­dent Akio Toy­oda needs it to es­cape a sales rank­ing of sev­enth in Asia's sec­ond-fastest grow­ing ma­jor econ­omy.

Toy­oda, 54, in­tro­duced the car to­day in Ban­ga­lore, the first time he's at­tended an over­seas car pre­sen­ta­tion as chief ex­ec­u­tive. Toy­ota, with mar­ket share of 2.8 per­cent in In­dia dur­ing the first 10 months of 2010, needs to win cus­tomers from mar­ket leader Maruti Suzuki In­dia Ltd., Hyundai Mo­tor Co. and Gen­eral Mo­tors Co. as it seeks 10 per­cent of the mar­ket in five to seven years.

"Toy­ota has been very slow in get­ting its act to­gether in In­dia," said Dar­ius Lam, a Bangkok-based an­a­lyst at re­searcher J.D. Power & As­so­ci­ates. "It's hard to over­state the im­por­tance of Etios to Toy­ota's fu­ture suc­cess in In­dia."

The model, which com­petes with Maruti's Swift and Hyundai's i20 mod­els, goes on sale to­day in the world's sec­ond-most pop­u­lous nation. Priced from 496,000 ru­pees ($10,900), it is Toy­ota's cheap­est of­fer­ing in In­dia, the com­pany has said.

"We are aim­ing for a fullscale pres­ence in In­dia," Toy­oda told re­porters to­day. "With the Etios, we are able to serve an even broader range of cus­tomers."

Sold as a small sedan, with a hatch­back to fol­low in April, and built at a plant in Bi­dadi, near Ban­ga­lore, vari­a­tions on the Etios will later be added in China, Brazil and Thai­land.

"This is a good mile­stone for Toy­ota in In­dia," said Ashvin Cho­tai, London-based man­ag­ing di­rec­tor of In­tel­li­gence Au­to­mo­tive Asia, an in­dus­try con­sul­tant. "The seg­ment that the Etios hatch is be­ing tar­geted at is see­ing a lot of com­pe­ti­tion from all for­eign play­ers."

Toy­ota aims to sell 70,000 units of the Etios in the first year, the com­pany said to­day. It sold 62,000 ve­hi­cles in In­dia this year through Oc­to­ber, com­pared with Maruti Suzuki's 874,000 de­liv­er­ies and Hyundai's 299,000 ve­hi­cles. Maruti Suzuki con­trols 39 per­cent of In­dia's lightve­hi­cle mar­ket, while Hyundai ranks third with 13 per­cent, ac­cord­ing to J.D. Power.

Shares in Toy­ota rose 2.8 per­cent to 3,310 yen as of the 3p.m. close in Tokyo to­day. The stock has fallen 15 per­cent in 2010.

The Etios may also help the au­tomaker, based in Toy­ota City, Ja­pan, nar­row a sales gap with GM and Ger­many's Volk­swa­gen AG in China, the world's biggest auto mar­ket.

Sales of the Toy­ota brand in China grew 17 per­cent to 644,000 this year through Oc­to­ber, com­pared with a 36 per­cent gain to 1.98 mil­lion units for mar­ket leader Gen­eral Mo­tors Co. Volk­swa­gen AG de­liv­ered 1.65 mil­lion ve­hi­cles in the pe­riod. The Ja­panese com­pany hasn't yet an­nounced a date for the Etios in­tro­duc­tion in China.

Toy­ota's cheap­est model in China is cur­rently the Vios, which is 23 per­cent more ex­pen­sive than BYD Co.'s F3 com­pact. The F3 is the coun­try's most pop­u­lar car, priced at 70,800 yuan ($10,620).

Toy­ota de­signed the Etios specif­i­cally for emerg­ing-mar­ket cus­tomers, bet­ting the les­s­ex­pen­sive model can win new buy­ers with­out tar­nish­ing its rep­u­ta­tion for re­li­able cars. Un­til now, the In­nova mini­van was Toy­ota's cheap­est ve­hi­cle in In­dia, start­ing at 826,433 ru­pees in Mum­bai. Nei­ther model comes with airbags as stan­dard. The au­tomaker is low­er­ing costs for its new model by in­creas­ing the amount of parts pur­chased in In­dia, with lo­cal­iza­tion reach­ing 90 per­cent as en­gine and trans­mis­sion pro­duc­tion start in nation in 2012. -Bloomberg

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