Toyota adds Etios Compact to battle General Motors, Hyundai
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