Key to Toyota’s growth in the Indian market is its upcoming EFC (Economical Family Car) platform which will spawn hatchback and saloon body styles. While the EFC will form the bulk of Toyota’s volumes in India, the company is also looking at other segments to enhance its portfolio in India.
Under consideration is the Avanza MPV, which sits a segment below the popular Innova. In India, the compact MPV category in India is virtually non-existent and is served only by the six-seater Versa van which barely sells. So can Toyota convince customers to buy this new class of vehicle? The company believes it can and is banking on the popularity of the Innova to draw people to what is essentially a scaled-down and cheaper version of the hot-selling Innova MPV.
The Avanza is also a seven-seater on a rear-wheel-drive platform but unlike the Innova, which is built on a body-on-frame or ladder chassis, the Avanza has a monocoque construction. This would give the Avanza more ‘car-like’ dynamics but Toyota is concerned whether customers would perceive the absence of a ladder chassis as a compromise in durability. However, a bigger concern is the lack of a diesel engine. The present Avanza is only available with 1.3 and 1.5-litre petrol engines which just wouldn’t fly in India.
In fact, the lack of a diesel is one of the main reasons why the Versa flopped.
Toyota is considering the 1.4 turbo-diesel for the Avanza, the same motor which will power the EFC and Corolla diesel. However, retro-engineering a new motor into the present Avanza is difficult and costly. Toyota might just wait for the next-generation Avanza which is being developed with a diesel engine option but that is still some years away.
The Avanza’s pleasing styling, compact dimensions (it is only 4.1 metres long) and impressive space efficiency could make it a smart alternative to a saloon car for those who need to regularly transport more than five people. The last row is typically cramped but it’s good enough for kids and the occasional adult for short city hops. The Avanza will appeal to those who find the Innova’s ship-like dimensions too much of a handful and prefer something that’s not more difficult to drive than a hatchback.
To meet a target price of Rs 6-7 lakh, Toyota is considering heavy localisation to bring costs down. Strategically, Toyota sees the Avanza as the right vehicle to plug the huge gap that will exist between its small car line-up and the big Innova.
For the moment, Toyota’s focus in India is on the EFC. The small car project is gathering momentum and Toyota plans to unveil the concept at the Auto Expo in January 2010. The world debut of the EFC in India is significant and underscores the importance of India, which is the lead manufacturing base for this platform, followed by Brazil. The EFC is the cheapest car in Toyota’s portfolio and is positioned in a segment of the market the Japanese giant has never competed in before. It is for this reason that Toyota is taking extraordinary pains to find out exactly what customers for this class of car exactly want. Kazuo Okamoto, vice-chairman of Toyota Motor Corporation, says: “The strategy for the Indian market is to get the product right and we are devoting ourselves to preparing the right product for the Indian market. Only then can we be successful.”
Though the development of the EFC was done completely in Japan, Toyota has designed this platform around strict cost targets which it has managed to achieve thanks to high localisation and use of the homegrown supply base in India. For the first time, Toyota has not automatically chosen its traditional suppliers as they have not met the cost targets Toyota has set for the EFC’s components. Pricing will be the biggest challenge and though Toyota has announced it will not get into a price war with its rivals, the specs will be tweaked to ensure that costs don’t go out of hand. “Cost reduction will come with lower specifications but not by compromising on quality,” emphasises Okamoto. Toyota is also banking on its robust and quality dealer network to offer a trouble-free ownership experience, as a key differentiator.
Source: Autocar India