Toyota Set to Trigger Price War With Liva

Cheapest hatchback in India to take on Swift, Polo, Micra, Fabia & Punto

CHANCHAL PAL CHAUHAN NEW DELHI

Toyota may trigger a price war in the hatchback segment when it launches its first small car in India on June 27. The allnew Toyota Liva is expected to start at just over . 4 lakh and the top-end version, complete with multiple airbags and anti-lock braking system, will be priced around . 5.5-6 lakh, said a company executive.
This will make the 1.2-litre car from the world’s top carmaker cheaper than most hatchbacks, the fastest-growing segment in the 2.5-million Indian passenger car market, and force rivals to consider price cuts.
The prices of hatchbacks such as market leader Maruti Swift, Hyundai i20, Volkswagen Polo, Nissan Micra, Skoda Fabia and Fiat Punto start from . 4.3 lakh and go over . 8 lakh for different variants.
“Prices are the first phase of the competition,” says PricewaterhouseCoopers Auto Practice Leader Abdul Majeed. He says price reductions will happen as the Indian market gets crowded. “These Price wars would excite the customers and potentially help many to upgrade to bigger cars.”
Honda Siel Cars on Monday signaled a price war in the sedan segment by cutting the prices of its flagship City by up to . 66,000 to take on the challenge from recently launched Hyundai Verna and new segment leader Volkswagen Vento. Honda’s City lost its leadership in the mid-size cars segment to Vento.
Honda too plans to launch its small car, Honda Brio, this year and the company will be under pressure to price it competitively vis-à-vis Toyota Etios Liva. Honda is also expected to cut the prices of its Jazz hatchback, which is priced much higher than competing models, to make it more attractive for Indian customers.
Other companies may follow a similar route.
Without confirming the Liva prices, Toyota Kirloskar Motor Deputy MD (Marketing) Sandeep Singh told ET, “We will launch the car at the most competitive price and like its sedan sibling Etios. It’s an all-new car, offering huge value for money to Indian customers.”
Keeping in view the higher demand for smaller car Toyota would double production to 1.2 lakh cars for the Etios and the Liva at its second plant in Bangalore by September this year. “Our total capacity will go to 2.10 lakh cars by early 2012 that will enable us to cater to the fast growing Indian market,” Singh said.
Toyota Etios, starting at . 4.96 lakh, has got a big response and the company has already delivered over 20,000 Etios to customers with around 10,000 units more on booking list.The company expects Liva to get an even better response.
Toyota has followed a topdown approach in India after launching its bigger vehicles like Camry sedan and expensive
SUVs like Prado and Land Cruiser before rolling out Etios and now Liva.
It has enjoyed fair success so far with major models like Innova and Fortuner being segment leader netting over 50% market share in the segments. The expansion in portfolio and overall sales will help Toyota expand its used car business. Maruti sells 20-22% of its new cars from its used car business True Value and Toyota plans to reach the same level by 2013 from its U-Trust business.
The company will launch used car business in 15 outlets by the end of this year and expand its sales network to over 150 dealerships.
Toyota launched a new variant of its premium sedan Corolla Altis in both petrol and diesel options priced at . 10.53 lakh and . 14.77 lakh (ex showroom Delhi) on Thursday. It has sold more than 70,000 Corolla’s so far since the world’s best-selling car was launch in India in 2003.