Toyota takes safety route to grow in India

Toyota Kirloskar Motor (TKM) will soon have its one millionth customer in India. That is cause for celebration. TKM is also happy about leading in the segments it operates in the price category of over Rs 10 lakh. But there’s also a concern. The company is unlikely to have a launch of any all-new model for a year or so at least. This has made it to implement new strategies for growth in the high-volume segment.

“The Innova is the market leader in its category with about 33 percent share. The Corolla commands about 50 percent market share in its class. In the Camry segment, we are close to 50 percent with the hybrid doing very well. In the last four months, we have been retailing about 100 cars a month. And the Fortuner SUV has a share of 75 percent in its category,” said N Raja, senior vice-president and director, TKM.  However, the challenge for TKM is in the segments below Rs 10 lakh.

The company’s presence in the sub-Rs 10 lakh category is marked by the Etios and the Etios Liva models but there is no sign of market leadership in the respective passenger car categories. TKM, therefore, has a clear plan – to focus on consolidating its bond with its customers (dealers and end customers) and proving the worth of its cars. “We want them all (existing customers) to be with us when new products come, even though it is going to happen a little late. We have been working on providing the best experience to our customers,” said Raja.

Numbers for the overall PV (passenger vehicle) segment shows it grew by 3.90 percent YoY in FY2014-15. “That is largely because of new products. But, during the January-September 2015 period, we have grown 13.89 percent (without launching any new model in the high-volume category), which is an achievement because we went for a close interaction with our customers, trying to leverage on our strengths of QDR (quality, durability, reliability). This has helped us,” observed Raja.

Not many may have noticed but TKM, during September-October 2014, began providing airbags as a standard feature across all of its models including the Etios and Liva cars. Raja revealed that TKM completed covering all models from its India portfolio under its new safety-driven initiative by January 2015. “So now we are the only manufacturer which provides dual airbags as standard on all models,” he commented.

But what results did that fetch TKM? The company has sold close to 40,000 units of its Etios and Liva models put together between January-September, which, according to Raja, is a 14 percent YoY growth.

“I can attribute this to the efforts that we undertook,” he said. “In the small car category, if I give the buyers a choice between airbags and a stereo, almost 99 percent of them will opt for the stereo system. This was the starting point for us,” added Raja. He believes that of late safety awareness among buyers in India has increased a lot, all thanks to the latest reports on international crash tests carried out on a few Indian cars. It can be recalled that Euro NCAP (European New Car Assessment Programme) had crash-tested a set of compact cars from India which failed the crash test. That, along with the government’s focus on enhancing safety standards, has increased consumers’ awareness level about automotive safety.

“Today, even in Tier 2 towns, buyers are asking for airbags. One customer actually walked into our showroom in one such town and asked: ‘Gubbarawala gaadi dena! (Give a car with balloon).’ That’s exactly what he said and this means that the awareness for safety has gone up,” quipped Raja.

The salesmen at TKM dealerships are trained to educate customers about the value of buying a car with safety features. They convince buyers with logic such as higher resale value for cars with safety features, especially after 2017, when the new Motor Vehicle Act is expected to come into force.