Toyota so far has offered well built and luxurious cars with an average price tag of as much as three times that of Maruti Suzuki’s small cars. Maruti holds more than a quarter share of the Indian small car sector and is working to achieve even a greater share.
Maruti is the market leader and sells cars like hotcakes which no other brand has matched upto till date but Toyota is one brand which has plans in its mind of giving the former some competition.
Hiroshi Nakagawa, managing director of Toyota’s India unit, said ,”The new car, also to be sold in China and Brazil, will be priced in the range of market leader Maruti’s Swift compact (Rs 405,300)”
He further added “It has been a challenge to build quality at a lower price. The Indian car market is one of the toughest markets in the world. Customers and car owners are very cost-conscious”
Earlier in an interview on 4th October Executive Vice President Yukitoshi Funo said “Bringing procurement cost to a very competitive level is a do or die challenge for our procurement and production teams,”
Now that even Toyota has realized the importance of low cost cars, it will have to strike the balance between sales in low-cost car segments in emerging markets and its reputation for quality. The company will reduce the cost of its new car by purchasing most of the parts from local vendors.
Almost 70 percent of the parts will be locally sourced including local manufacturing of engine and transmission from 2012 and all these steps will help the brand drastically cut the cost of its new model.