1. From Qualis to Innova, Crysta to Touring Sport, how Toyota reshaped the MPV segment

From Qualis to Innova, Crysta to Touring Sport, how Toyota reshaped the MPV segment

From Qualis to Innova and Crysta to Touring Sport, how Toyota reshaped the MPV segment.

By: | Published: May 19, 2017 4:15 AM
It’s not an easy decision to take off your best-selling product from the market and replace it with the one that has no parallel.

It’s not an easy decision to take off your best-selling product from the market and replace it with the one that has no parallel. That’s exactly what Toyota did in February 2005 by discontinuing the Qualis multi-purpose vehicle (MPV) and launching a bigger, more luxurious MPV, the Innova.

From Qualis to Innova

The Qualis was introduced in January 2000, and by the time the company discontinued this rather ordinary-looking MPV in December 2004, a cumulative 1,42,500 units were sold. According to data from the Society of Indian Automobile Manufacturers, the Qualis—which competed with Tata Sumo and Mahindra Bolero, among others—was instrumental in increasing the market share of the MPV segment in the industry from less than 9% to over 11%.

Sales averaged over 2,000 units per month and, contrary to popular perception, only 30% sales went to the taxicab segment. The decision to launch the Innova—MPVs were all about ‘value’, the Innova introduced ‘luxury’ in the segment—was part of an international project to develop a single platform on which new models will be built.

From 2005 to 2016

Launched in February 2005, the Innova was a runaway success, even at then what was a hefty price tag for an MPV—from Rs 6.75 lakh to Rs 10 lakh. Toyota sold 5,78,014 units in 11 years—averaging over 4,000 units every month. What competitors didn’t quite understand was how could a brand maintain its appeal for over a decade without the manufacturer making too many changes to it. A few improvements Toyota introduced were the addition of an intercooler (2009), a minor facelift (2011), and a second minor facelift (2014).

Harish Bijoor, brand expert & founder, Harish Bijoor Consults, says that the strong brand value of the Innova is courtesy its Indianness. “In many ways, the Innova is a ‘made for India’ car. It’s big, rugged and spacious. It’s a ‘two plus two plus two car’, as I would call it,” he says, adding that it was finally a replacement for the long-dying Ambassador. “It took on the legacy of the Ambassador. The bureaucracy adopted it just as much as the fleet owners embraced it.”

It did face competition—Mahindra Xylo, Chevrolet Tavera, Nissan Evalia, Renault Lodgy—but none could challenge its dominance. With the Ertiga, Maruti Suzuki managed to outsell the Innova every once in a while, but then the Ertiga was a cheaper, entry-level MPV. Again, contrary to popular perception, the Innova was primarily sold in the personal segment (70%), not commercial—which has higher ‘visibility’, thus the perception.

The Delhi diesel ban

In December 2015, the Supreme Court, in a move to clean up the city’s filthy air, imposed a ban on registration of diesel vehicles of engine capacity 2000cc and above in Delhi NCR, until March 31, 2016. As much as 8% of Innova sales, or 700 units per month, evaporated—it had a 2494cc diesel engine. N Raja, director & senior vice-president, Sales & Marketing, Toyota Kirloskar Motor, says that the company supported local dealers by taking back the inventory and providing salaries to the affected sales staff.

From Innova to Crysta

In May 2016, the company drove in the Innova Crysta, this time with two diesel engine options—the 2393cc with manual transmission and 2755cc with automatic. Price increase was to the tune of a considerable Rs 2.5 lakh to Rs 4 lakh and the Delhi diesel ban continued, yet sales shot up. By the time the company launched a petrol version—2694cc—in August, the Innova Crysta already had sold over 24,000 units and had a pending order of 9,000 units. A new sales trend ensued—from the earlier 70% sales that went into the personal segment, it increased to over 95%. Another trend was that 50% of Innova Crysta sales were those of automatic transmission, reflecting the changing customer preference.

Reasons behind success

Raja says it has a low cost of ownership, its engine life is the best in the segment, and resale value is high. “A three-year-old Innova, for example, doesn’t lose more than 30% of its original price when you retail it in the second-hand market.”

Agrees Hormazd Sorabjee, the editor of Autocar India magazine. “In the MPV segment, success is more due to practical considerations than emotional ones. The Innova has an unbeatable reputation for reliability, quality and a strong resale value—the most important criteria for MPV buyers. It also has a 5-lakh-strong customer base and many of them are ready to upgrade to the new Innova—this serves as a ready market that no other MPV has.”

From Crysta to Touring Sport

Earlier this month, Toyota launched yet another variant—the Innova Touring Sport from Rs 17.79 lakh to Rs 22.15 lakh. It gets an all-black front grille, smoked chrome headlamps and front bumper spoiler, giving this MPV an SUV-like styling. For the first time, customers have the choice of a sporty avatar.

Hefty pricing hasn’t slowed down sales. In one year, the Innova Crysta has sold 85,475 units (over 7,000 units every month). Bijoor says it’ll keep scripting new success stories, even though the new pricing has pitted it against entry-luxury cars. “Toyota is investing in nudging the brand image higher in the pecking order, and is evolving the brand as India itself climbs up the hierarchy of needs in its choice of cars.”

vikram.chaudhary@expressindia.com

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