The Indian subsidiary of the world?s largest carmaker, Toyota Motor, has driven into the small car space with the launch of the Liva on Monday.
The car is expected to increase competition in the crowded hatchback segment that accounts for close to 70% of the overall sales. Initially, the Liva would be offered only in the petrol version with a starting price of R3.99 lakh. The car has been developed on Toyota?s sedan platform Etios.
The Liva is one of the most competitively-priced car in the premium A2 segment. Other cars in this space include Maruti Suzuki?s A Star and Estilo, Nissan?s Micra, General Motors? Beat, Ford?s Figo and Tata Motors? Indica.
According to analysts, with a slew of small cars to hit the Indian roads in the next one year, it could lift the negative sentiments in the market which is currently plaugued by rising fuel costs and soaring interest rates.
For instance, Honda would launch its much-awaited small car Brio later this year. Renault is working on a hatchback that would be introduced in 2012, Hyundai is slated to launch a car to take on the Alto and Skoda has also started work on introducing a hatchback.
?The only way to increase sales (in a market like this) is by introducing new models. For any original equipment manufacturer (OEM) to have meaningful volumes in the Indian passenger car market, it has to have exciting products in the hatchback segment,? auto analyst with Ernst & Young Kapil Arora said. He said that despite the overall negative macro economic indicators, the Indian car market is slated to double in the next four years to 5 million units from 2.5 million units at present.
Arora added, ?Companies are adopting different strategies to succeed in the marketplace. While existing players are looking to retain market share through exchange scheme and loyalty programmes, other OEMs are looking to introduce aggressively priced models.?
Sandeep Singh, deputy managing director (marketing) of Toyota Kirloskar Motor, which is a joint venture company between Toyota and Bangalore-based Kirloskar Group, said dipping sales did not hinder the company?s plans from introducing the small car.
?There is always a good time for the launch of a small car. The growth currently may not be very high but it would still be quite good. The launch would be exciting for the Indian market,? Singh said.
According to Singh, the company has invested R3,200 crore for developing its second facility at Bangalore by adding a capacity of 70,000 units. The expansion would take the overall capacity of the plant to 1.2 lakh units per annum. Singh later told FE that Toyota had identified the Indian market as a key growth generator for the years ahead. At present, India?s sales contribute less than 1% to Toyota?s overall global sales.
Toyota Motor’s Indian unit expects to sell more than one lakh Etios sedans and hatchbacks in 2012, Singh said.
Toyota Kirloskar is a joint venture between the Japanese car maker and the Indian Kirloskar group. The company has a production capacity of about 1.5 lakh units per annum and makes brands such as the Corolla Altis, Innova and Fortuner in India.