What this all adds up to is a nearly palpable buzz.
Industry analysts peg the overall size of the SUV market at a little over 10,000 units annually, and believe TKM, a joint venture between Japan-based Toyota Motor Corp and Indias Kirloskar group, will likely rev up demand for a market hit hard by the general market slowdown. In the January-July period of the current year, SUV segment sales were down 60% compared to the same period last year.
The introduction of the Fortuner is likely to heat up competition largely in the mid-SUV market, says Abdul Majeed, partner & auto analyst, PricewaterhouseCoopers. While Ford Motor quickly introduced a refurbished Endeavour, Honda and GM seem to be waiting to gauge the response to Toyotas new offering.
Audi, a German company and part of the Volkswagen Group, recently launched its SUV, Q7, at a price starting Rs 53.4 lakh. In that sense it really doesnt compete with the likes of the Fortuner and the Endeavour, but it attests to the potential of the market.
At present, SUVs constitute nearly 2% of the total passenger car market in India. TKL is aiming at a 50% share of that market by the end of the year.
Its share in the overall passenger vehicle market, is about 3%. Our strength lies in the dealer network and customer confidence in the Toyota brand name that will help us lead the segment eventually, says Sandeep Singh, TKM deputy MD (marketing).
The Fortuner will be assembled from completely-knocked-down or CKD kits at TKLs plant at Bidadi, Karnataka, where the Innova and the Corolla are manufactured. Currently, it has the capacity to produce 550 units of the Fortuner per month. The company is trying to ramp up monthly production figures to 600 units to meet high customer demand. If successful, TKM is likely to sell nearly 2,500-3,000 units of the model by December 2009.
In India, the premium SUV market is dominated by two playersHonda CR-V (Rs 22-25 lakh) and Chevrolet Captiva (Rs 21-24 lakh). By aggressively pricing its Fortuner, TKL is hoping to wean away a chunk of this market, says Majeed.
On its part, Honda Siel Cars India feels a comparison with other SUVs is a tad unfair because the company has moved to the order-based system since April this year and also because the CR-V is sold as a CBU (completely built unit) import from Japan.
This means that the company would import readymade units from Japan only after an order has been placed.
A Honda CR-V customer has to wait three months to drive the car home, a reason why its sales have slipped in recent months.
The Fortuner is in a different segment altogether, explains Anita Sharma, general manager, marketing communication, Honda Siel Cars India. We are operating in the petrol segment and the others in the diesel segment. On an average, we sell about 60 to 70 cars per month. Before we went on to the order-based system, we were selling about 250 to 300 units per month. Being a fully imported car it is expensiveso we deliberately changed our strategy. In comparison, the Fortuner is a diesel car and is assembled in India.
On an average day 30-35 people walk in to check out the Fortuner only, says AK Singh, vice-president, operations, Galaxy Toyota, a Delhi-based Toyota dealer. The conversion rate is about 50%. These people have already decided to buy the car and come here to just have a look at it with family and friends before booking. They are the serious customers and are enthusiastic. As of now, TKM dealers have been advised to take customer orders without advance payments, while committing to a tentative date of delivery.
Certainly, the Fortuner has filled a huge gap in the market. The statistics in other markets where it sells speaks for its potential. According to the company, the Fortuner has already sold over 2.5 lakh units in more than 60 countries since its launch in 2005.