Facelift@Toyota
In an interview with Forbes India, Toyota Kirloskar India managing director Hiroshi Nakagawa and deputy managing director-marketing Sandeep Singh talk about the Indian automotive industry and why competition is good
From Toyota, there’s an all new Innova and Fortuner. There are also variants of Etios, Liva, Altis, Prius, Camry and Land Cruiser 200. At the Auto Expo 2012, Toyota has done what most companies do in hard times and also when competitors get better. Make changes in cars already in the market; something more for the customer. Facelifts are a good way to tell the buyer that you care. The game is played on price and features.
So how do you view the automobile market in India right now? There’s quite some talk about speculation that the market is slowing down.
Nakagawa: It seems a little bit [like it is] slowing down. Last year, I think it was at about 3.3 million. In 2010 it was 3 million. Compared to our expectations, the market is a bit below what we had thought. But there is still growth. And one of the good examples is commercial vehicles. That is very much growing and it is a good signal. Every country and every market has the same key performance indicators. Once commercial vehicles grow then there is a fall. I would still say the fundamental is very strong. For us, enquiry level at the dealerships is stable and a very nice figure. The challenge is conversion from enquiry to booking. This is a little bit tough which will take a little more time. But still the customer wants to buy the vehicle.
How do you look at competition which definitely seems to be increasing?
Nakagawa: Talking about competition, there are two kinds of circumstances. Matured market when competition happens, then someone wins and someone loses. It is like a boxing game. But India is another market; India is a growing market. Tough competition happens, but everybody grows because the market grows. But from a customer point of view, it is a variety of choice. He enjoys the competition, not only the price range, but also a variety of products. And as a carmaker we have more fighting spirit. That is how manufacturers create more and more. This competition is in the right direction and then it creates another level of demand. I am very positive on competition. We should fight more.
How has your India strategy panned out so far with the launch of the small car?
Singh: We actually plan much in advance and keep correcting our strategy along the way. It has been working out very well. Last year has been very good for us. Despite the many odds like Tsunami or earthquake, local market dynamics, interest rates going up, gap in price between gasoline and diesel, I think we have done well. We are very happy with that. The other most important thing to do is to make our products more available for customers especially the Innova, Fortuner and Etios. We have already increased our capacity at Plant 1 and Plant 2. So we are on track realistically speaking.
Do you think Toyota will regain its market leadership position in 2012?
Nakagawa: What is the definition of market leadership? Sales volume and production volume are the obvious key performance indicators. But customer satisfaction is the most important thing here. Market leader means Number 1 company in customer satisfaction. On that point of view, I am sure, Toyota is the market leader.
