Why Toyota India rebadging every Maruti car? - eNidhi India Travel Blog

Why Toyota India rebadging every Maruti car?

Toyota is a global automobile giant with HQ in Japan. Toyota is not short of ideas, models or options to roll out in the markets it is operating. But in India Toyota seems reluctant to launch any new models since past few years. Toyota Bharath (Toyota India) is instead busy rebadging every Maruti Suzuki car and launching them under Toyota branding.

It started with Baleno being rebaded as Glanza. Then Brezza became Urban cruiser. Initially I thought this approach by Toyota Management seemed sensible due to following advantages

1. Indian Govt's ever changing policies: Govt kept changing rules and regulations frequently, making fresh investment risky. BS4, then BS6, sub 4 meter tax exemption, petrol-diesel price difference vanishing, safety guidelines and such frequently changing rules probably forced Toyota to wait and watch. A rebadged car would keep the sales team busy, showrooms occupied and some cash flow coming in, while management figures out what to do next.

2. Sluggish automotive sales: India's Auto Industry suffered massive drop in sales in 2018-2019 due to job losses, demonetization and other reasons. Because of this probably Toyota hesitated to make fresh investments

3. Brands leaving India: GM left India, Ford was talking about handing over the controls to Mahindra and quit India. May be Toyota was not very optimistic, though their Innova and Fortuner were doing very well.

But even after 2021, Toyota hasn't made up its mind. It is not that Toyota doesn't have models to launch in India. Toyota did some mistakes in India

  • Yaris was a budget car abroad which they launched as luxury car in India and it didn't click. 
  • Etios and Liva did well for a while but were never given due upgrades over time so they don't exist now.
  • Innova when launched was 10 lakhs, now costs 25-30 lakhs. No budget MPVs were launched.
  • Compact SUV is a craze in India right now- Nexon, Venue etc ruling the category. Toyota has nothing in this segment.
  • Toyota didn't try compact sedan as well (Etios was slightly longer than 4 meters and didn't qualify for tax sops dzire was eligible)

Renault and Nissan have done fair bit of rebadging and succeeded. But Maruti-Toyota partnership has some fundamental flaws. Now there are talks of rebadging Ciaz and Belta and even WagonR is up for rebadging, which looks like a bad move for many people, because Toyota badge was meant for reliability, safety while Maruti was focused on cost cutting & fuel economy. Though Maruti is #1 in terms of volume many Indians avoid Maruti due to poor safety ratings. Most of Maruti's volume consists of low value cars. Hyundai makes more profit from 1 Creta than what Maruti makes from 5-6 Altos. Toyota abandoning its own models and simply rebadging every Maruti car isn't going well with people who used to trust Toyota.

Toyota has various models in global market which they would have launched in India

1. Avanza: Avanza is an MPV, could have been positioned below Innova. Innova now costs 22-25 lakhs, so beyond many people's affordability. Avanza if positioned in 10-14 lakh price range it could have given good competition to Ertiga and Marazzo. But instead of bringing Avanza to India, Toyota is simply rebadging Ertiga.

2. Aygo: Aygo is a cute small car. Very popular in Europe where tax is high and roads are narrow. Aygo could have given good business to Toyota taking away market share from Swift, Tiago, Alto. Indians like or rather can afford small cars more, so Aygo could have been a perfect choice for India, along with or instead of Liva.

3. RAV4: RAV4 is an SUV which could have competed with Creta and Harrier. Toyota own Harrier brand name abroad but they didn't register it in India, so Tata got it. (Below is a Toyota Harrier I clicked in Brunei.

4. Raize: Raize is a compact SUV which could have been pitched against Venue, Brezza and Nexon.

5. Hilux: Hilux is a pickup version of Fortuner. May not sell a lot in India at 30-40 lakhs as there are not too many super rich farmers or traders who would spend so much (it is cheaper to buy a proper 407 mini truck). But Hilux will give competition to Isuzu.

6. FJ Cruiser: FJ Cruiser is a lifestyle vehicle with 4x4 capabilities- it could have given touch competition to Mahindra Thar

7. Electric cars: Indians are opening up to electric cars. Toyota should start with a few models in this department. Toyota had launched Prius in India as CBU so it didn't find much takers. Given success of Nexon EV and other EVs, Toyota can give a try with few electric vehicles. But may be they want to try with WagonR rebadged EV.. Let us see.

Why Toyota Bharath is hesitant?

Carmakers need some sense of expected sales volume before they can launch a car in India. In countries like Srilanka they can simply import and sell but here in India, heavy tax on CBU makes it unviable. So having to plan entire assembly lineup and investments involve some risk taking. But with well established dealership network, brand identity and customer base, Toyota could have tried launching at least one new model every year, instead of piggy backing on Maruti.

Let us see how long it goes. What are your thoughts? Would you buy a Maruti mode just because it has Toyota branding?

4 comments:

Appreciate your efforts and interests to comment. Comments may be moderated due to increased spam. Will ideally respond to comments within few days.Use Anonymous option if you don't wish to leave your name/ID behind- Shrinidhi

Powered by Blogger.