Over 11 years, the Toyota Innova has established itself as the MPV of choice with a base of 600,000 customers in India. During this period, it has also climbed up the price curve.
13 May 2016 | 4781 Views | By Sumantra B Barooah
The Toyota Innova, first launched in India in 2005, has come a long way. Over the years, it has established itself as the MPV of choice with a base of 600,000 customers. During this period, it has also climbed up the price curve.
It has been a long journey for ...
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The Toyota Innova, first launched in India in 2005, has come a long way. Over the years, it has established itself as the MPV of choice with a base of 600,000 customers. During this period, it has also climbed up the price curve.
It has been a long journey for the model, from less than Rs 7 lakh for the petrol variant and less than Rs 8 lakh for the diesel to a price-tag that now nudges Rs 14 lakh. When compared with the version that the new Innova replaces, the price difference comes to Rs 2.5 lakh at the bottom end and Rs 4.1 lakh at the top end of the variant portfolio. The entry-level price gap may narrow down as Toyota Kirloskar Motor is likely to offer a variant or two at the lower end.
The Innova claims a new market positioning with the premium price, features and interior and exterior styling. But isn't the premium price positioning at risk of losing volumes for the segment leader? Toyota thinks otherwise. "The volumes will not only sustain, but also grow," says Shekar Viswanathan, vice-chairman and whole-time director, Toyota Kirloskar Motor. The introduction of an automatic transmission gives him major confidence, as he feels the Innova can now tap a hitherto untapped market which has good potential for growth. He's right, if the initial response to the new Innova Crysta any indicator. Of the 15,000 bookings the model has received so far, 9,000 are for the automatic transmission variant. But Viswanathan also adds that the percentage of 60 may go up or down after the initial phase of the launch.
He alludes to the example of the demand for the Camry Hybrid to explain why the more expensive automatic transmission, which offers ease of driving especially in heavy traffic conditions, could be a major volume driver. The Camry's hybrid version, which costs around Rs 3 lakh more than the regular version, is currently contributing to 90 percent of the brand's sales volume. "We thought we would have to struggle (to sell the hybrid version)," says Viswanathan. Average monthly sales of the Camry for the past three months stand at 130 units and the company has an order backlog of 200 Camrys.
Toyota's bullishness on the new Innova also stems from the fact that the ‘tiredness’ that was setting in on the 11-year-old brand has been removed with the new styling, premium interiors and features and some engineering inputs. Around 25-30 percent of the Innova's sales are repeat purchases by customers. Given the model's strong brand equity, that may not change much even as it becomes a pricier vehicle. As for the brand's sales, time will tell whether the brand's value proposition has grown stronger for customers to follow in bigger numbers.
With the new positioning, the Innova has also vacated some space in the market. Will another OEM see an opportunity there and make a move? Keep reading this space.
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