Toyota to double production of Etios

Toyota Kirloskar Motor Pvt. Ltd will almost double production of its newly launched the Etios sedan to prevent prospective buyers from opting for other models as the waiting period now stretches to as much as eight months. The Indian arm of Japan's Toyota Motor Corp. will start a second production shift at its Bidadi plant in Karnataka to meet growing demand, deputy managing director Sandeep Singh said. "There is nothing much that we can do with the kind of demand the Etios has generated. It has taken us by surprise," said Singh. "From April onwards, we will start second shift production at our Bidadi plant." Launched in December last year, the Etios has a waiting period of six-eight months, according to the Bangalore-based firm. With the second shift starting April, the company hopes to reduce this to three-four months.

"Currently we produce at least 2,500 units a month, but the demand is of around 7,000 units. It is quite difficult to bridge that gap in a quick time," said Singh. Production will be raised to 4,500-5,000, he added. The Etios, priced at below '5 lakh in an aggressive bid to enter the mass market, received 3,077 bookings in two days after its launch. The company said it has bookings for about 18,000 Etios cars. The company's second India plant, which is located in Bidadi, and cost '3,200 crore, has an annual capacity of 70,000 vehicles. Production began at Bidadi in December last year. "A long waiting period for the Etios may compel buyers to move to rival brands. It will have to act fast," said Akshay Bhalla, managing director, Protiviti Consulting Pvt. Ltd. The car is pitched against other entry-level sedans such as Maruti Suzuki India Ltd's Dzire and Mahindra and Mahindra Ltd's Logan. "We have our plans in place, which will yield results in the coming years," Singh said, without elaborating. "A lot of the focus will be on localization."


The company looks to increase the proportion of locally made parts in the Etios to more than 90% from 70%. Toyoto has invested '500 crore to set up an engine and transmission plant on the outskirts of Bangalore in a bid to increase local content in its models. The plant will produce 100,000 engines a year from the July-September quarter of 2012 and 240,000 transmissions starting early 2013. The engines will be exclusively for the Etios, but the transmissions may be exported. In the case of the Innova, the multi-purpose vehicle that's the company's largest selling model in India, 65% of the parts are locally made. The Corolla has 50% local content. Toyota aims to sell 140,000 units in the country in 2011, with the Etios accounting for half of this number. According to the Society of Indian Automobile Manufacturers, the company sold 56,670 cars in the April-December period, registering a growth of 27.79% over the same period in 2009.


The market for small cars, which comprise 70% of all cars sold in India, has become increasingly competitive in recent times, with the launch of a range of new models such as the Ford Figo, the Maruti Ritz, the Fiat Grande Punto, the Volkswagen Polo, the Chevrolet Beat and the Nissan Micra. Toyota will launch its first small car in India, the Liva, a hatchback version of the Etios, by the end of April. "It will also have to get its small car right in terms of pricing and positioning. This will help it register a significant growth in market share," said Bhalla of Protiviti Consulting. Toyota is aiming to boost its 3-4% market share in India by entering mass-market segments with cars such as the Liva and the Etios. It currently trails Maruti Suzuki India Ltd, Hyundai Motors India Ltd, Tata Motors Ltd and General Motors India Pvt. Ltd in market share.