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Indian customers want more water bottle holders: Toyota
Toyota Kirloskar Motor has left no stone unturned in developing the second generation Innova Crysta with the help of Indian engineers, and the parent company from Japan. Today, Innova is an iconic brand celebrating 11 years of its existence in India. Deccan Herald’sUmesh M Avvannavar sat down with Toyota Kirloskar Motor Director and Senior Vice President (Sales & Marketing) N Raja on the sidelines of the new Innova Crysta product presentation in Goa, recently. Excerpts of the interview:
Please take me through the journey of Toyota Innova in India
Toyota introduced the Innova in 2005, and since then it has been a journey of continued strength one after the other. We did bring in continuous improvements on the product, and the customer acceptance of the product has been great, thanks to the quality of the product and customer experiences.
It has become a cult product from us in India. If you have seen, there have been over 6 lakh Innovas till now, from 2005, and specially what I would like to highlight is, in the initial quality study that JD Power does, from year 1 till today, it has been number 1, with least problems for 1,000 cars, in the MPV segment.
Last year, when it crossed the 10th year, there was a special award given to Innova for setting this record by the product.
Coming on to customer voices, you very well hear it from the people. For instance, people have told us that they have travelled 500-600 km a day, and still didn’t feel fatigued because of the travel — due to rear seat comfort. Those are the kind of feedback we get.
Innova customers get the highest resale value in the market, which is the strength of the product on lifecycle.
So it has been one of the biggest contributors of Toyota Kirloskar Motor and it has lived up to a great image with the customers.
How much Indian engineers have worked for R&D?
We have our product development team for India, working with the help of TMC, so we study and keep giving them information. India gave a lot of feedback on water bottles. Taking that interest, in Innova Crysta, there are a good number of bottle holders. The door pockets can hold 3 numbers of 1-litre bottles. Altogether the Innova Crysta can accommodate over 20 bottles of various sizes.
On safety segment, Toyota has been focusing on safety as an important aspect, and we started off by standardising the passenger and co-passenger airbags.
Subsequent to that, in January last year, we made it standard across all our products which included Innova also. Going forward, all our products will have not 2, but 3 airbags (including the knee-airbag) minimum, plus ABS, EBD and Break Assist — this will be standard across all models.
What are your expectations on the Innova Automatic?
This is the first time we are launching the automatic feature in Innova, which was purely based on customer feedback. This is why we looked at Innova having both automatic and manual. We will see how much of a demand AT will have after the launch.
Whatever studies have been made, depending on various situations, we expect the automatic to have 30-40% demand, and settling at a little lower percentage.
What are your thoughts about Innova being a strong competitor in the Indian car market?
Innova has become a success, thanks to our customers. Let me talk to you about the fleet segment. The tourists who come and talk to the travel agency, their first preference is Innova which speaks about the riding comfort and safety aspect that is much appreciated which leads to Innova being preferred by our customers.
Is MPV segment going to be the future?
There are two things clearly associated with the Indian market. One is the MPV segment, which keeps growing because Indians having large families, and who live in nuclear families during the working days would prefer to get together and go somewhere, and for that a bigger vehicle is required, where all of them can travel together.
Next is the SUV feel that people want. The comfort is better at a higher position.
Please share some details about Innova’s market share.
We have been making Innovas for Indian consumption. Innova has been the market leader in India, over the years, continuously. Last year’s market share was 33% and it was number 1.
In the beginning, it was in the range of 25% for 1-2 years, and then moved to 28% and now has come to 33%. We do not export Innova. Globally, it is sold in 50 countries, and has totally sold about 16 lakh units.
India is one of the largest markets, with Indonesia being another major country. India will be either the second or third market. Other major contributors for Innova Crysta are Thailand, South Africa, Middle East, etc.
What is your current production capacity?
We have two plants. Plant 1 is where Innova and Fortuner are made and we have a capacity of 1,00,000 with more than 92-93% efficiency with Innova and Fortuner. You can account Innova closer to the range 65,000-70,000, and Fortuner in the range of 17,000-18,000.
How is the Indian market different for Southeast Asian countries in terms of expectations?
If you are looking at expectations, Indian customers are the most demanding, globally. For them, you need to hit the sweet spot in terms of value. Value for money is one of the most important things. An arising trend in the Indian market that we are witnessing is that customers want personalisation, and are ready to pay for it. These are the trends coming with the younger generation.
If you are looking at Innova expectations, Innova being the best, performance-wise and cost of ownership-wise, the expectations have been on the improved looks of the car and interiors. Those were the two parameters we focused on, trying to bring in an SUV type of input, with the stylish and improved aggressive looks.
In addition, the customers wanted the interiors to look more inviting, and that is why you have seen, the improved dashboard, theatre-lighting system, rear-seat comfort with the cup holders. All these have been specially considered.
Are there any compact SUV plans by Toyota?
We at Toyota work on customers for life principle. There are gaps in our product offering range to customers, where we lose customers. Like for an Etios and Liva customer, for the next upgrade, they have to look at the Corolla Altis segment. But in between there is a segment which they miss out.
Similarly there are small pockets, like the compact SUV, which you have mentioned. We have been requesting our parent company, and there is a lot of work happening. Clearly we should get something, but not in the short term.
What are the sales expectations from the new Innova Crysta?
Frankly, we don’t talk about a specific number target. Basically, we are looking at 2 things. In the MPV high-end segment, we need to expand the market. We being the market leaders in the product are looking at expanding the market. Secondly, we are looking at increasing our market share by a larger gap.
With that plan, we are working on the volume, basis the bookings generated and slowly we will build our capacity to deliver the cars. We don’t have a number fixed to measure the success, but rather it will be measured by customers’ happiness. One big area we look forward to is that we are going to get a lot of our existing customers, to come and buy. Our expectations are to look after them and see to it that they are happy with the new product.
Please give a brief about the Innovative International Multi-purpose Vehicle (IMV) Platform.
The IMV platform gets 3 products made, 1 is the Hilux — which is the cabin body, 2 is Innova and 3 is the Fortuner. So it is a common platform. IMV — International/Innovative Medium Vehicle Platforms have been like that throughout. It is globally the same.
MPV is the other word we use, and the platform is called IMV. 2016 will be very important for us, as the customers have been waiting for 10 years since the launch of the previous Innova. This launch will be big for us, and secondly, the market will continue to expand in this segment, with us coming in. With all this, we look at the industry growing positively, and delivering better.
Which is the biggest market for Toyota within India?
South is our biggest market. To give the percentage zone-wise sales contribution: South – 38%, North – 36%, West – 21%, East – 6%.
Please give a brief about 2,000-cc diesel cars ban in Delhi and NCR region
We want to play a supporting role and help in building a solution for the global and Indian economy. Even if the ban continues, we have started working on the petrol power train, which will be made available to India, during the second half of the year. That way we will look at opportunities.
Going forward, we want to look at more hybrids in India. That is going to be the long-term solution.
We have to respect Supreme Court for addressing concerns of pollution in Delhi. Though with due respect to them, the scientific study conducted by IIT-Kanpur clearly highlights, vehicles above 2,000 cc, is not the root cause for pollution. There are other factors like dust, construction etc. The share of automobiles is only 2.5%. And if you look at Euro IV out of that, it is hardly some 0.2-0.3%
Is India ready for a petrol market for MPV spending Rs 20 lakh?
We have been offering petrol powertrain with the old Innova also, but demand wasn’t there at that time. Now with the new SC order, there is a lot of interest that has been coming back. Not just in Delhi, even in other places, people have looked up and started asking if there is going to be a petrol powertrain available. They would like to consider it, because there is a worry on diesel.
Overall enquires on small petrol cars petrol across the country also have gone up. There is a 5% variation in enquiries. The petrol powertrain — either it is made in India, or supplied from our sister concerns. We don’t get it outsourced.
How does Japan play a role in R&D with respect to Indian market?
R&D being at one place to study the global trends and requirements helps in designing the car much better. For example, when Innova was being made and India being one of the volume countries, lot of research were being to understand Indian customer needs. If a product sells much more in the US, there will be feedback taken from the US customers. There is a good load of analysis that are being done, and the product get tested in all these countries.
Number of global R&D centres
There are R&D center under 6 countries/companies. Japan:TMC, US:TEMA･TTC, Europe(Belgium):TME R&D/ Manufacturing China:TMEC, Asia(Thai): TMAP-EM, Australia:TTCAP‐AU
How much does TMC spend on R&D globally?
As 2016 figures are yet to be announced, during 2014 April-2015 March, it was to the tune ¥1,004.5 billion.
Please give a note on exports from India.
Our exports have to go to RHD (right-hand drive) countries, and we have to keep studying with our product range available, and how the acceptance comes. That is how we have worked with South Africa, Nepal for Etios and Liva. In terms of percentage of exports – 15,000 cars are exported, which is less than 10%.
Please take me through the journey of Toyota Innova in India
Toyota introduced the Innova in 2005, and since then it has been a journey of continued strength one after the other. We did bring in continuous improvements on the product, and the customer acceptance of the product has been great, thanks to the quality of the product and customer experiences.
It has become a cult product from us in India. If you have seen, there have been over 6 lakh Innovas till now, from 2005, and specially what I would like to highlight is, in the initial quality study that JD Power does, from year 1 till today, it has been number 1, with least problems for 1,000 cars, in the MPV segment.
Last year, when it crossed the 10th year, there was a special award given to Innova for setting this record by the product.
Coming on to customer voices, you very well hear it from the people. For instance, people have told us that they have travelled 500-600 km a day, and still didn’t feel fatigued because of the travel — due to rear seat comfort. Those are the kind of feedback we get.
Innova customers get the highest resale value in the market, which is the strength of the product on lifecycle.
So it has been one of the biggest contributors of Toyota Kirloskar Motor and it has lived up to a great image with the customers.
How much Indian engineers have worked for R&D?
We have our product development team for India, working with the help of TMC, so we study and keep giving them information. India gave a lot of feedback on water bottles. Taking that interest, in Innova Crysta, there are a good number of bottle holders. The door pockets can hold 3 numbers of 1-litre bottles. Altogether the Innova Crysta can accommodate over 20 bottles of various sizes.
On safety segment, Toyota has been focusing on safety as an important aspect, and we started off by standardising the passenger and co-passenger airbags.
Subsequent to that, in January last year, we made it standard across all our products which included Innova also. Going forward, all our products will have not 2, but 3 airbags (including the knee-airbag) minimum, plus ABS, EBD and Break Assist — this will be standard across all models.
What are your expectations on the Innova Automatic?
This is the first time we are launching the automatic feature in Innova, which was purely based on customer feedback. This is why we looked at Innova having both automatic and manual. We will see how much of a demand AT will have after the launch.
Whatever studies have been made, depending on various situations, we expect the automatic to have 30-40% demand, and settling at a little lower percentage.
What are your thoughts about Innova being a strong competitor in the Indian car market?
Innova has become a success, thanks to our customers. Let me talk to you about the fleet segment. The tourists who come and talk to the travel agency, their first preference is Innova which speaks about the riding comfort and safety aspect that is much appreciated which leads to Innova being preferred by our customers.
Is MPV segment going to be the future?
There are two things clearly associated with the Indian market. One is the MPV segment, which keeps growing because Indians having large families, and who live in nuclear families during the working days would prefer to get together and go somewhere, and for that a bigger vehicle is required, where all of them can travel together.
Next is the SUV feel that people want. The comfort is better at a higher position.
Please share some details about Innova’s market share.
We have been making Innovas for Indian consumption. Innova has been the market leader in India, over the years, continuously. Last year’s market share was 33% and it was number 1.
In the beginning, it was in the range of 25% for 1-2 years, and then moved to 28% and now has come to 33%. We do not export Innova. Globally, it is sold in 50 countries, and has totally sold about 16 lakh units.
India is one of the largest markets, with Indonesia being another major country. India will be either the second or third market. Other major contributors for Innova Crysta are Thailand, South Africa, Middle East, etc.
What is your current production capacity?
We have two plants. Plant 1 is where Innova and Fortuner are made and we have a capacity of 1,00,000 with more than 92-93% efficiency with Innova and Fortuner. You can account Innova closer to the range 65,000-70,000, and Fortuner in the range of 17,000-18,000.
How is the Indian market different for Southeast Asian countries in terms of expectations?
If you are looking at expectations, Indian customers are the most demanding, globally. For them, you need to hit the sweet spot in terms of value. Value for money is one of the most important things. An arising trend in the Indian market that we are witnessing is that customers want personalisation, and are ready to pay for it. These are the trends coming with the younger generation.
If you are looking at Innova expectations, Innova being the best, performance-wise and cost of ownership-wise, the expectations have been on the improved looks of the car and interiors. Those were the two parameters we focused on, trying to bring in an SUV type of input, with the stylish and improved aggressive looks.
In addition, the customers wanted the interiors to look more inviting, and that is why you have seen, the improved dashboard, theatre-lighting system, rear-seat comfort with the cup holders. All these have been specially considered.
Are there any compact SUV plans by Toyota?
We at Toyota work on customers for life principle. There are gaps in our product offering range to customers, where we lose customers. Like for an Etios and Liva customer, for the next upgrade, they have to look at the Corolla Altis segment. But in between there is a segment which they miss out.
Similarly there are small pockets, like the compact SUV, which you have mentioned. We have been requesting our parent company, and there is a lot of work happening. Clearly we should get something, but not in the short term.
What are the sales expectations from the new Innova Crysta?
Frankly, we don’t talk about a specific number target. Basically, we are looking at 2 things. In the MPV high-end segment, we need to expand the market. We being the market leaders in the product are looking at expanding the market. Secondly, we are looking at increasing our market share by a larger gap.
With that plan, we are working on the volume, basis the bookings generated and slowly we will build our capacity to deliver the cars. We don’t have a number fixed to measure the success, but rather it will be measured by customers’ happiness. One big area we look forward to is that we are going to get a lot of our existing customers, to come and buy. Our expectations are to look after them and see to it that they are happy with the new product.
Please give a brief about the Innovative International Multi-purpose Vehicle (IMV) Platform.
The IMV platform gets 3 products made, 1 is the Hilux — which is the cabin body, 2 is Innova and 3 is the Fortuner. So it is a common platform. IMV — International/Innovative Medium Vehicle Platforms have been like that throughout. It is globally the same.
MPV is the other word we use, and the platform is called IMV. 2016 will be very important for us, as the customers have been waiting for 10 years since the launch of the previous Innova. This launch will be big for us, and secondly, the market will continue to expand in this segment, with us coming in. With all this, we look at the industry growing positively, and delivering better.
Which is the biggest market for Toyota within India?
South is our biggest market. To give the percentage zone-wise sales contribution: South – 38%, North – 36%, West – 21%, East – 6%.
Please give a brief about 2,000-cc diesel cars ban in Delhi and NCR region
We want to play a supporting role and help in building a solution for the global and Indian economy. Even if the ban continues, we have started working on the petrol power train, which will be made available to India, during the second half of the year. That way we will look at opportunities.
Going forward, we want to look at more hybrids in India. That is going to be the long-term solution.
We have to respect Supreme Court for addressing concerns of pollution in Delhi. Though with due respect to them, the scientific study conducted by IIT-Kanpur clearly highlights, vehicles above 2,000 cc, is not the root cause for pollution. There are other factors like dust, construction etc. The share of automobiles is only 2.5%. And if you look at Euro IV out of that, it is hardly some 0.2-0.3%
Is India ready for a petrol market for MPV spending Rs 20 lakh?
We have been offering petrol powertrain with the old Innova also, but demand wasn’t there at that time. Now with the new SC order, there is a lot of interest that has been coming back. Not just in Delhi, even in other places, people have looked up and started asking if there is going to be a petrol powertrain available. They would like to consider it, because there is a worry on diesel.
Overall enquires on small petrol cars petrol across the country also have gone up. There is a 5% variation in enquiries. The petrol powertrain — either it is made in India, or supplied from our sister concerns. We don’t get it outsourced.
How does Japan play a role in R&D with respect to Indian market?
R&D being at one place to study the global trends and requirements helps in designing the car much better. For example, when Innova was being made and India being one of the volume countries, lot of research were being to understand Indian customer needs. If a product sells much more in the US, there will be feedback taken from the US customers. There is a good load of analysis that are being done, and the product get tested in all these countries.
Number of global R&D centres
There are R&D center under 6 countries/companies. Japan:TMC, US:TEMA･TTC, Europe(Belgium):TME R&D/ Manufacturing China:TMEC, Asia(Thai): TMAP-EM, Australia:TTCAP‐AU
How much does TMC spend on R&D globally?
As 2016 figures are yet to be announced, during 2014 April-2015 March, it was to the tune ¥1,004.5 billion.
Please give a note on exports from India.
Our exports have to go to RHD (right-hand drive) countries, and we have to keep studying with our product range available, and how the acceptance comes. That is how we have worked with South Africa, Nepal for Etios and Liva. In terms of percentage of exports – 15,000 cars are exported, which is less than 10%.
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(Published 17 May 2016, 15:36 IST)
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