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The Rediff Business Interview/Kosuke Yamamoto

'India's auto industry will soon see a million new cars a year'

Toyota Motor Corporation rolled out its multi-purpose vehicle Qualis on January 11 on the eve of Auto Expo 2000 in New Delhi. The Japanese auto major has been testing the Indian waters for a long time in a joint venture with Kirloskar Motors. Toyota’s utility vehicle concept, the 2.4 litre diesel Qualis, specially developed to suit Indian roads, will be available in three models with seating facilities for eight to ten persons, and will be priced between Rs 458,900 and Rs 739,900 depending on the model.

The Family Saloon model, which is the base level, comes with three price tags (ex-showroon in Delhi) -- Rs 458,900, Rs 499,900 (with A/C) and Rs 531,900 (A/C, power steering and two speakers audio and seating for eight). The Grand Saloon model comes with two price tags -- Rs 576,900 (A/C, power steering and seating for ten) and Rs 660,900 (double A/C, power steering, power windows, two speakers and seating for ten). Lastly, the Grand Saloon Touring, the high-end model, comes for Rs 739,900 (double A/C, power steering, power windows, two speakers, seating for ten and a package option).

Kosuke Yamamoto, executive vice-president, Toyota Motor Corporation, Japan, spoke to Neena Haridas on the new vehicle and his company’s future plans for the Indian market. Excerpts from the interview:

What took you so long to finally launch your products in India?

We have been studying the market for the last couple of years. Yes, we are a rather late entrant but we thought it was better to come to the market after doing the research and understanding what exactly the consumers want.

Both Toyota Kirloskar Motor and Toyota Motor Corp, Japan, have been doing the market research, and then we came to the conclusion that this is the right time to launch our products. We have invested about Rs 7 billion in the Indian market till now and I think that is proof enough to show that we are very serious about India.

Why did you decide to enter the market with a multi-purpose vehicle and not the more popular small car?

The world over, there is a growing market for multi-purpose vehicles. And then, we believe India is a truly global market reflecting the global trends.

Besides, India has large families, joint families and a big car like this would be more useful for them. Hence we decided to launch the multi-purpose vehicle here. In any case, we are not promoting the Qualis as a jeep, it is a car.

But it looks very much like a jeep or an MPV to a prospective consumer. How will you sell the idea that it is as smooth as a car?

Well, we will try hard. We have already launched the touch-and-try campaign where a prospective customer can come to any of our 23 dealers and test-drive the vehicle and that will convince him that the Qualis is a workhorse that is as comfortable as a luxury car. Besides, all our commercials are aimed at selling the idea of comfort and smooth drive. Above all, our pricing, I think, is very competitive.

You have priced your products much lower than your MPV competitors such as the Tata Safari or Tata Sumo. Are you selling below your production costs?

This is just an introductory offer. We are selling below production cost. But we will be increasing the price after we have established ourselves in the market. These price tags are an extension of the touch-and-try campaign.

We want more and more people to try it and then spread the word around. But if you ask when and by how much the prices will be hiked, I can't say. It all depends on the kind of response we get from the market.

Who do you really fear in the market -- the Tata Sumo, Tata Safari, or the Mahindra Armada?

Well, they are all kind of competition and then they are not. Because as I said, we are not just positioning the Qualis as an MPV, we are also selling the idea of it being a passenger car. Besides, we are targeting the Qualis at both urban and rural markets. That way, we've a broad base of target audience.

But how can you be everything to everyone? Don’t you think it is a better idea to target a core group?

That is one way of looking at it. Our range -- both in terms of model and pricing -- is such that there is a product for everyone.

The Qualis is not a four-wheel drive vehicle. Then how do you expect rural consumers to buy it since the rural terrain needs four-wheel drives like the Safari or Armada?

No, I don't think that is true. We had extensive research on hilly areas, mud, rural roads, etc, and found that Indian roads don’t always need four-wheel drives. A two-wheel drive is good enough. Hence, we have no plans to either introduce a turbo engine or make it a four-wheel drive in the near future.

What other models are you planning to launch and when?

We will be launching several other models. The small car segment is a potential market and we are keen on entering this market. We have started our research and we will definitely come out with a small car soon. Well, not this year, but soon enough.

What do you really think of the Indian auto industry?

Well, it had a tough ride for the last couple of years. But fortunately now, it has started on a good note once again. We are lucky. But I think the real pick-up will begin once the market matures into a million cars a year. It will happen soon, and as I said India is really a global market.

What do you think of the demand for reducing customs duty on second-hand cars?

I don't think that is going to affect the existing players much. But there is also the fear of the market being dumped with substandard goods.

Four-wheel drive (4WD): A secondary transmission assembly, called a transfer case, is driven from the main transmission and distributes power to both front and rear axles. This Transfer Case usually has three selections: Neutral for two wheel drive; 4WD High for slippery conditions such as gravel roads or sand; and 4WD Low for serious off road use. Four-wheel drive can be full-time, in which power is delivered to both axles at all times or part-time, where the driver selects either two or four wheel drive. Back to the interview.

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