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Business – Toyota’s new SUV Fortuner sets sales chart on fire

John Sarkar

NEW DELHI: It wasn’t exactly built for speed. But ironically, Toyota’s new SUV Fortuner is setting the sales chart on fire here

The phenomenon, which can now safely be called the “Fortuner Effect”, has hit the sales of these rival vehicles like a sledgehammer, despite some of them such as Ford India launching new variants of their existing models. In a span of 30 days after the Fortuner’s launch, Toyota Kirloskar Motor received bookings for 7,000 vehicles, which is roughly 10 times more than what the other companies sold collectively in the month of August this year.

At the same time, sales figures of rival SUVs have been declining drastically. Last month, Ford India saw an 85% drop in sales of its Endeavour over the corresponding period last year. When contacted, a Ford India spokesman refused to comment.

In the same month Hindustan Motors sold 118 Pajeros compared to 202 units in the year-ago period. And Honda Siel, which was the leader in this segment with its CR-V, has adopted a confirmed order system for selling the vehicle here. It means that only when a customer books the vehicle will it be imported to India. This has given rise to a waiting time of three months.

Compared to 129 vehicles in August last year, Honda sold 77 CR-Vs during the same month this year. But Jnaneswar Sen, VP (marketing), Honda Siel Cars India (HSCI), has a different explanation for the low sales.

“The current strategy on CR-V has nothing to do with competition coming in and was taken well before in the beginning of this year itself. The rupee witnessed a depreciation of over 16% versus the dollar in the last one-year and the yen strengthened by 10.5% during the same period which led to our import costs consistently rising. While we absorbed the cost for some time, but from April 09 onwards, we had to increase the price of the model by more than Rs 3.5 lakh. This changes the price value equation for the customer.”
And the grapevine has it that Honda is contemplating launching a diesel powered CR-V here (with a 2.2L I-CTDi engine), but a HSCI spokeswoman shot down the theory. “We have no such plans,” she said.

Such has been the Fortuner’s success that Toyota Kirloskar Motors (TKM) is planning to ramp up production capacity of Fortuner from November this year.

Initial success due to TKM’s homework

At present, the company has a facility to assemble only 500-600 units every month. Says Sandeep Singh, deputy MD, TKM: “Earlier dealers were taking Rs 1 lakh as advance. But now we have asked them not to take any booking money and promise a tentative delivery date to the buyer.”

And with reference to the overwhelming response to the Fortuner, Mr Singh attributed the initial success to TKM’s homework. “The launch of the Fortuner is part of our long term strategy to bring out a second vehicle on the IMV (Innovative International Multi-purpose Vehicle) platform, after the Innova. Yes, we have conducted surveys to better understand customer expectations in India. The ‘image’ that a vehicle offers is very important to the Indian buyer. The surveys have revealed that Indian customers associate the word ‘SUV’ with a ‘rugged and macho’ image, especially linked with four-wheel driving. However, the actual usage of an SUV in India is primarily urban driving and, to some extent, for weekend getaways from the city. Sitting capacity or space is also very important to the Indian customer, who likes to travel on weekends with his family. Also, in the SUV segment, diesel is preferred over petrol for fuel efficiency.” But then at the end of the day, Toyota has shown that hard work pays off. And in some cases, it also leads to good ‘fortune’!

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September 28, 2009 - Posted by | Uncategorized |

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