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Rural India is a strong emerging segment

World s leading automobile manufacturer Toyota has set nbenchmarks in several spheres In an exclusive chat with b Sandali b of nR amp M nbsp General Manager Sales and Operations of Toyota b Rajeev Sharma b ntalks about the journey of Toyota in India its future targets as well as ncompany s strategy to tap the non-metro segments of the Indian market


Rajeev Sharma
General Manager, Sales and Operations, Toyota
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To begin, how would you sum up  the journey of Toyota in India so far which is believed to be one of the fastest growing car markets in the world?
Since the day we came to India, our journey has been excellent. Thanks to our global repute, it didn't take quite an effort to make customers in India understand what Toyota stands for. Only thing we had to ensure was to deliver quality and match customers' expectations. And that is what precisely we have been doing since our arrival here. That is the sole  reason why our products like  Innova, Corolla and Fortuner  are enjoying  the leadership position in their respective segments in the Indian market.

How do you see Rural India as an emerging market for Toyota?
Of course, it is a strong  emerging market for us. In last  10-15 years, we have seen that if we want to succeed big-time in India, penetration in the  rural market is a must.  Afterall, the buying capacity of rural India has grown by leaps and bounds. The mode of communication too has become easier than what it used to be. With the help of internet, rural customers  get to learn about the car much before its launch.  I strongly feel that in the coming years, rural market will drive the entire industry.

What is the percentage of business Toyota is getting from  the rural market?
On an overall basis, it is close to  8%.  In north India, the penetration is a bit better which is around 11 per cent - a sharp rise from  just  6 percent two years back.  This is primarily because of arrival of Etios and Liva models. With these two models, our representation in Indian Automobile industry has moved to 50 %. Still we are not there in the voluminous entry level "A" segment.

Market leader Maruti has localized their brand and this is believed to be helping them in staying ahead of the race.  What about Toyota? 
Will it eventually resort to a similar strategy? If you mean reach to the customer, then we can not compete  with competition like Maruti as we are only representing in 50% of the Industry. But at the same time, we are continuously enhancing our reach to customers. Our Dealer network has increased 3 times from 2008. As we had  82 dealer outlets in 2008 and now we have expended our dealer network  to 262 as of 31st of August, 2013. With this expansion we have also moved to rural pockets of the country.

Any plans for new investment by Toyota for creating some employment opportunities in rural India in terms of manufacturing?
For manufacturing, I am  not  the right person to answer. But I can say that we are expanding our network, we are going to the rural India which will definitely result in creation of new job opportunities. We need people not directly at Toyota. But  our expanding network  will create  a lot of opportunities for the people from the rural areas.

What has Toyota done in regard of the Corporate Social Responsibility, Environment Protection and Clean Technology?At Toyota we understand our Social Responsibility. "Greenathon" is one of our social responsibility initiatives which we have been doing for last many years providing healthier environment and also Solar electricity to the villages. Tree plantation is another initiative which we have taken up. Then we have created a Gurukul within our plant in Bangalore wherein technician course for two years is imparted to the people from rural background and they subsequently are also meaningfully absorbed. It is basically a skill development initiative tailor-made to support the bright youth from rural India.

How do you find purchasing behavior of Indian customers especially in Rural India?
One trend which we have clearly noticed in our rural customers is that before buying any expensive product, they normally  take  opinion from various sources - maybe  from  friends, colleagues, or even bank managers.  At the same time, as the mode of communication is changing fast, rural consumers are also becoming brand conscious. Earlier it was only the buying cost which was their prime consideration. But now they are also looking for value and have a better understanding of the difference of quality and ownership experience.

The Indian currency has been on a roller-coaster ride for quite some time and other economic parameters are not in fine fettle as well.  The automobile industry's growth in India too has witnessed a serious slide. Do you expect more troubles in the near run?   We don't subscribe to the view that we can't grow during the difficult time. The monsoon has been  good and we are approaching the busy festive season.  I think, car sales will pick up in the coming months. On long term prespective  India has big  potential given the huge appetite this country has for automobile products. If we compare India to any developed market - the vehicle ownership per 1000 people is 500 plus in Japan and 600 plus in the U.S. But in India it is only 22 per thousand. The existing gap ensures that our long term prospects are intact.

Finally, just give me a sense of the kind of  employment you have created in this country? On an average, close to 7000 people are on company's direct payroll in India. And we have more than 260 dealers outlets who in turn have employed a significant number of people which in our standpoint is indirect employment. 

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