The Japanese carmaker Toyota Motors will follow the successful strategy of their rivals Maruti Suzuki and Hyundai Motor which sell a sizeable number of their small cars in India’s rural. Toyota is present in the country through a joint-venture with Bangalore-based Kirloskar Group. The carmaker is putting up a rural sales division to strengthen its marketing plan for the Indian automotive market.
Naomi Ishi, Managing Director of Toyota Kirloskar Motors, stated that India is a vast market and to capitalise on the extensive model offerings, the company has embarked on a new strategy to go rural. We have chosen our compact model Liva that is an ideal product with a right price and packaging for the Indian rural customers, looking for high-value preposition, Ishi added. At the moment, a small percentage of the company’s sales volume comes from rural markets, which it wants to take to double digits in the next few years.
Toyota has assigned its dealers to begin village roadshows, with emphasis on the carmaker’s vehicle quality and service. The company that has more than 250 dealerships across India has plans to start more rural outlets in coming months. It would also employ mobile service vans in rural markets.
Toyota estimates the Indian passenger vehicle market to double to around five million units by 2020, and it believes that a significant amount of the demand will come from towns and rural markets.
It plans to sell around 40% of its cars in the rural markets.Companies like Maruti and Hyundai were the first to cater to rural market and are drawing a large chunk of their sales from the rural. Maruti has doubled its marketing wings to over 93,500 villages this year from 44,374 villages last fiscal year. South Korean Hyundai has around 15% of its India sales coming from rural markets.
Toyota Kirloskar had display a marginal 2% gain in sales for the first five months of this fiscal year. It has an installed capacity to manufacture about 3,10,000 units a year, but at least half of that is not utilized.