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Just how much should a car that's sold 30 million units worldwide, sell in India? By Suveen Kumar Sinha
Looks like multinationals operating in India are making a fetish of following the Hindu calendar - if only because this determines much of the spending seasonality. Marketers of durables often time their best launches to coincide with the hit Diwali-Puja season. Toyota Kirloskar Motors is no exception, it seems. It chose January 14, which traditionally marks the resumption of auspicious deeds after an inauspicious 30 days, to launch the world's top-selling car model, the Toyota Corolla, in India. As a brand, or sub-brand rather, the Corolla doesn't even come within a whisker of the legendary Volkswagen Beetle (which, as a name, continues to boast of a unique set of values and associations). But in terms of raw sales, the Corolla is far ahead. Since the original version was launched in 1966 (it has undergone reskins and redesigns on an almost annual basis), Toyota's flagship product Corolla has sold 30 million units across some 142 countries - and is still purring down the world's highways. Simply put, the Corolla is what a 'car' is thought to be in most developed markets. Yet, by classic market reasoning, it cannot sell large volumes in India. This is because the mainstay of the market has still to graduate fully from small cars (though it has moved up from the entry-level Maruti 800) to three-box sedans. Going by global observation, this switch in 'road predominance' typically occurs once an economy nears an income level of $1,000 per head, twice India's current figure. The sedans that do manage to sell in five digits every year are the low-priced 'India relevant' models that don't sell in advanced markets, such as the Ford Ikon and Opel Corsa. Hyundai Accent, Honda City, Opel Astra and others in the next price-bracket sell moderate volumes. And the Corolla is even more expensive - bridging the so-called C segment of sedans and the D segment of luxury saloons. The Corolla sells in two engine options, 1.6 and 1.8 litres. The prices range from Rs 9.8 lakh (ex-showroom, Delhi) to Rs 11.5 lakh. That's high enough to get upgrades from C segment cars such as Hyundai Accent and Honda City, and low enough to tempt a would-be luxury car buyer out of a Ford Mondeo, Hyundai Sonata or Honda Accord. Toyota's target: 10,000 Corollas in 2003. Can Toyota get there? On plain price affordability logic, it seems impossible. But then, brand strength mustn't be ignored. The Corolla has made a fine debut, by way of getting Indian eyes directed in its direction (it has been watching Ford's moves closely, as it seems). The headlamps are nice and curvy, so the design is 'with it', given the local context. The rest of the car looks good, too. But will the campaign go any further? The one rival Toyota would need to worry about is the other C-and-D bridge product, the Skoda Octavia, which is priced similarly but looks hunkier in a BMW-ish kind of way. The Octavia is doing rather well. This is because of two things. One, a price-value equation seen to be so technically favourable (a near BMW at such a low price). And two, a brand that has secured place for itself in the urban Indian sophisticate's mind. On the price-value front, the Corolla is reputed to be a fine machine under the hood as well. In terms of brand recognition, it outscores the Octavia. If the Corolla were to sharpen its brand personality, it could well touch five-digit sales this year.
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