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Originally Posted by MMV While the rebadging may work economically as a business strategy, at least in short term, wonder whether Toyota has evaluated the impact on its brand due to this. MS , though the market leader is still not seen as maker of robust cars (read build quality and safety). Also people buying cars worth 10+ lacs don't consider MS as the undisputed choice unlike the segment below 10.
IMO unless the rebadging strategy is not logically concluded and evolved into a better business integration in 2 years, brand Toyota will have lot to worry about and brood over. |
The Indian market is fragmented in many tiers. The Sub 10 Lac On Road segment is driven by value for money cars with major competitors being Maruti, Hyundai and Tata. If one asks me to compare these three, I would rate MSIL to be the best of the lot.
The fact is that Toyota has thought long and hard at the small car segment which is the backbone of the Indian Market. They tried with a Made In India product in the Etios series and they did not do well. Toyota had to make as many as 40 changes to that product ever since they launched it in the market. Just goes to show their expertise in the small car segment. The situation of the customers who bought an Etios Liva was never better than those who bought a Swift !!
So the QDR which we talk about for Toyota was never there in the Etios series at the beginning. They trialled and erred and kept on improving on the product with time.
The end result was that the product flopped and never caught the imagination of the Indian customer. Also, I would add that they did it a cost. A cost to their customers. They never managed to keep the prices under check. The Liva and the Etios costed the customers at least 50 K more than the competition with no bells and whistles !
Toyota was unable to make good cars at the price point the customers expected them to make !
And MSIL smartly divided this sub 10 lac segment into two segments. The sub 6 lac segment which they targeted with the Altos and WagonRs; and the Sub 10 Lac segment which they targeted with the Baleno and the Glanza.
Their is a distinct difference between these two segments at MSIL. The Altos, Spressos are below average products and bang for the buck.The Baleno and Vitara Brezza are at par with the market in safety and general reliability at a competitive price point.
Toyota is not going to the sub 6.5 lac category. It is trying to establish itself in the sub 10.5 lac category with products that are proven, acceptable and competitive.
I remember seeing spy shots of Daihatsu cars running around in Bengaluru. They had their team in India trying to assess if Daihatsu could match MSIL in being competitive and cost effective. I think the result was that even Daihatsu team bowed away concluding that they could not compete with MSIL when it comes to cost effectiveness at an acceptable quality.
My conclusion is that when it comes to this sub 10.5 Lac category the difference between a MSIL product and others is not much. MSIL products are good for what they offer and Toyota would not have offered anything extra-ordinary at this price point from its own stable anyways !
What Toyota had intiially offered with this JV wass a better brand, and reliable after service. Toyota services are more customer friendly than MSIL. I have driven an Innova for years and tried their services at three different dealerships. The uniformity across the places had amazed me everytime. Plus the service centres are less crowded than MSIL and that's an added bonus. The grudge was that the JV Products looked like Seeta and Geeeta on the roads !!
As it is being hinted that upcoming Compact SUV will have differentiated exteriors and interiors from the Brezza, solves my grudge against them atleast. If I buy this car then I get the brand of Toyota, the reliability of MSIL (which is good at this segment),hassle free service experience and this time no one calling it a duplicate as was the case with the Glanza !
I would rather wait for this SUV and have a good look at it before I book a Sonet or as a matter of fact any other compact SUV !