[deetjohn]

I wonder how many more manufacturers have to fail and quit this skewed market before the entitled keyboard warriors get off their high horses. I have seen continued usage of words like good riddance and perform or perish etc in these threads.

In the long run, who is to gain when manufacturers quit one by one?? Certainly not the customers or the industry which employees lakhs of people.

If a company like Toyota with their immense brand loyalty, very very premium pricing and one of the most money minting badge jobs ever cannot make money in this market, I doubt who else can! And how long are these companies going to survive??

The writing is on the wall. And it is not always the companies fault. The stupid stupid regulations, substandard products with skin deep cost cutting and INSANE taxes have killed the auto industry. The golden goose from the 90s is dead.

With the current pricing and taxation, both customers and manufacturers are bearing the brunt. If the manufacturer gets only ~40% of the ex-showroom price and the rest goes to the government, how are they to survive?? And it is better not to talk about the value gotten by the customers here when buying a car. What are we getting back for the money we pay? Safety? Performance? Technology? You scratch the surface on most new cars and there is not much one gets in return! And that equation cannot sustain in the long run.

That said all is still not lost. The global auto industry is on a huge pivot with the EV revolution and this country stands to gain if the current rules, regulations and taxes are altered and improved to put the value back into the hands of the manufacturers and customers.

The babus sitting in their cars with the red beacons shouldn't give into lobbying!! Safety has to be global standard, Technology has to be global standard - only then can this market become a hub! The people in countries outside won't touch the junk that we buy here even with a barge pole.

What gets made for the domestic market should be good enough for exports too. Only then can the manufacturers get sufficient numbers and profitability. Else, we are sliding very fast into the 80s and before when it comes to auto industry!

And I totally DO NOT get the idea of talking about of pedestrians, two wheelers or three wheelers when it comes to safety. That is simply a deflection mechanism of the narrow minded. If we wait to improve everything else before we embark on certain initiatives, we will just sit and wait. For ever! Like we have been for past many decades. Real life doesn't function like that.

And I really really hope there is a turnaround for the better!

[The Rationalist]

If Toyota can't make safe and good looking cars which are appealing to the market, let them shut shop. The customer don't have to pay through the nose just because Toyota has a brand name! Toyota is not making cars out of carbon fiber or Aluminum to ask for the kind of money they are fleecing.

If Tata and Mahindra, who have only presence in India can design and manufacture safe and stylish cars, why not Toyota with all all their might? Only one reason, they ain't bothered about our market. I'm not going to pay stupid amount of money for a stupid company.

And people talk about reliability of Toyota as if every other manufacturer is selling vehicles which are always in workshops. I have used 3 Maruti's and 2 Ford's, I haven't faced anything drastic in these 20 years to run to Toyota! There's not even a vehicle from Toyota that is tested safe in India, nor is there anything which is financially prudent. Market is the best judge, you give good cars which people want, then they will buy.

Nothing will happen if Toyota leaves India, we have enough brands which are committed to the market. People should stop this blind Toyota worshipping. Nokia, Kodak and the likes have bit the dust, did anything happen? It's upto Toyota whether they want to sit on the past laurels or continue to innovate in a extremely competitive world. Forget about their pathetic looking cars, they don't even have a good EV, so much for their competitive mentality. People are talking as if Toyota is doing some favour on Indians! MG motors have launched 3 cars in as many years, what have Toyota given us, Baleno and Brezza! Please leave the market this year itself, will be really thankful. Fanboys can cry as much as they want.

[V.Narayan]

Why is this surprising? And what does this have to do with either Toyota's rich pricing strategy, partial merger with Suzuki through re-branding or the Govt's policy on indirect taxation.

2020-21 as most would know, but some have forgotten was the year of covid19 with lockdowns & partial lockdowns almost all through that financial year and the dreaded second wave smacking us with all its fury towards the end. It was also the year where in April & May 2020 almost no cars were sold due to the severe lockdown conditions imposed. With that background is it any surprise that a major engineering brick & mortar business would end up posting a small, very small loss. The ~Rs 2600 crore drop in revenue would have very roughly knocked out Rs 185 crore of operating profit assuming the previous years margin rate. Compare that with the net profit of 2019-20 of Rs 187 crores. Profit & Loss account movements don't work in such linear ways but a first glance at the numbers with no other data available tells me this is purely due to covid19 driven reduction in revenues and not fresh inefficiencies in production & overheads. Of course a detailed view of the cash flows will reveal more. Given that the depreciation number must be much more than Rs 55 crores I doubt this is a cash loss.

A 0.4% net loss in a year of a global crises does not warrant a major change of strategy. 2021-22 could prove a profit making year again. Unlike American OEMs Japanese, Chinese and Korean OEMs are made of more resilient molecules. They don't jump and run at the sight of a small loss.

[careind]

People say Ford exiting the Indian market is due to bad tax laws. But if a company amasses 2 billion dollar loss over 20 years whereas other manufacturers minted money, then it is the mistake of the company.

Taxation is a level playing field for all car manufacturers and they have to give what different categories of people want and know where the money is and be profitable.

MSIL and Hyundai target the lower and lower mid end spectrum where the volume/money is. Imagine Hyundai trying to survive with sales of Elantra, Tucson and Santa Fe. They had to have shut shop long before. In that context it is actually a welcome surprise for Toyota that they could manage to stay afloat till now, thanks to their over priced duo.

Mid and higher segment is fine, but in india you need to have a strong offering in the lower and lower mid segments as well and need to consistently churn out newer models in that segment.

It is no wonder Honda is struggling ( basically another dual horse company) as the city is probably the oldest brand in india, after the Alto. But it is still going relatively strong along with Amaze. Not hearing much about WRV. They can Enjoy till the ride lasts!

[discoverwild]

Originally Posted by discoverwild

They sell an average 6,000 cars of the Innova and Fortuner month on month, even more earlier. Not taking into account the rebadged Marutis. At an average of 30L per car minus 50% in taxes, their turnover is about 900 Crores per month. That's in the range of 11,000 Crores per year. A 55 Crore loss is not even a mosquito bite. A measly 0.5%.

Bear in mind that all their models are high value, 30L being their lowest priced car for now.

To put things into perspective, Maruti has to sell close to 50,000 vehicles to achieve the same turnover month on month. Toyota has it relatively easy in India just because of their brand name and the old sense of reliability.

[Latheesh]

There will not be any major product launch from Toyota. They are not happy that we did not make their Rs.3000 Crore project success (Etios Liva twins). They are also not happy that we did not buy their overpriced Yaris in thousands. There will not be any major investment by the parent company. All we are going to get is rebadged Maruti cars. I will not be surprised if they sell rebadged Ciaz as Corolla X edition.

I see that Innova and Fortuner monthly sales numbers are very incosistant. How are they managing it?

[Mafia]

This is a situation best analyzed next year. The recovery from Covid(so far) has resulted in a huge upswing. The pent-up cash and frustration are flooding the markets. Once things normalize, all of us will know the real state of our respective industries.

Most automakers will have a breakeven year if not profits for FY 2021-22.

The only spanner in the works is the chip shortage. On the flip side, the used car market is on 'fire'.

[DicKy]

This thread is the definition of 'kick a man when he is down'

Can understand the frustration here stemming from TKM's lack of offerings and higher prices. Reserving my comment till the D22 Creta rival arrives (if it does) in the market. That said, this loss is probably pocket change for Toyota HQ.

[ruzbehxyz]

Originally Posted by volkman10

Toyota posts first loss in 5 years on slow sales.

The main reason for this is obviously Covid. However I am sort of surprised that even after charging a super premium on cars like Innova and Fortuner, the company is still in a loss. Toyota already takes a big premium at the start and with reduced costs of service, the owners think that the service is very cheap, who in turn have already paid for it at the start. None the less, Toyota service is top notch and by far one of the best in India.

[Contrapunto]

Originally Posted by Axe77

IMO Toyota only has its poor management choices (whether local or global HQ) to blame for this predicament.

You are spot on. I have another perspective on this. I think their JV partner also has to blame. Just as a bad marriage holds back the potential for the couple, the JV with Kirloskar is holding Toyota back (even granting they have some ambition in India). I doubt Kirloskars have the financial heft to invest large sums (their share of the JV) to ramp up capacity, invest in new battery plants etc.

If you want to fund expansions out of operating profits only, you have to either accept that a bet on "slow pace" will work out for you, or take in more debt (which Japanese businesses typically do not do).

My summary? Unless Toyota can buy out their JV partner, they have to reconcile themselves to a slow road to irrelevance. Good to remember, MSIl also flourished only after Suzuki grappled with this bull ( JV %age stake with Govt) by its horns and took substantial control of their business in India.

[arun_m5]

All these comments bashing Toyota make no sense, their peak profit was 1.39 Lakhs per car, despite having such a stellar reputation, track record and service quality.

It's quite bizarre that most people here think a Seltos or a KIA vehicle is a better product just because it has a fancy feature list, when in reality that's not even anywhere in the same league in terms of mechanical quality as a Toyota.

I do wish Toyota is successful in India, but with the general mentality of car buyers today looking for a long "feature list" it'll definitely be tough on the company.

Long story short, the day Toyota leaves the country would really be the worst day for an auto enthusiast with an understanding of what they stand for and I'd honestly think of moving elsewhere. You can blame their "strategy" all you want, fact is the consumer preferences are shifting for the worst and they are being blinded by lower prices.

[AROO7]

The two golden goose of TKM, Innova and Fortuner are facing the brunt of pandemic. Not many were traveling up till now due to COVID/COVID-related restrictions. So Innova's sales would be affected being the prime choice of hypermilers. Fortuner with the recent price hike has gotten into the niche and expensive club. People were up till now strongly keeping big-ticket purchase for later. That takes a hit on Fortuner's sales number.

Coming to the MSIL re-baged cars, they would be selling in decent numbers but don't have the fat profit margins as the Innova and Fortuner.

Another small yet significant contributor is the NGT's ruling. Even though Innova and Fortuner have Petrol models not many opt for them. While spending a big amount on diesel models isn't financially prudent when you have to scrap the car 10 years down the line for peanuts.

In my opinion, the last quarter of 2021 and 2022 will see TKM's bottom line improving again and this would be a one-off incident and very well accounted for by the Toyota Bosses sitting in Japan.

[zensure]

Originally Posted by Turbanator

One thing that’s being overlooked by most is their input costs. A simple bolt that most of the manufacturers use costs X times more to Toyota. If someone checks these small things, they will realise the amount of engineering that goes into their product. They are no fools running the largest company in the world, with a reputation that precedes everyone else. It’s a fact that they don’t go for the shortcuts in manufacturing. When others can pick and drop a vendor or change the design/ specs, just at the drop of a hat, TKM enters into long contracts. They have so many checks, many redundant too but that’s their way. All this costs money and also ensures there are no surprises when the customer uses their vehicle.

.........

But this does not sound good. Like Ford, they may find our market not very interesting considering their overall global sales.

I second this. Just look at the TCO of a car like Innova. Even today, its annual regular service cost is less than 10K. Insurance is one of the lowest for that size of the car. That's quite an acknowledgment for their product. Even for Fortuner, the annual regular service cost is less than 20K INR.

I hope the loss is just a blip in the prevailing situation and they would be back on their feet and profit zone soon.

Having said, it is unfortunate that Toyota in India is only a two-horse company (not counting the rebadged products). When you look at the top end Innova costing around 32L in Bangalore, vis-a-vis Korean cousins or more capable Jeep Compass, you hardly see any equipments

Well, only time will tell if Toyota will pack off. But one thing is certain - the exorbitant taxes, cess and toll all the way - for vehicles, fuel and Toll, and income tax - we are going to see an underdeveloped automotive market for a foreseeable future. Before any one jumps at me on the revenue needed by governments for development - all that I am saying is high taxes on all three levels - on vehicles, fuel and toll is unreasonable.

[patwardhan]

I think their tie up with Maruti has dented their reputation. They also discontinued Corolla which was a highest selling model due to BS6. Why will someone by a rebadged Maruti car ? Toyota should re think its India strategy, Innova is not in budget anymore and so many competitors have decent offering at lesser price. I think its a wake up call for them

[AllisWell]

Originally Posted by arun_m5

All these comments bashing Toyota make no sense, their peak profit was 1.39 Lakhs per car, despite having such a stellar reputation, track record and service quality.

It's quite bizarre that most people here think a Seltos or a KIA vehicle is a better product just because it has a fancy feature list, when in reality that's not even anywhere in the same league in terms of mechanical quality as a Toyota.

I do wish Toyota is successful in India, but with the general mentality of car buyers today looking for a long "feature list" it'll definitely be tough on the company.

Long story short, the day Toyota leaves the country would really be the worst day for an auto enthusiast with an understanding of what they stand for and I'd honestly think of moving elsewhere. You can blame their "strategy" all you want, fact is the consumer preferences are shifting for the worst and they are being blinded by lower prices.

Is this a joke? Toyota doesn't even have a car competing Seltos and Creta. Toyota has also started re-badging Maruti which is essential known only for it's cost cutting and fuel efficiency.

Toyota doesn't have superior mechanicals. There are very few mechanical failures in today's cars. The failures are usually related to the ever increasing technology present inside the cabin, which Toyota doesn't even offer. Consumers are not blinded by lower prices. Toyotas are priced so very exorbidantly high with such fragile portfolio of cars. A common man can't afford an Innova nor a Fortuner.

The Yaris was a pricing disaster. You can't price a new sedan which costs more than the segment leading City and expect people to flock to the showrooms.

The day when Toyota decided to re-badge Maruti marked its end of legendary reputation. It doesn't care about it's customers, nor about safety of the vehicles sold. If they do choose to shut shop, so be it. It's not like they are offering cars in every segment anyways. Customers have literally nothing to lose.