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Toyota set to hike Qualis, Camry prices in July
Fakir Chand in Bangalore | June 21, 2003 16:43 IST
Toyota Kirloskar Motor Ltd, the Bangalore-based joint venture between Toyota Motor Corporation of Japan and the Pune-based Kirloskar group, is set to hike the prices of all its models from next month.
This is being done 'to neutralise the growing input costs on account of rise in steel, diesel and transportation prices over the year.'
Toyota Kirloskar Deputy Managing Director K K Swamy told rediff.com on Saturday that the price hike was imminent and in line with the industry players who had gone for similar price rise in the recent past.
"We are working out the details. We do not intend to pass on the entire production cost to customers, as we would be absorbing a portion of it to remain competitive and price sensitive to our customer base," Swamy said
"Though other automobile firms such as Hyundai, Maruti, and others have jacked up their prices over the months, we were studying the impact of the cost benefits to customers in the light of the reduction on excise and other taxes by the Union Budget for the fiscal year 2003-04," he said.
With a phenomenal 36-40 per cent growth in the automobile sector during the last three months (March-May), the company is confident that the momentum will be maintained during the current fiscal year due to all-round revival in the economy and prospects a better southwest monsoon.
"We are confident that customers would approve of a moderate increase of our flagship model Qualis in the multi-utility vehicle and Corolla in the C segment. As the Camry model in the D segment is a completely imported unit, there is not much scope for further hike," Swamy disclosed.
The price hike is being contemplated primarily to offset the 35-40 per cent increase in steel price, 15-18 per cent in diesel price, and 10-15 per cent in freight costs over the last one year.
Incidentally, the joint venture continues to absorb a substantial cost of importing engines, gear box and transmission lines from its parent company due to high cumulative import tariffs, including the countervailing duty and import surcharge on the basic customs duty.
But the company hopes to substantially reduce the production cost in the next two years when it's joint venture subsidiary (Toyota Kirloskar Auto Parts) at Jigani near Bangalore rolls out its transmission and gear boxes, which are currently imported from its parent company in Japan.
"We are investing about Rs 500 crore (Rs 5 billion) in the venture to produce 165,000 units of transmission boxes from June 2005. The special project is on schedule and trials have commenced," Toyota Kirloskar Vice Chairman Vikram Kirloskar told rediff.com on the sidelines of the launch of its new diesel version of Qualis, branded as Royal Saloon.
"Besides meeting the requirements of our Indian plant, the rest of the entire production will be exported to the parent company's manufacturing plants located worldwide," Kirloskar said.
Meanwhile, Managing Director Atsushi Toyoshima declared that the company was planning to enter the B segment passenger car soon, but no timeframe had been decided.
"We are aware of the rapid growth in the B segment in India and its potential in the coming years. We are conducting a marketing survey to assess customers' requirements and what they are looking for which may not be in the existing models."
"After all, India is a huge market for Toyota as only 0.7 per cent of the one-billion population buy a four-wheeler in a year, accounting for over 700,000 units annually," Toyoshima claimed.
A record growth during the last three months notwithstanding, the company officials have projected that the passenger car segment would grow by 15 per cent during the current year as against 12 per cent growth last year, while the overall automobile industry is set to grow by 8-9 per cent, including the multipurpose vehicles.
During the previous fiscal year (2002-03), the company sold about 26,000 Qualis multi-utility vehicles, taking the total sales since its launch in January 2000 to 88,000.
The sales, however, dipped from 29,000 posted in the fiscal year 2001-02 by about 3,000 due to decline in production when a section of its workers went on a prolonged strike six months ago.
Yet the company claimed that it has a 37 per cent of the market share in the multi-purpose vehicle segment. Its turnover shot up to Rs 1,750 crore (Rs 17.50 billion), which includes proceeds from Corolla and Camry luxury passenger cars, launched during the last fiscal.
The company sold about 2700 Corolla cars since its launch this February in the C segment, and around 550 Camry sedans since its launch in October 2002 in the D segment.
The company is projecting a turnover of Rs 2,770 crore (Rs 27.70 billion) for the current fiscal year (2003-04).It is targeting a sale of 800 units of the newly launched diesel version of Qualis during the current year.