The Japanese auto major, Toyota Motor Corporation declared a fall in its net profit by 31% for the year ending March 2012 which was quite unexpected considering the fact that the company had a very rough year with the tsunami and earthquake in Japan and massive floods in Thailand playing havoc to production schedules. Prior to that, Toyota had announced a major recall case of over 10 million vehicles which also gave a huge blow to the “reliability” image of the company, finally resulting in losing the Number 1 position to General Motors.
Toyota has deftly managed to survive all these turmoils and is now again racing to the top position. A huge jump in production volumes and a 168% jump in profits indicate this. But none of the automotive analysts are pointing this recovery to be because of Toyota’s grasp of the Indian small car market. Sadly, this is true. Toyota is well planted in the mid-range utility vehicles with the Innova ruling by a huge margin.
The same story goes for the luxury SUV segment with the Toyota Fotruner selling about 11,000 units compared to 2242 units of the Ford Endeavour and 2016 units of the BMW X1 in 2012. However, if Toyota has to increase its foothold in the Indian market, it has to increase its presence in the small car market which account for 88% of all passenger cars sold in India. Toyota will also need to produce its entire range locally to boost sales rather than relying on imports in knocked-down form keeping prices in check and launch more models at intervals.