The car economy is on a sale downturn for the past few years, caused by the harsh recession blow. Established auto firms in India are struggling to achieve net desired sales, the consequences are so enormous that Toyota and other car makers have deferred price rise in April.
Price hike has become a common episode; in the events of unfavorable sales, and company usually increase their price outputs by about 1 to 3%, at beginning of financial year to cause an upward sale effect. In March 2014, Toyota along with Renault, Tata Motors, Mahindra, Hyundai and Maruti, decided to increase their prices. Honda Cars India had already increased the cost of its new City, and no other firm followed suit.
It is interesting to learn that Toyota has not adopted the price hike strategy, despite the recent series of labor strikes; other companies too have not taken price rise measure into consideration. Under the current constraint economy circumstances, it does come across as a risk. Industry analysts have stated that it is a costly affair for auto companies to raise their prices. The director general of (SIAM) Society of Indian Automobile Manufacturers, Vishnu Mathur stated that the current price structure of Toyota does pose risks with the current state of low buying powers, but price rise of no help to the fragile sale situation.
He also went on to say the sale scenario in 2013 was most hectic, and the effect was so adverse that it was difficult to predict if there would be an improvement in sales. The growth output during the earlier fiscal was about 3 to 5%; during the 2012-2013 financial period and later the sale dip was 6%.
Toyota, along with Mahindra, Hyundai Motor India and Maruti Suzuki stated that they are not keen to increase their prices. The Indian Government brought about a new excise duty policy, where excise duty costs on vehicles will be reduced. This new regulation came about in Feb 2014, and since then auto firms have lowered their prices.
The news of lower excise duty comes as good news to auto firms, but it was brought in rather late, when auto firms have reached a peak turmoil phase. Companies had to suffer massive losses of Rs 600 crore, all lost in inventory costs. The market scenario in India has not shown much improvement, and Toyota and other auto companies have not felt adequate rise in demand due to reduced prices. As mentioned earlier Toyota had to face the grave effects of low sale outputs, with intensive labor strike, that has lowered the production output of the firm. There are however new launches to look forward to, which are Etios Cross and new Corolla Altis.
Etios Cross is a cross version of Liva hatch, and the cross nature is highlighted by the presence of body clads. This is an interesting upcoming car to look forward to because not always, one would hear of Crossover launch. The expected launch date is May, which is barely a month away, and new Corolla Altis is packed with excitement as well, and is more premium and bigger than the earlier model.
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I am into the auto blogs field for quite a long time. Living my passion of reviewing cars.
Tagged: Toyota Cars
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