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Toyota Doubles Down Its Hybrid Bet In India

Toyota Doubles Down Its Hybrid Bet In India.

Toyota is rebooting its strategy for India, doubling down on a bet that emerging markets will learn to love its hybrids as long as the price is right.

Renowned for its pioneering Prius, the Japanese carmaker has struggled to sell large numbers of its hybrid Camry sedan since its Indian debut in 2013, partly due to a sticker price of more than eight times the annual income of a middle-class family.

This time, Toyota is determined to do it differently with lower-cost hybrids, said four company and industry executives and suppliers who provided previously unreported details about the carmaker’s sourcing, production and pricing strategy.

Central to the strategy is a drive to cut the cost of full hybrid powertrains by making them in India, where the automaker’s factories are running well below capacity, and to source key materials within the country. Also Read, NBA Eric Paschall signs a two-way deal with Timberwolves

Toyota Motor is also leveraging its cooperation with partner Suzuki Motor, the majority owner of India’s biggest carmaker Maruti, to benefit from its low-cost engineering know-how and mild hybrid technology.

” The hybrid bet is a turning point. It will be a litmus test for Toyota’s future and success in India,” one person with direct knowledge of Toyota’s plans told Reuters.

A full hybrid can be driven for stretches on electric power, whereas mild hybrid technology only supplements the combustion engine to help cut emissions.

However, mild hybrids have smaller batteries and cost far less. Also Read, About Gold Line Company seller of gold and silver coins

Toyota Doubles Down Its Hybrid Bet In India

Toyota GR Corolla all-wheel drive, and 300 hp
Toyota Doubles Down Its Hybrid Bet In India Toyota Doubles Down Its Hybrid Bet In India

Toyota Doubles Down Its Hybrid Bet In India

Toyota’s Indian strategy is at odds with global rivals Volkswagen, General Motors and India’s Tata Motors, which are rushing to roll out pure electric vehicles (EVs). It comes in the face of criticism from investors for sticking with fossil-fuel hybrids.

Hybrids are generally cheaper than EVs as they typically have smaller batteries and are not reliant on charging stations. These are essential factors in markets such as India, where customers are price sensitive and charging infrastructure can be patchy.

Toyota declined to share details about cost savings, future product launches, car pricing strategies or production plans for India’s full or mild hybrid models. Also Read, Fox And Verizon New Multi-Year Distribution Deal That Adds Fox Weather And Tubi

The world’s biggest automaker told Reuters it wanted more first-time buyers in India to own full hybrids as the first step towards mass electrification. It would continue to increase local sourcing and production to be competitive.

Learning To Love Mild Toyota’s first new hybrid to hit India’s roads will be the Urban Cruiser Hyryder, a compact sports-utility vehicle (SUV) which two people with knowledge of the plan said is likely to be priced around $25,000 – less than half the price of the Camry.

That would pit it against popular midsize combustion-engine SUVs made by Hyundai Motor and Kia Motor in a fast-growing segment that makes up 18% of car sales in India, the world’s fourth-biggest auto market.

Toyota Doubles Down Its Hybrid Bet In India
Toyota Doubles Down Its Hybrid Bet In India Toyota Doubles Down Its Hybrid Bet In India

The full hybrid Hyryder, however, will be 31% more fuel efficient than the Hyundai and Kia diesel models, offering an economy of 28 km per litre (65 miles per gallon), a key metric for Indian buyers.

To bring down the cost of the Hyryder, which Toyota and Suzuki will sell, it will use a hybrid system developed initially for subcompact cars, or one size smaller, according to a Toyota engineer familiar with hybrid technology.

By combining the hybrid system with some upper body and low-cost chassis parts from Suzuki, the result is an SUV on par with or slightly cheaper than the Prius sedan, which starts at $25,000 in the United States.

“The high-cost complexity of hybrids is hard to overcome, but it’s a good start,” the Toyota source, who was not involved in the Hyryder’s development, said. Also Read, German insurance company Allianz on Friday posted a 23% fall in second-quarter net profit

Savings have also come from working with Suzuki on developing the SUV and designing, as well as leveraging the scale and pricing power with suppliers of Maruti, which produced eight of the ten best-selling models in India in 2021.

There is a cost differential of $3,400 between Toyota’s full hybrid and its comparable gasoline car in India, said another source, higher than the typical differential of about $2,000 for Toyota in most countries.

To boost sales in India’s price-sensitive market, Toyota will also sell Hyryders with a mild hybrid powertrain supplied by Suzuki, a significant departure for Toyota, which has long championed full hybrids.

The shift is a recognition that Toyota has been unable to bring down the cost of full hybrids to the point where they can always compete on price in markets such as India, the people familiar with Toyota’s planning said.

It also shows how Toyota is altering its strategy for different markets, depending on what buyers want and are willing to pay. Also Read, All You Want To Know About FTX NFT Marketplace 2022

Toyota Doubles Down Its Hybrid Bet In India
Toyota Doubles Down Its Hybrid Bet In India Toyota Doubles Down Its Hybrid Bet In India

“As we come down the price points … we hope to increase our numbers as well as our market share,” Vikram Kirloskar, vice chairman of Toyota Kirloskar Motor, the Japanese company’s Indian unit, told Reuters.

The Japanese manufacturer follows a different strategy than its global rivals, such as Volkswagen, as it wants to make the most out of the hybrid technology before switching to electric vehicles in the coming years.

This is partly because the hybrids are cheaper than EVs and do not need a dedicated infrastructure to make them work.

Toyota wanted more first-time car buyers in India to purchase total hybrid vehicles as the first step towards electrification in volumes.

To achieve that, it is aware of seeking local sources to make the products competitive.

The brand will introduce Urban Cruiser Hyryder next month in India and will boast an all-new 1.5-litre four-cylinder TNGA Atkinson Cycle petrol engine forming a solid hybrid system.

It will also be powered by the 1.5-litre four-cylinder K15C mild-hybrid petrol engine sourced from Maruti Suzuki.

The extensively used powertrain produces a maximum power output of 103 PS and 136 Nm peak torque. Also Read, United Kingdom Banks cut mortgage offers amid the economic panic

Toyota will also sell the five-seater midsize SUV with an all-wheel-drive configuration. It will be offered in an extensive range, with the hybrid variants costing around Rs. 20 lakh at the top end.

The robust hybrid tech-equipped Toyota Hyryder will be 31 per cent more fuel efficient than the diesel-powered Hyundai and Hyundai models, with a fuel economy of around 28 kmpl.

The report further noted that the next hybrid powertrain for India will come courtesy of a new MPV, which is expected to launch later this calendar year or early 2023.

It coincides with the speculations that the new-generation Innova, likely dubbed the Innova HyCross or Innova Zenix, would go on sale in the coming months in India.

It could feature a diesel hybrid engine with more excellent performance and improved fuel efficiency. The new-gen Innova will likely sit on a modular monocoque chassis.

Also Read, SBI Q1 Net profit of Rs 6,068 crore, misses out on estimates

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