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Toyota Yaris – Still a long way to go

December 30, 2020 (MLN): The Auto Sector has been grabbing lots of headlines these days for all the right reasons. Be it the much-needed recovery that came amidst a destructive lockdown, or the impending launch of various models by several major players, the sector is all set to witness the growth that was absent for the past two years.

One of the reasons for this recovery was the performance of the Passenger Car segment, which saw a consistent increase in sales since the upliftment of the lockdown, much of which can be accredited to how well Indus Motor’s latest launch, Toyota Yaris, has been received in the market.

Despite the grave economic situation caused by the outbreak of COVID-19, INDU went ahead with its decision to launch Yaris in March. This was around the same time when the lockdown was imposed, and several companies were forced to shut down their plants to control the outbreak.  

Initially planned to give a competition to competitors’ cars like Honda City and Suzuki Ciaz, the numbers show that Yaris is giving a tough time to all passenger cars in the ‘1300cc and above’ category as it has consistently featured on the top in terms of selling the maximum units.

Besides the fact that Yaris is reasonably priced within the range of Rs. 2.5 to Rs. 2.9 million, several other factors have been prompting people to buy it. For instance, the car has been widely lauded for its unique and distinctive exterior, as well as a good level of interior refinement. Users who switched from cars like Honda City praised Yaris for its excellent features, fuel economy, and driving comfort.

The popularity of Yaris can easily be gauged by the graph above, which shows how it has been ruling the charts for the last three months. The dip in the number of sales between October and November can be somewhat explained by the drop in the sale of total passenger cars, but it has also to do with the performance of the vehicle which will be discussed shortly.

The data also shows how the sale of Honda cars has suffered after the launch of Yaris, as it was barely able to keep up with the performance of the latter. Interestingly, Honda is following an almost opposite trajectory to that of Yaris.

The chart also shows how Suzuki Swift has remained indifferent towards the arrival of Yaris, as its sales have remained consistently low throughout the 5 months. Toyota Corolla, on the other hand, has seen a boost in its sales over the past three months, however, not as high as that of Yaris.

As a percentage of the total sale of passenger cars, Yaris occupied a significant chunk over the past few months, with its sale showing a drastic increase between August and October. Similarly, as a percentage of a total of 1,300cc and above cars, its position has improved a lot between July and October.

However, the only worrisome part is the fact that sales declined substantially during the month of November. As already stated earlier, this can be partially explained by the decline in the overall sale of passenger cars. Nonetheless, the drop in performance has also to do with absence of certain features, for which the company has received some criticism from the purchasers.

Speaking about the overall performance and the feedback of its customers, an anonymous source from the company said that Yaris has been facing issues relating to the development phase. While the situation relating to the lockdown and plant shutdown disrupted the supply, and consequently the sale in November, the source further said that the user’s perception about the car and their failed expectations to have features of Toyota Corolla is what disappointed them to certain extent.

The car has been specifically panned for non-availability of retractable side mirrors, missing mud guards, slightly compact space, non-availability of arm rest in case of two passengers at the back seat, and the low quality General tyres. Moreover, users have complained about wobbling issues at higher speeds.

Despite this, the management seems content with the current performance of the Yaris, as it is generating nearly 50% of the company’s overall sales. According to Intermarket Securities, Yaris sales have outpaced the previous 1,300cc models (Xli and Gli) by c. 2,700 units per month. The 1,500cc Yaris Ativ X (CVT) is the main driver of its sales, roughly 38% of total Yaris sales. Moreover, the volumetric sale of Yaris is likely to remain high in the months to come due to a healthy backlog of orders.

To solve the supply-side issues, the company is currently operating on a double-shift basis and plans to introduce overtime shifts from January 2021 in order to reduce lead times. According to the report, the current production capacity is 66,000 units pa. (double shift), which can be ramped up to 70,000 units pa. with overtime shifts. The company is also planning to add another 14,000 units by the end of FY21, which was initially delayed due to the pandemic.

Copyright Mettis Link News

Posted on: 2020-12-30T15:09:00+05:00

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