Toyota seems to have found the perfect recipe for a premium SUV and MPV in India. However, despite all its efforts, the carmaker is yet to find a firm footing in mass market segments under the Rs 10 lakh price range. In order to make an impact in this space, Toyota is considering to introduce a premium sedan in the Yaris Ativ to compete with the likes of the Maruti Suzuki Ciaz, Honda City, and the new Hyundai Verna. What is the Yaris Ativ all about and why would Toyota bring the Ativ after comprehensively testing the Vios in India? Let’s contemplate.
The Vios Test
Media first spotted the Toyota Vios sedan undergoing tests in India back in February 2015. There were rumours that Toyota would probably showcase it at the 2016 Auto Expo and follow it up with its market launch. The Vios never appeared at the Expo, and it never made it to Toyota’s Indian showrooms either. The Vios is based on Toyota’s B platform, which is different from the Etios’ EFC platform. But both these platforms are available with the 1.5-litre petrol engine that does duty on the Etios. So it was an educated guess that Toyota had the Vios with the Etios’ 1.4-litre diesel engine on test in India, as this engine is not mounted on this platform anywhere around the globe. It is likely that Toyota, known for its reliability and attention to detail, wanted to ensure that the new engine-platform combination is matched to perfection, hence the long testing schedule.
Testing Vios, Launching Yaris Ativ?
Toyota’s marketing team would have you believe that the Yaris Ativ is a brand-new product. Yes, the nameplate doesn’t have a predecessor. The Yaris Ativ, however, is the same as the current-gen Toyota Vios (the one under test in India) underneath. We believe the B platform with the 1.4-litre diesel engine has passed Toyota’s internal tests and that the manufacturer is in the final stages of launching it in India.
But that doesn’t answer why the Yaris Ativ could be coming and not the Vios
The answer is simple. While both the Ativ and Vios are based on the same platform, the Ativ has a hatchback sibling in the Yaris. In order to achieve the desired economies of scale, Toyota might launch the Yaris hatchback in India at a later date to compete in the premium hatchback segment against the likes of the Maruti Suzuki Baleno, Honda Jazz, Volkswagen Polo, and the Hyundai Elite i20.
In other markets, the B platform, on which the Yaris, Ativ, and Vios are based, is available with the 1.2-litre petrol motor found in the Toyota Etios Liva. Therefore, Toyota wouldn’t have to do much testing on the Yaris hatchback if and when it plans to bring it to India. This engine will also enable the hatchback to fall under the ‘small car’ category to get the tax benefits.
Will the Ativ replace the Etios?
Competitively priced practical sedans like the Toyota Etios, Nissan Sunny, and the Renault Scala have not worked well in India. But sub-compact sedans like the Dzire and premium sedans like the City have. Maruti Suzuki, for example, has had success with both the Ciaz and the Dzire. Even Hyundai has cracked both the segments with the Xcent and the Verna. So the formula seems to be simple, it either has to be a rich, premium sedan around the Rs 10 lakh mark or an aggressively priced sub-4m sedan with a feature list to shame cars from a segment above.
The Ativ is certainly after the cars like the Ciaz, City, and Verna. The Etios, for the time being, should remain in the market to cater to fleet owners and other commercial buyers. Both these cars might coexist just fine.
Pricing the Ativ right would be crucial for Toyota because that will have to be its primary selling point, and Toyota would want to churn volumes with this model to lay a solid foundation in the mass market space. Toyota might be able to achieve that considering that the Ativ might not be as big as the Ciaz and may not feature as extensive an equipment list as the City or the Verna. Toyota already has the engines in India, so the initial investment will most likely be reserved for localising parts and platform.
At Rs 7.76 lakh (ex-showroom Delhi), the Ciaz is almost Rs 1 lakh more expensive than the Platinum Etios. So Toyota has enough room to separate the Etios and the Ativ, and still undercut the Ciaz on entry-level price. We won’t be surprised if Toyota brings it at an entry price of Rs 7.49 lakh, and it won’t be too aggressive in our books.
Just an aggressive starting price won’t take the Ativ a long way against the formidable opposition it’s up against. It will have to have a USP, and that could be the CVT paired with the petrol engine. What will also matter is how smartly Toyota prices the more equipped variants with or without the automatic transmission. In all, it appears that there’s a lot at stake for Toyota with the Ativ. Therefore, the carmaker is taking its time to take the big decision.
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