Friday, March 6, 2009

Toyotas & Hondas to be Costlier

Reliance on Japanese component imports is making it difficult for Toyota & Honda to handle the hot Indian market conditions. The yen has been getting stronger by the day, making a major price hike imminent on their existing families like Camry, Altis, Innova, Accord, CR-V, Civic, & City. Already hit by slowing sales, there is no chance that the price hikes will be taken kindly by the market. The only hope seems to be new product launches as soon as possible, and both are planning one each by mid 2009. While Honda will pursue a seemingly sensible approach of launching its premium small car Jazz at Rs. 5-6 lakhs, Toyota is all set to pursue the seemingly intriguing strategy of launching the Fortuner SUV at Rs. 16-17 lakhs. Toyota, already the world’s largest carmaker, is more nervous about profit margins; while Honda, only the sixth largest carmaker, is more nervous about garnering market-share needed to overtake #5 Hyundai Kia, #4 Ford, #3 Porsche-Volkswagen, & #2 GM, to reach Toyota. India, with major unit sales, ranks high in the strategy of both automakers.

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