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.
The Japanese automaker, known for its ground-breaking Prius, has had trouble moving many of its hybrid Camry sedans since they made their Indian debut in 2013, in part because the asking price is more than eight times the yearly 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.
The goal of the approach is to manufacture whole hybrid powertrains in India, where the automaker’s factories are currently operating at considerably below capacity, and to obtain essential components from within the nation.
Toyota Motor is also making use of its partnership with Suzuki Motor, the main owner of Maruti, the largest automaker in India, to gain access to its mild hybrid technology and low-cost technical know-how.
“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.
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Since electric vehicles are on the higher side of the price chart, Toyota is seeing hybrids as an
Since electric vehicles are on the higher side of the price chart, Toyota is seeing hybrids as an opportunity to get its foothold right in the country as it observes that this technology will benefit the Indian consumers who are sensitive to price. The cost of hybrid vehicles is far less compared to EVs. The current charging infrastructure of the country is also yet to be fully developed and since hybrid models do not need charging, these models can help consumers to move toward the transition that the auto industry is undergoing.
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