Why Has Toyota Stopped Selling Etios and Corolla in India?

As of August 2023, Toyota has discontinued the popular Etios and Corolla models in the Indian market. This decision reflects a broader trend in the automotive industry where manufacturers are adapting to changing consumer preferences and market demands. Let us delve deeper into the key factors that have led to this strategic shift.

Changing Consumer Preferences

Significant Shift Towards SUVs and Crossovers: In recent years, there has been a noticeable change in consumer preferences towards SUVs and crossovers in India. According to industry reports, this trend has resulted in a decline in demand for traditional sedan models such as the Etios and Corolla. The growing appeal of spacious, off-road capable vehicles has shifted the focus of many consumers towards these new segments. As a result, Toyota has had to reassess its product lineup to better align with current market trends.

Focus on More Profitable Models

Strategic Realignment of Resources: To maintain profitability and efficiency, Toyota has decided to concentrate on models that are more popular and profitable in the Indian market. Products such as the Innova and Fortuner have gained significant popularity due to their robust build and practicality. By focusing on these models, Toyota aims to optimize production processes and maximize its financial returns. This strategic realignment is crucial for sustaining business operations and ensuring long-term growth.

Production and Cost Efficiency

Cost-Effectiveness of Current Offerings: Continuing to produce low-demand models like the Etios and Corolla may not be cost-effective. Maintaining a diverse range of cars, which are not selling well, can strain the company's resources and impact profitability. By streamlining its offerings, Toyota can focus on high-demand and cost-effective production processes, thereby reducing overall costs. This approach allows the company to allocate resources more efficiently and improve overall efficiency.

Market Strategy and Future Visions

Nurturing Future Technologies: As the automotive industry transitions towards hybrid and electric vehicles, Toyota is likely realigning its strategy to focus on these more promising segments. By discontinuing models like the Etios and Corolla, which have lower sales volumes and are less aligned with future trends, Toyota can allocate resources towards developing and marketing hybrid and electric vehicles. This shift reflects the broader industry trend and ensures that Toyota remains competitive in the long term.

Cost Considerations and BS6 Norms: Upgrading the engines of the Etios and Corolla to meet the stringent BS 6 emission norms would have been an expensive and impractical solution. The costs associated with such upgrades would have resulted in significant price hikes, potentially driving these models out of the price range of many Indian consumers. Therefore, discontinuing these models was seen as a more business-savvy decision, given the low sales volumes.

Conclusion

In conclusion, Toyota's decision to discontinue the Etios and Corolla models in India is a strategic move that aligns with broader market trends and future technological advancements. By focusing on more profitable and in-demand models, Toyota aims to enhance its market position and ensure long-term success in an ever-evolving automotive landscape.

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