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India’s Small Car Market Liva from Toyota | Liva blank for Toyota

The automobile war in India is heatingup. The newest car on the road is the Liva from Toyota, the world’s largest automobile company. Based on Toyota’s Etios sedan platform, the Liva hatchback is the automaker’s first entry into India’s small car segment. The Etios sedan was also designed with the Indian customer in mind. Toyota knows that if it can establish itself in India — the second-fastest growing auto market in the world — then it will be in a winning position on the global track.

The Japanese carmaker, which has been present in India since 1997 and has models like the Innova, Corolla Altis, Fortuner and others, has set up its second plant in India to manufacture the Etios and the Liva. Talking recently to the daily Business Standard, Sandeep Singh, deputy managing director of Toyota Kirloskar Motor (TKM, the joint venture between Toyota and India’s Kirloskar group), noted: “The [Etios and Liva] will help us gain critical mass in India.” Managing director of TKM, Hiroshi Nakagawa, added: “In the saturated markets of the U.S. and Japan, we have less room to grow.”

Toyota is not alone in looking at India to drive its growth. Practically every major auto company is moving in the same direction — and their sweet spot is the small car segment. Recent launches include the Figo from Ford, the Polo from Volkswagen, the i10 from Hyundai, the Beat from Chevrolet and the Spark from General Motors. More are expected to hit the road soon, including new entries from Maruti Suzuki, India’s largest car manufacturer, which already has seven models of compact cars in its stable.

According to Sandeepan Banerjee, senior manager of corporate strategy at automotive manufacturer Mahindra & Mahindra, “If one looks at the demographics of India and the per capita income distribution, it is very clear that the automotive demand in the country is going to be very high. At the same time, the majority of the population cannot afford a sedan. So the huge opportunity is in the small car segment.”

According to a forecast by the Society of Indian Automobile Manufacturers, India’s passenger car segment is expected to see 16% to18% growth in 2011-2012 over the previous year. With growth either stagnant or in the low single digits in many of the global markets, India is clearly an important destination. Nearly 75% of total passenger car sales in India are in the small car segment.

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