Is the 'Rhythm' correct?

When Toyota launched the Etios, there was a little speculation from the market about its positioning. But clearly the problem of dissonance in brand positioning was visible. The postioning of Corolla Altis and Camry in their respective segments are at a premium. Corolla is targeted against Honda City and Camry fights with Volkswagen Passat, Volvo S60 & Honda Accord.

Etios is placed in the entry level sedan segment where it is intended to grab share from Swift Dzire and Tata Manza. The other miniscule players in this segment are Verito from Mahindra and Indigo(CS). Inspite of Dzire and Manza having space premium, they are positioned in a way to attract customers in personal segment. Tata clearly has distinguished the Indigo brand from Manza in this context once Indigo was beginning to gain popularity among fleet owners. This is where Mahindra’s Verito lagged since the Logan days.

This situation is not new to Toyota too. Right from the Qualis days, the company had issues in positioning. Little did Qualis attract the personal segment since its launch? When Innova came in, though it was positioned as a MUV, it was priced at a premium and 50% of the sales came from top-end variant. Also every second vehicle sold was to customers with personal usage.

Now Etios having a great demand in the fleet operating segment, brand Toyota is again at a risk of getting diluted as a taxi brand. A repeat of Qualis is likely. What are the potential reasons for such a situation again with Toyota?

1. With such a premium in the Indian market Toyota wanted to gain share by entering into the mass market.
2. But, on the contradictory, Toyota in India was seen as an aspirational brand. Initially the thrill of owning a Toyota without burning the wallet saw the brand ‘Etios’ gain popularity. Over a period of time, this may make the brand look ordinary that anybody can own a Toyota placing it amongst Maruti and Tata.
3. The product was rightly designed to meet the need of cab operators thus leading to bulk fleet bookings.

So what? Isn’t it good for the company when it decides to play in the mass market? More volumes mean more business and more profits. So where is the problem?

This is a high risk situation for the Corolla and Camry. Will they continue to enjoy their premium? 

The dissonance will be answered by customers in the time to come.