Toyota Kirloskar sales decline despite demand for Fortuner, Innova Crysta
With 13,081 units sold in August 2017, Toyota Kirloskar sales decline stands at 9.71 percent for August 2017.
Toyota Kirloskar Motor India domestic market sales stand at 12017 units, and export of Etios series at 1064 units for August 2017, for total sales of 13,081 units. In August 2016, TKM sold 12,801 units in the domestic market and exported 1244 units. Overall (domestic and export) Toyota Kirloskar sales decline for the month stands at 9.71 percent. Fortuner, Innova Crysta continue to bolster strong sales volume a year after launch.
TKM reports 40-50% increase in customer orders in August post the announcement on potential cess hike. Despite high enquiries for Fortuner, Innova Crysta, production constraints means the company is not in a position to cater to increase in demand on short notice. The company reported its best ever sales in July 2017.
N. Raja, Director and Sr. Vice President, Sales & Marketing, Toyota Kirloskar Motor says the months sales numbers are not truly reflective of customer orders. Post potential cess hike increase, customer enquiries and orders rose but production limitations prevented supply. Holidays in August, also meant lesser production days. Current waiting period for Innova is at 6-8 weeks and Fortuner at 10-12 weeks, respectively. Toyota Motor India is trying to reduce waiting period and meet customer needs in the shortest period possible.
Despite Toyota Kirloskar sales decline for August, meeting customer demand means inventory at plant and dealership has considerably reduced at August end. New Fortuner, Innova Crysta continue to boost sales volume leading from the front. The forthcoming festive season will be enveloped in a cloud of cess hike, which could lead to an increase in price and would impact demand.
Demand for hybrid product Camry Hybrid has taken a huge hit owing to applicable tax under GST framework. TKM hopes the Government reinstates preferential (lower) tax rate to boost clean and green tech in hybrids similar to pre GST era, and will help customers choose green vehicles over petrol/diesel vehicles.
Cabinet clearance of Government proposal for an ordinance to increase the State Compensation Cess limit under GST from 15% to 25% on automobiles implies cess increase but clearly increases overall tax burden across vehicle segments. Increase in post GST price from Pre-GST level will negatively impact sales of vehicles in specified segments.
Vehicles that attracted 24% or 27% excise duty in Pre-GST period could now attract higher tax under GST. Tax hike could be as high as 10% in certain cases and could impact Toyota Kirloskar sales decline further.
Toyota Kirloskar Motor (TKM) has been felicitated with the Bureaucracy Today – CSR Excellence Award 2017 in Swachh Bharat Initiatives category for its contribution in the area of Health and Hygiene. It’s CSR campaign – Project ABCD (A Behavioral Change Demonstration) tackles Open Defecation (OD) through sanitation facilities for girl children in schools. The project provides infrastructure support by building sanitation units (near Toyota plant) in Karnataka.
724 sanitation units have been constructed till date. Studies suggest of 1.1 billion people in the world who defecate in the open, 59% live in India. 67% of rural Indian households still do not have access to proper sanitation facilities.