The entry of Toyota, the world's biggest carmaker, into the Indian entry-level sedan market has sent carmakers scrambling to work out fresh plans for the hitherto neglected sedan segment.
While Toyota will be launching the Etios on Wednesday, another Japanese major Nissan has also said it is readying a new sedan, based on a completely new platform for the Indian market for launch next year.
What has set the cat among the pigeons is Toyota's aggressive pricing strategy, clearly aimed at garnering volumes.
Toyota Kirloskar Motors (TKM), Toyota's India joint venture which will be manufacturing the Etios, has said the car will be priced at Rs 5.25 lakh for the base variant.
This will pitch it head on against Maruti Suzuki, which dominates the entry sedan segment with its Swift DZire, and Tata Motors' Indigo and Indigo CS variants. Ford is the only other player with a model in similar price range. But its outdated Ikon model has been steadily losing marketshare, as has Hyundai's Accent. Maruti Suzuki, phased out the bestselling Esteem a few years ago.
TKM has invested Rs 3,200 crore on a new manufacturing plant near Bangalore, with an annual capacity of 70,000 units, keeping in mind this new model.
Considered to be one of the most ambitious projects from Toyota, this car, which has a 1500 cc petrol engine, will face plenty of competition.
Apart from existing models like Maruti Swift D'Zire, Hyundai Accent, Tata Indigo, Tata Manza and the Ford Ikon, Volkswagen has also launched the Vento, which has base variants which are comparably priced.
Market watchers feel that Etios' lucrative price has already started troubling other auto makers as it is also likely to affect the market share of hatchbacks within the same price range, such as Hyundai i20, Maruti Swift, Ford Figo and Volkswagen's Polo.
"We are very excited about the launch. We are sure the customers will be very happy. Reviews are very good and we expect it will be a game changer in the entry level sedan market," said Sandeep Singh, deputy managing director (marketing), TKM. Singh, however, declined to comment on the price.
"The exact price of the car will be announced only on December 1. Before that we do not want comment on price. Just wait for the launch," he said.