Toyota is rethinking its approach to India and doubling down on the wager that, given the right price, emerging countries will come to love its hybrid vehicles.
The Japanese automaker, known for its ground-breaking Prius, has had trouble moving many of its hybrid Camry sedans since they made their Indian debut in 2013, in part because the asking price is more than eight times the yearly income of a middle-class family.
Toyota is resolved to approach the hybrid market differently this time around with less expensive models, according to four business and industry officials and suppliers who shared previously undisclosed information on the automaker's sourcing, production, and price strategies. Toyota's strategy in India contrasts with that of its international competitors Volkswagen, General Motors, and India's Tata Motors, all of which are rushing to introduce pure electric vehicles (EVs), and it faces criticism from investors for continuing to produce hybrids that use fossil fuels.
Due to their smaller batteries and lack of dependence on charging stations, hybrids are typically less expensive than EVs. This is crucial in markets like India where consumers are price conscious and the charging infrastructure can be patchy. The Urban Cruiser Hyryder, a compact sports-utility vehicle (SUV), will be Toyota's first new hybrid to enter India's market. According to two people familiar with the plan, the Urban Cruiser Hyryder will likely cost around $25,000, which is less than half the price of the Camry.
That would put it in competition with well-liked midsize combustion-engine SUVs produced by Hyundai Motor and Kia Motor in a rapidly expanding market that accounts for 18% of vehicle sales in India, the fourth-largest auto market in the world.