Toyota derisk drive
Toyota Kirloskar Motor (TKM) is banking on its multiple sourcing strategy to avoid any hit on its supply chain because of the Covid-19 pandemic.
“We have to derisk ourselves by opting for multiple suppliers and we have been following this strategy every since the tsunami earthquake hit Japan in 2011,” Naveen Soni, vice-president (sales and marketing), TKM, said on the sidelines of the launch of the Special Edition of the Innova Crysta in Bangalore on March 17.
“We have opted for local manufacturing and have a localisation of 80 per cent across our vehicles. We do import components such as a special seal and electronic parts. But we have multiple suppliers. Our tier-II and tier-III suppliers are based out of China. But we also have suppliers in Vietnam who have replaced China suppliers,” said Soni.
On the demand side, Soni apprehends an impact because of the virus scare. “Our BS-VI sales will be impacted as dealerships in Maharashtra and Orissa are shut. We can’t avoid that, we have to take a balanced view of the economy as well as safety. We have an interactive digital presence where customers can choose their vehicles, have a 360 degree view of it and check out the features and prices. Of course, the customer will need to feel, touch and drive the car before he makes a decision. For that we are ready with doorstep service,” said the marketing head.
Toyota has completed its transition to BS-VI, including diesel models. The company is only passing on 50 per cent of its BS-VI burden to customers. “We will be raising the prices of our BS-VI vehicles in phases,” said Soni.