Toyota Liva

Toyota Liva

Toyota may trigger a price war in the hatchback segment when it launches its first small car in India on June 27. The allnew Toyota Liva is expected to start at just over Rs 4 lakh and the top-end version, complete with multiple airbags and anti-lock braking system, will be priced around Rs 5.5-6 lakh, said a company executive.

This will make the 1.2-litre car from the world's top carmaker cheaper than most hatchbacks, the fastest-growing segment in the 2.5-million Indian passenger car market, and force rivals to consider price cuts. The prices of hatchbacks such as market leader Maruti Swift, Hyundai i20, Volkswagen Polo, Nissan Micra, Skoda Fabia and Fiat Punto start from Rs 4.3 lakh and go over Rs 8 lakh for different variants. "Prices are the first phase of the competition," says PricewaterhouseCoopers Auto Practice Leader Abdul Majeed.

He says price reductions will happen as the Indian market gets crowded. "These Price wars would excite the customers and potentially help many to upgrade to bigger cars." Honda Siel Cars on Monday signaled a price war in the sedan segment by cutting the prices of its flagship City by up to Rs 66,000 to take on the challenge from recently launched Hyundai Verna and new segment leader Volkswagen Vento. Honda's City lost its leadership in the mid-size cars segment to Vento.

Honda too plans to launch its small car, Honda Brio, this year and the company will be under pressure to price it competitively vis-a-vis Toyota Etios Liva. Honda is also expected to cut the prices of its Jazz hatchback, which is priced much higher than competing models, to make it more attractive for Indian customers. Other companies may follow a similar route.Without confirming the Liva prices, Toyota Kirloskar Motor Deputy MD (Marketing) Sandeep Singh told ET, "We will launch the car at the most competitive price and like its sedan sibling Etios. It's an all-new car, offering huge value for money to Indian customers."