Despite the growing popularity of SUVs in India, Toyota Kirloskar Motor expects hatchbacks to remain relevant in the passenger vehicle market, supported by first-time buyers, customers upgrading from smaller vehicles and households looking for an additional car. The company sees opportunities across urban and rural markets, where purchasing decisions continue to be influenced by affordability, vehicle size and individual requirements. Its updated Glanza is aimed at addressing these customers with changes to styling, convenience and safety equipment.
“India is so diverse, and you see both rural and urban markets. There are still a lot of first-time car buyers, and it is not necessary that all of them are moving towards an SUV,” said Sabari Manohar, Vice President, Sales, Service and Used Cars, Toyota Kirloskar Motor, in an interaction with Autocar Professional. He said hatchbacks continue to have potential despite the increasing preference for SUVs, with customers choosing vehicles according to their budgets and requirements. The same diversity of demand, he added, also supports the sedan segment.
The updated Glanza is priced from Rs 6.99 lakh for the entry-level E grade, while the S and G grades start at Rs 7.71 lakh and Rs 8.73 lakh, respectively. The higher-specification V grade starts at Rs 9.99 lakh, with the V(O) grade topping the range at Rs 10.49 lakh. The pricing gives Toyota a presence across different price points in the premium hatchback segment, where it is seeking to attract new customers as well as existing vehicle owners.
Manohar identified four customer groups contributing to hatchback demand. These include first-time car buyers, customers upgrading from smaller vehicles, buyers aspiring to enter the Toyota brand and existing Toyota owners looking for a second or third car in the family. According to him, the Glanza caters to these different ownership requirements rather than depending entirely on entry-level car buyers.
The demand is spread across different geographical markets, with Manohar pointing to opportunities in Tier 1 and Tier 2 cities alongside rural India. In smaller towns and rural markets, customers continue to consider hatchbacks for their first purchase or as an upgrade from an existing vehicle. Urban households, meanwhile, also purchase smaller cars for everyday mobility, making practicality an important consideration alongside brand and product aspirations.
Compact Cars Expanding Toyota’s Customer Base
For Toyota, smaller vehicles have also helped widen the company’s customer base beyond its traditional SUV and MPV buyers. The brand’s Indian portfolio includes products ranging from the Glanza to larger vehicles such as the Innova Hycross and Land Cruiser. Manohar said the availability of compact cars provides an opportunity for customers who aspire to own a Toyota but may not be considering one of its larger models.
“The first-time car buyer also has an aspiration to buy a Toyota,” Manohar said. He explained that the availability of smaller vehicles, including sub-four-metre models, makes it easier for these customers to enter the brand. Toyota is seeking to build on this initial purchase through its aftersales service network and wider ownership proposition.
Manohar said the company’s service support and associated ownership services are important considerations for customers entering the Toyota brand. He maintained that buyers evaluate the overall ownership experience alongside the vehicle itself, particularly when making their first purchase. However, he declined to disclose the contribution of compact vehicles to Toyota’s overall sales or the proportion of first-time buyers in its customer base.
Glanza Update Focuses on Styling and Convenience
The latest Glanza update reflects Toyota’s efforts to respond to customer feedback through changes in design, equipment and convenience features. Manohar said the exterior revisions include a redesigned front fascia and additional styling elements intended to give the hatchback a sportier appearance. The changes are aimed at customers seeking a more contemporary design while retaining the practicality of a compact vehicle.
Inside, Toyota has focused on connected-car features and convenience equipment, including charging provisions. Manohar also highlighted safety equipment, including six airbags across grades, as part of the product’s proposition. He said the company has sought to address different customer expectations through improvements to styling, comfort and safety.
Toyota has also been responding to demand for CNG vehicles and the convenience of automated manual transmissions. Manohar said demand for CNG had been encouraging, while customers were also seeking greater convenience in everyday driving. He indicated that product improvements are undertaken periodically after evaluating customer feedback and changing requirements.
Toyota-Suzuki Collaboration on Engineering
The Glanza forms part of Toyota’s product collaboration with Suzuki, which extends to engineering and design-related activities. Asked whether the latest design changes were undertaken locally or at facilities in Japan, Manohar said the development process involves engineers working across locations. He described the arrangement as a collaborative effort rather than one in which design responsibilities are confined to a particular market.
“There are projects in which we work together. There are a lot of local engineers involved. The design confirmation happens, and we travel to Japan,” he said. Manohar explained that the companies collaborate on different aspects of product development, with engineering teams participating in the process. He did not specify the extent of local engineering work undertaken for the latest Glanza update.
The Toyota-Suzuki relationship also extends beyond India, with both manufacturers drawing on their respective strengths. Manohar said the partnership has been working well, with the companies complementing each other’s capabilities. Toyota did not disclose the proportion of its Indian sales contributed by alliance products, with Manohar declining to provide model-wise volume details.
Rising Affordability Changing Buyer Preferences
Manohar also pointed to rising affordability and greater awareness of vehicle safety as factors influencing purchasing decisions in India. He said customers are becoming more informed about available technologies and increasingly considering additional features when choosing a vehicle. As a result, first-time buyers may also opt for higher specifications rather than necessarily purchasing an entry-level variant.
“The country is growing, affordability is going up, and customers are much more aware of safety and features,” he said. Manohar cited the growing popularity of advanced driver assistance systems as an example of changing expectations in the passenger vehicle market. He indicated that improving affordability could encourage more buyers to consider vehicles with additional safety and convenience equipment.
On the broader demand environment, Manohar remained positive about the Indian passenger vehicle market, although he acknowledged that external factors and cost pressures continue to influence the industry. He said Toyota is seeking to balance these challenges while responding to opportunities arising from the country’s economic growth. The company did not provide a specific sales growth forecast for the coming months.
While SUVs continue to account for an increasing share of India’s passenger vehicle market, Toyota’s assessment is that hatchbacks will continue to serve customers with different budgets and ownership requirements. The updated Glanza is part of its effort to retain a presence in this category while making the Toyota brand accessible to a wider customer base.