Toyota’s Daihatsu tasked with low cost cars for India?

Toyota’s budget cars in India, the Liva hatchback and the Etios sedan, are steadily slipping with the advent of newer competition. The Japanese automaker is said to be in the process of doing a full rethink of its strategy for the Indian budget car market. Daihatsu, Japan’s oldest car maker and now a Toyota subsidiary, could be enlisted by Toyota to develop budget cars for India.

Daihatsu Ayla X Track Concept Pic
Daihatsu Ayla X Track Concept used as an illustration

 

Daihatsu is a small car and mini SUV specialist, which does not currently operate in India but that has significant interests in South East Asia and its home market of Japan. The automaker is currently taking stock of why the Etios and Liva have been far from inspiring, in terms of sales. The automaker has not yet officially revealed plans of building Etios/Liva successors.

Notably, Toyota plans to discontinue the Etios from the Brazilian car market from 2016. The Etios platform might make way for an all-new low cost platform, perhaps underpinned by Toyota’s New Generation Architecture (TNGA). The successors of the Etios and Liva cars are expected to be much more sharply styled and with better interior detailing.

Daihatsu Ayla Concept Photo
Daihatsu Ayla Concept used as an illustration

 

For now, Toyota is mum about the prospects of the Etios and the Liva, considering the fact that both cars are still on sale in markets such as India, Brazil and South Africa. If Toyota can successfully tap into Daihatsu’s expertise for not just cars, but also compact SUVs, the Japanese giant will be at a much more comfortable space, as far as the Indian market is concerned.

Using Daihatsu’s small car and compact SUV expertise will bring two major advantages for Toyota in India.

  1. The Japanese automaker will have a ready range of small cars and mini SUVs to pick and choose from for the Indian car market. Development costs can be kept at a minimum.
  2. The automaker will be able to use the Toyota brand for premium vehicles such as the Innova, Corolla Altis and the Fortuner, keeping the Daihatsu brand for low cost offerings.

Whatever be the case, India’s budget car market is too large to ignore for a mass market car maker such as Toyota, whose spurs have been earned on the back of big volume cars and utility vehicles such as the Corolla, Camry and the Hilux. Currently, a world leader in terms of sales, Toyota needs to crack the Indian budget car market in order to maintain its global dominance.

Via Reuters