Toyota looking at Daihatsu for help to build affordable cars

Toyota has been not very successful in the affordable segment of cars in the Indian market, yes, we are talking about the Etios and the Liva and now it is proving difficult for them to gain a foothold. The solution? ask Daihatsu for help to design and launch small cars.

Toyota cars are know for their reliability but for this the company uses high quality highly-engineered components which increase the cost of the vehicle and as a result, the competition undercuts Toyota. Suzuki meanwhile sources parts from Indian suppliers which helps keep the price in check. The koreans use a similar model.

Daihatsu Logo

Daihatsu-Logo

This plan to collaborate with Daihatsu, in which it owns 51%, has helped Toyota in the Indonesian market which they hope to replicate here. But instead of launching a new brand, Toyota will sell the vehicles under its own name and dealer network.

The Indian car market is maturing at an astonishing rate and we don’t blame Toyota for wanting a slice of this. The Innova, Fortuner and the Corolla are doing fairly well in their respective segments but they form a small part of the total market which is ruled by affordable small cars.

The Etios, (Ethos) which means spirit, character and ideas in Greek, was conceptualized and brought to life by nearly 2000 engineers. The Etios sedan was launched in December 2010 and the Liva hatch followed six months later. Although it received good initial bookings, complaints from users began to affect the sales numbers soon. The big negative the car had was it did not match what people expected to see in a Toyota.

2014 Toyota Etios front

2014 Toyota Etios front

Toyota also took to the race track with the one-make Etios Motor Racing in 2012. The cars for the races were prepared by Toyota Racing Division (TRD) and Red Rooster Performance together.

Source: Reuters.

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