Toyota and Daihatsu want to garner a greater market share in emerging markets including India, Pakistan and Vietnam and to do so the two automakers have join hands to form a new company.
The new company will be established in January next year with Daihatsu handling the operations part of the company. The news comes just months after Toyota acquired 100 per cent stake in Daihatsu to strengthen its small cars portfolio.
Toyota has a huge market share as far as bigger cars are concerned, but in emerging markets where sedans and saloons are not so much in demand Toyota needs smaller cars that will enable it to appeal to budget-conscious consumers in not only India, but also other South-East Asian countries including Vietnam. Daihatsu has already commenced work on Toyota’s compact car for emerging markets and has been known since March.
Daihatsu currently commands nearly 16 per cent share in Indonesia’s passenger car market, where it manufactures Ayla hatchback among other vehicles in a joint venture with Astra International. The company operates a joint venture in Malaysia too, where it has a market share of about 32.5 per cent.
The companies intend to develop Daihatsu into a global brand as they target growing markets for entry-level compact cars, which are becoming smaller and energy efficient due to environmental and traffic concerns. Under the umbrella of the new internal company, Daihatsu will be in charge of development, procurement, and production preparations for compact cars. And as far as production of these vehicles is concerned, the two companies will use existing production sites to manufacture the vehicles.
Shigeki Terashi, Executive Vice President, Toyota, said, “With the establishment of the internal company, Toyota intends to learn the very fundamentals of Daihatsu’s competitiveness and change the way we work.”