Toyota,Daihatsu to make $5,000 car cheap car for india market may be set a new brand

Toyota,Daihatsu to make $5,000 car cheap car for india market may be set a new brand

October 29th, 2008 — Daihatsu, toyota



Toyota Motor may be looking to take India and other emerging markets by storm with a $5,000 car in the first half of the next decade. However, it could be a tough task for the famously quality-obsessed Japanese automaker to make a dirt-cheap car that doesn’t damage its brand image. Plus, Toyota would face difficulties as a newcomer to the competitive Indian market, where rivals are readying their own low-cost vehicles amid weakening demand as the economy cools.

The Asahi newspaper said Toyota plans to roll out the $5,000 vehicle in the early part of the 2010s under a new brand separate from Toyota, high-end Lexus, and Scion, which targets younger consumers in the United States.

Toyota and Daihatsu declined to comment on the report.

Toyota has so far only disclosed plans for what it calls an “entry family car”, which is scheduled to be produced in India and Brazil from 2010 and 2011, respectively. That car is expected to cost around $8,000, although Toyota has not officially mentioned a price.

The Asahi said Toyota will likely build the $5,000 car in India, with sales also possible in Brazil.

Toyota executives have so far denied any interest in developing an ultra-low-cost car, arguing that selling such a car under the Toyota badge could hurt its brand image.

Engineering a low-end vehicle could be a challenge for Toyota. “Toyota engineers are used to doing the best. But the best isn’t necessary for an emerging-market vehicle, ” said Andrew Phillips, a Tokyo-based analyst for KBC Securities. “It needs to be basic and sturdy. There are all sorts of features that you want to add on, but they add to costs.”