How automakers address the sedan question in India is particularly interesting. It doesn’t involve increasing legroom or wheelbase. It doesn’t involve creating a reason to increase the average transaction price of those cars. And despite India having some of the deadliest roads in the world, it doesn’t involve safety.
In India, most automakers go in the exact opposite direction with their sedans — by building them shorter and cheaper, but no more safer — yet they remain just as comfortable inside as the models on which they’re based.
Little known to many, Toyota’s first venture out of their home country was in Brazil. Over 50 years ago, they built factory here in which they manufactured a version of their Land Cruiser, called it Bandeirante and kept on building it, unchanged, for almost four decades. When the Brazilian market opened up (ever so slightly) in the 90s, Toyota was relatively quick and soon had a second factory in which they built their Corolla. That was it. Until the Etios arrived.
Convinced by recent policy changes in Brazil that make the life of a car importer miserable unless factories are built on Brazilian soil, Toyota built a new plant near Sao Paulo, and started to crank out its BRIC-car, the Etios. The Etios was originally launched in the eye of BRIC, in India. Now, the car comes to the B. In Brazil, the Etios is aimed at the very heart of the market, the compact car. It already causes heart palpitations.
Last month, Toyota invited the Japanese press to join them for “the opening ceremony for its new plant in Brazil on August 9,” a three day event in and around Sao Paulo. The excitement lowered considerably as the Fourth Estate ventured to the bottom of the invitation. There it said that “flight costs to and from Brazil and all accommodation costs will need to be covered by participants themselves.” That’s Toyota as we know and love it. If you have dreams of lavish press jaunts, don’t dream them in Japan. The event happened yesterday, without yours truly. The Nikkei [sub] hopefully sent its local stringer, and it reports what we know anyway: “Toyota Motor Corp. will kick off production of a strategic small car aimed at the emerging-market middle class next month at a new plant in Brazil.” And the new car is the Etios.
While the discussion about the value of the yen continues (also at TTAC), the exodus from Japan is picking up steam. Toyota is joining other carmakers that quietly turn India into a car export nation to be reckoned with. Toyota’s Chief Engineer Yoshinori Noritake (above) soon will be able to smile: Toyota’s subsidiary in India will export Toyota’s and Noritake’s “BRIC car”, the Etios, to South Africa in March 2012.
At the times of the Beijing Olympics in 2008, Toyota proudly stood on the podium of the Chinese sales winners, along with Volkswagen and GM. Ever since, Toyota received the wrong fortune cookies in China: Its market share deteriorated steadily, down to half of its 2008 high. Toyota now is on an all-out offensive to re-gain lost ground, with promising success.
Toyota is working on a small car based on its emerging market platform that underpins the Indian Etios, and will release it in China by 2013 – if The Nikkei [sub] is correctly informed. There is nobody working at Toyota on Thursdays and Fridays as a power saving measure, so there is nobody to ask. We expect no more than the usual “we cannot comment on future models” when people will be back to work on Saturday. With that in mind, let’s go down rumor lane.
On December 1, a B-sized sedan went on sale in India without a single car in the showroom. It is called the Etios, it is made by Toyota, and sight unseen, it already received 12,000 pre-orders as of today. Production of the Etios will start on December 20 in Toyota’s factory near Bangalore, India. Boring story so far?
While in Toyko for the rest of the year, I had a chance today to talk to Toyota’s lead engineer of the Etios, Yoshinori Noritake. And a much bigger story emerged: Toyota is engineering and building new cars, made for the special demands and targeted at the world’s new growth markets. Developed markets may not apply.
Noritake is a soft-spoken, humble man.
Business Week reports that Toyota are planning to capture 10% of the Indian market. “India will play a pivotal role in Toyota’s global expansion plans,” Vice Chairman Kazuo Okamoto said today at the Delhi Auto Show. “The time has come for us to strategically accelerate our growth here.” Toyota is using the Delhi Auto show to showcase the cars which will lead the assault for 10% of the Indian market, the most important of which is Toyota Etios (which will also be produced in Brazil). Autocar.co.uk reports that Etios is 90% production ready and that it will go on sale in India at the end of 2010 (with first-year sales projected at 70k units). Because of the price (around $10000) it’ll go head to head with the Maruti Swift, the very boys who hold a huge chunk of the Indian car market. To help combat Maruti, a larger and better quality interior is key to the Etios. Autocar also reports that in order to keep costs under control, Toyota went on a cost cutting exercise. Measures taken include, limited sound proofing, a hard, but durable, interior and one windscreen wiper. But before you cry “Toyota are turning into GM”, don’t be fooled. Toyota tried the same thing with the Aygo in Europe and the end result was a good car which sells very well.