Toyota & Daihatsu To Set Up New Company To Make Cars For Emerging Markets

Toyota Motor Corp recently announced it will create a joint internal company with Daihatsu to develop compact vehicles for emerging markets such as India, Pakistan, and Vietnam. With its sight set on expansion of market share in other Asian markets, the Japanese automaker intends to establish the new company in January 2017, whose operations will be spearheaded by Daihatsu, a development we told you about earlier this year.

Toyota acquired 100 per cent stake in Daihatsu earlier this year to strengthen its small car portfolio among other reasons. Speaking to NDTV in February, Kyoichi Tanada, CEO, Asia, Middle East, and North Africa, Toyota Motor Corp had said, "We have to proceed with better and more passenger cars. So we have to take advantage of Daihatsu to meet with the requirements of not only India, but the other South East Asian countries, or other emerging countries." In fact, Daihatsu has commenced work on Toyota's compact car for emerging markets, something we revealed exclusively in March this year.

Daihatsu Agya

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."