Toyota is looking to emerging markets for growth, targeting 50 percent of its global vehicle sales in such countries by 2015 and rolling out eight compact models over the next few years.
However, Toyota Motor Corp executive vice president Yukitoshi Funo said yesterday the company would not try to compete with supercheap models that are increasingly plentiful in developing nations.
He told reporters Asia is a “second motherland” for Toyota, where it would boost research and development as well as production of auto parts.
Toyota already sells more than 3 million vehicles a year in emerging markets, accounting for 45 percent of its global sales of 7.1 million vehicles.
Japan’s top automaker is aiming to add another 1 million vehicles in annual sales from emerging markets with the eight models, starting with the Etios sedan that went on sale in India in 2010.
Yesterday, Toyota said it had reached a “milestone” of 100,000 cumulative sales of Etios cars, which are all made in India.
Toyota built its reputation with fuel-efficient small cars and the demand for affordable compacts could prove a boon for the company.
The compacts in the works will be smaller than the Corolla and likely sell for about ￥1 million (US$12,000), but Toyota said it would not try to compete with models selling for half that price.
“To think cheap cars will sell in emerging markets is a big mistake,” Funo said. “Cars are symbols of family pride. They are for driving to a picnic on a day off.”
Meanwhile, 81 percent of the parts used in Toyota vehicles manufactured in Thailand are now made in Thailand, while the rate is 75 percent for those manufactured in Indonesia.
Toyota hopes to raise the use of locally made parts in emerging markets to close to 100 percent over the next few years, it said.
Using locally made parts is the key to cutting costs.
“Seeing ourselves as a Toyota belonging in each country will lead to growth,” Funo said. “We become insiders.”