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Toyota to Enter Minicar Market in Japan

Goal is to sell 60,000 cars annually

In a collaboration with its Daihatsu unit, Toyota Motor said on Sept. 28 it will enter Japan's competitive mini-car market. Small car specialist Daihatsu will supply Toyota three "mini-vehicle" models, with the first due to be available from autumn 2011.

The vehicles will be the first such models to carry a Toyota badge, and the auto giant is aiming for 60,000 sales annually in market that accounts for nearly one third of all new vehicle registrations in Japan each year.

By procuring diminutive models from Daihatsu and selling them under its own nameplate, Toyota is set to broaden its product line, while Daihatsu will expand its sales network and ensure stable production.

Toyota said the move was made in response to increased consumer demand for such cars, adding it would continue to focus on full size models. "The ratio of the mini-car market is growing year by year and our customers are requesting mini-vehicles," said Yoichiro Ichimaru, vice president of Toyota, at a Tokyo press conference.

Mini-vehicles are much cheaper to run than regular autos in Japan, with lower road tax and engines that are no bigger than 660 cc.

Like their global counterparts Japan's automakers have staged a recovery from the lows hit in the financial crisis that forced them to scale back production and slash thousands of jobs. But the expiration this month of subsidies and tax breaks that helped support the market through the crisis has prompted fears that the industry may face a another slowdown towards the end of the year, prompting the search for further growth opportunities.

Asked if Toyota's small car alliance with Daihatsu will expand overseas, Ichimaru said: "We have already been cooperating with Daihatsu chiefly in Asia. There is no doubt that we will strengthen it further."

Both companies said they would also discuss further collaboration using Toyota's hybrid and electric vehicle technology, with products and technologies to be decided by 2011.

"We want to strengthen our production lineup and reform our management to achieve a closer synergy effect from this cooperation," said Koichi Ina, president of Daihatsu. "We regard this as a big advantage."

Copyright Agence France-Presse, 2010

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