Toyota’s Daihatsu To Leverage On Datsun Suppliers To Develop Sub-Etios Car For India

Daihatsu Motors, the low-cost brand owned by Toyota Motor Corporation,  is leveraging on Datsun’s suppliers in the domestic market to develop a sub-Etios car for emerging markets including India. The minicar, which is expected to be priced in the range of Rs. 3.5-4.5 lakh, is likely to be unveiled at the 2020 Auto Expo.  Even though no announcements have been made, industry sources reckon that Daihatsu may establish a production line inside the premises of Toyota’s 2nd manufacturing facility at Bidadi, Bangalore where the Etios (both sedan and hatchback) is currently made. Once launched, it will be pitted against Maruti Alto, Hyundai Eon and Datsun Go.

According to an executive from a leading auto component firm supplying to Datsun in India and Indonesia, “Daihatsu is quite serious about the Indian market and are excited about it. We are already supplying to their competitors in India and Indonesia. So it’s a logical move by them to approach us to collaborate with them for their product lines in India. What we have been told is they will be developing products below the Etios (by Toyota) for the Indian markets which would be positioned in the affordable segment. However, it will take them around two to three years to roll it out in the domestic market.”

Daihatsu is Japan's largest maker of minicars with engines up to 660cc made specifically for the domestic market as a low-cost alternative to passenger cars. Incidentally, Datsun is also a budget car brand owned by the Nissan Motor Company and has launched a slew of products in the mass market segment positioned below Nissan Micra hatchback (Etios competitor).
A leading newswire agency had recently reported that Daihatsu Motors is firming up plans to launch compact cars in Brazil and would like to replicate the same in other emerging markets especially India. Despite repeated attempts, BW Businessworld could not reach out to Daihatsu for any comments pertaining to their plans for the Indian market.  

Puneet Gupta, South Asia Manager -Vehicle Sales Forecast, IHS Markit, stated, “This is an excellent strategy as Toyota will be able to exploit the expertise and efforts done by Nissan. Toyota will be able to develop and hasten the development process and drastically reduce their time to develop a value-for-money product. This way Daihatsu can taste the success and can be competitive in a market like India which is becoming highly dominated by Maruti Suzuki. This mantra can make Toyota -Daihatsu a big threat for Maruti Suzuki and an opportunity for Indian consumer to get more choice in the car market.”
Meanwhile, there is also a lot of speculation that unlike what Nissan did with Datsun, Toyota may retain its own brand rather than introducing Daihatsu. However, some media reports are claiming that Datsun would like to manufacture cars under its badge or may come up with an all-new brand like ‘Scion’ (now discontinued) in the US.   Toyota, which forayed into India nearly two decades back, has always shied away from launching a sub-Rs. 5 lakh passenger car (below Etios) for the Indian market. Incidentally, this segment still accounts for 60-65% of the domestic passenger vehicle market.

When N. Raja, Senior Vice President and Director of Sales & Marketing, Toyota Kirloskar was contacted, he stated, “Toyota and Daihatsu are already holding advanced talks on bringing in a small car for certain emerging markets including India. Both the companies would be working in the best interest of customers. We are hopeful that by sharing and unifying strategies for the future, mutual synergies will be steadily achieved. Concrete plans for each country is yet to be determined.” When asked to shed some further light on sharing manufacturing facilities with Datsun in India, Raja maintained, “It is too premature to comment on what strategies Daihatsu will implement here. We have to see whether they will use the existing resources or have a separate unit.”

It may be recalled that early this year Daihatsu has decided to establish a new in-house company called the Emerging-market Compact Car Company, which will not be bound by conventional ideas or restrictions. “The new company will launch competitive, ever-better cars in emerging markets based on Daihatsu's know-how for manufacturing reasonably priced, good quality vehicles.The new Emerging-market Compact Car Product & Business Planning Division will cross the organizations of both Toyota and Daihatsu,” revealed in a joint statement issued by Toyota and Daihatsu.