Toyota Readies New Budget Car For Emerging Markets

After Suzuki throws in with the guys from Wolfsburg, Toyota suddenly hears VW’s footsteps

By Andy Bannister

12.24.2009

Toyota LogoWith car industry growth next year likely to be led by emerging markets like India, Toyota is about to pitch in with a new budget car to be shown in concept form at the New Delhi Auto Show next month.

According to Autocar India, the new model will be called Etios and will be priced at around $10,000.

This means the company has shied away from direct competition with the much-hyped Tata Nano, which competes in a much lower class and price range.

Instead, the Etios – its name means “the origin of” – will be aimed squarely at the highly successful Suzuki Swift, made by Suzuki’s Maruti subsidiary in India.

Maruti has long been one of the country’s leading brands, and Suzuki’s recent alliance with the resurgent Volkswagen group heightens the urgent need for Toyota to make inroads into India.

The booming Asian country is likley to be a particularly lucrative market for car manufacturers in the coming decade, with huge growth potential.

2010 Ford FigoAnother key, though so-far unproven, competitor will be Ford’s recently previewed Indian-market special, the Figo – its name means “cool” in Italian.

Unlike Toyota, Ford has gone down the well-trodden route of breathing new life into an effectively obsolete car. The Figo, which goes on sale in 2010, is basically a previous generation Fiesta with a restyled nose.

Although all-new, the Etios is likely to have a lot of Yaris DNA and will be offered as a four-door saloon first, with a hatchback following close behind.

It could turn out to be one of the most basic Toyota models since the original Corolla began putting on weight and equipment back in the early 1970s. Strict cost-paring is said to have been the order of the day for this new budget model.

In tune with current Indian consumer needs, the Etios will reportedly feature only limited sound-proofing, a durable rather than luxurious interior, basic seats and a single windscreen wiper.

Power units will include the 1.4-litre diesel already used in some versions of the Yaris, and a smaller petrol unit.

India is likely to be only the first of a number of markets for the car. Toyota sees plenty of potential for a budget model in countries where it has an existing presence and good reputation but struggles to compete on price.

Russia – where the Dacia Logan is doing particularly well for Renault – is likely to be one key target, and another will be Brazil, where Toyota needs a competitor to take on cheap locally-built offerings from Fiat, VW and Chevrolet. This version will be Brazilian-made and later exported to elsewhere in South America.

Toyota AygoThis isn’t the first time the Japanese maker has experimented with low-priced models for regional markets. In Europe it currently sells a sub-Yaris city car called the Aygo, a joint venture with Peugeot-Citroën, which competes in the entry-level market on the continent.

The diminutive Aygo, built in the Czech Republic, has been a successful addition to the company’s rather dull European line-up, and has won the brand some new younger customers as well as bringing price-conscious shoppers into Toyota showrooms for the first time in many years.

As for the Etios, expect to see pictures of the concept car at the New Delhi Auto Show from 5 January, while the production version will go into production in a new factory in the south of India later in 2010.

COPYRIGHT Autosavant – All Rights Reserved

Author: Andy Bannister

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7 Comments

  1. Ha! Toyota should be nervous. VW is gonna have their number in the small car market now, wih Suzuki on their side.

  2. This segment is going to be dog-eat-dog for years to come, and is not going to be for the faint-hearted.

    To be honest, I wonder if it isn’t time for Toyota to just leave the very low-end and take the better margins in the next level up.

  3. I don’t see why Toyota could not compete effectively in this market if the car is locally made in India.

  4. You guys who are counting Toyota out must be crazy, they are still the best at providing dependable small cars.

  5. The dark horse in this situation is the Ford. It’s going to do much better in thi segment in India than evryone thinks because Indians like tried and true mechanicals for the poor road condtions outside the cities.

  6. I agree, the people saying that Toyota is now just going to fold up their tent and give up are insane. Toyota is going to go after Suzuki and it’s new master, VW, with a big club.

  7. Dream on, Toyota-haters! Toyota’s not going to give up an inch!

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