Is Toyota planning another Small Car?

in Small Cars, Toyota

Toyota Motors has a small share of the Indian car market at present. But the company has a brand new hatchback - Etios - lined up for launch by the end of this year or early next year. The company expects the model to contribute about 50 per cent of the total sales in 2011. Recently, the company also launched the diesel variant of its sedan Corolla Altis and at the event the spokesperson, being quizzed by reporters, clearly denied any plans of launching another small car.

However, a report in a leading foreign news agency points otherwise. According to the report Toyota Motor Corp is in the process of developing a new low-cost car for buoyant markets like China and Southeast Asia. The report says that the car is supposed to be launched by the year 2012 under $11,520. The news also appeared in Japan's Chunichi Shimbun newspaper.

In a recent statement Toyota managing director Hiroshi Nakagawa clarified to a car portal saying, "Cars like the Yaris or Vios are not suitable for the Indian market. They cater to certain specific markets like Thailand. It's not meant for India. However, for the Indian market, we have Etios. There is no hatchback planned below or above this. We are also employing the Kaizen methodology to improve our production process." But the report suggests that this all new compact car would have Vios and Vitz/Yaris subcompact models as its base. Also, the new car is likely to be localised upto 30-40 percent.

Toyota has been hit badly in the recent times by massive recalls in the US and its image has suffered badly. Also, the company has a very marginal presence in fast developing countries like India, Brazil and China. These steps are likely to help the company gain a piece of these markets that offer great opportunities as the car penetration level per 1000 person is still very low.

In India, Toyota is up against carmakers like Maruti, Hyundai, Tata, Volkswagen, Nissan and Ford in the compact segment. Soon Honda would also launch its hatchback in the Indian market.