Toyota plans to increase its share in the Indian car market by introducing a small, no-frills car from the Daihatsu brand. The decision is expected to come by the end of this year.

Daihatsu Xenia
Daihatsu is the Japanese subsidiary of Toyota which primarily sells small cars

Toyota has achieved an exclusive status in India. The automaker’s Corolla and Camry cars are seen as luxury cars in India due to their formidable road presence along with exquisite build quality, designed to last a lifetime. But one class of cars where Toyota has taken a heavy beating over the years is the small car segment. Thus Toyota has decided to rectify that and is planning to introduce small cars made by its subsidiary Daihatsu in India.

Toyota plans to bring the small cars made by its sister brand to get a slice of the explosively growing small car segment in the third largest Asian economy. The decision is expected to come by the end of this year or even earlier as the Indian car market is one of the fastest growing markets in the world and is projected to become the third largest market by year 2020. The automaker has said that instead of setting up a separate plant, Daihatsu cars will share factory floor space with Toyota’s existing facility in south India, with almost 1,00,000 units’ capacity per year.

The Japanese car-maker has also said that since Daihatsu is an unknown brand in India, the automaker may consider selling cars under its own Toyota brand instead of spending money on brand building exercises and setting up a new sales network. Also, since Toyota is considered as a high-end brand in India, the manufacturer may look into ways to prevent dilution of its brand, such as setting up a NEXA like different dealership network for its premium offerings.

It’s the sheer brand power of Toyota which makes it possible to successfully sell cars like Fortuner and Innova. Although very competent products, they sell at a high premium over rivals. But the recent low cost offerings of the Japanese brand, namely the Etios twins, is considered a sales failure mainly due to bland and un-inspiring design and compromise on quality and finish. The company has publicly accepted that the Indian car market is a very tough nut to crack and they have miserably failed in the small car segment.

The world’s largest automaker is looking for ways to increase its market share in the country to 10 percent by 2025. India is known as the land of small cars and the absence of a cheap, no-frills car is hurting Toyota’s sales chart very much as small cars accounts for more than two-third of all the cars sold in the country.

Daihatsu FX Concept Interior
Toyota wants to increase its market share by introducing small cars from Daihatsu