Oct. 5 (Bloomberg) -- Toyota Motor Corp. will sell a low-cost car in Thailand, adding to plans to introduce similar models in China, India and Brazil as the world’s biggest carmaker seeks to boost growth in emerging markets.
The vehicle will be the “21st century Corolla,” Executive Vice President Yukitoshi Funo said in an interview yesterday, referring to the world’s best-selling car that Toyota introduced in 1966. “We have to enter the large-volume zone” in emerging markets, Funo said.
While Toyota is the leading carmaker in Thailand, its sales in fast-growing economies including India and Brazil lag behind rivals. Adding cheaper models may also help the company raise sales in China, the world’s largest auto market, where its 6.9 percent share this year through August trails leader Volkswagen AG’s 13 percent.
“We want to provide a car that is in reach of working people,” Funo said in Tokyo.
Unlike Nissan Motor Co.’s March and Micra compacts designed for both developed and emerging markets, Toyota’s low-cost car will target “a newly emerging middle class” in developing countries, Funo said.
The Toyota City, Japan-based automaker rose 0.4 percent to close at 2,975 yen on the Tokyo Stock Exchange. The stock has declined 23 percent in 2010.
In India, the car will be called the Etios and go on sale in December. A 5-door hatchback version may be priced at about 450,000 rupees ($10,070), while the sedan version may cost an additional 80,000 rupees, said Deepesh Rathore, managing director of IHS Global Insight India.
Toyota’s Corolla is sold in 52 countries, and cumulative global sales have reached more than 36 million vehicles in the 44 years since its introduction, according to the company.
While pricing the new, cheaper car in the range of competitors’ low-cost models, Toyota won’t necessarily undercut rivals, rather providing “additional value” with car quality and after-service maintenance, Funo said.
“Toyota faces a conundrum: do you want to sell a lot of cars or preserve your brand image?” said Ashvin Chotai, London-based managing director at Intelligence Automotive Asia Ltd. “It’s a careful balance of the two.”
In India, where the tagline for the 1 million-rupee Corolla Altis sedan is “Designed to inspire envy,” Toyota sold 50,315 vehicles in the eight months through August. Market leader Maruti Suzuki India Ltd. sold 577,296, according to researcher J.D. Power & Associates.
The Innova minivan, Toyota’s cheapest model in the nation, starts at 834,464 rupees, almost double the expected price of the Etios, which will likely compete with Maruti Suzuki’s Swift, which starts from 405,341 rupees in New Delhi, HIS Global’s Rathore said.
Toyota sold 197,959 vehicles in Thailand during the same period.
Lowering procurement costs to a competitive level is a “top priority,” Funo said.
In China, as the lower end of the market is expanding, so is the luxury sector. Toyota is adding new Lexus models in the country and plans to introduce the high-end Alphard minivan, Funo said, without specifying the timing.
“Lexus actually sells better in China than in Japan,” he said.
Myanmar Venture Stake
Separately, Toyota Tsusho Corp., an affiliate of Toyota, has sold its share of a venture in Myanmar.
Katsutoshi Yokoi, a Toyota Tsusho spokesman in Tokyo, confirmed the stake sale, declining to comment on the timing or reason, citing an agreement with parties involved.
Toyota Tsusho in June sold its stake in the venture, which builds cars and motorcycles with Myanmar’s military regime, because of the country’s poor human-rights record, Reuters reported earlier today.
The company, based in Nagoya, Japan, is 22 percent owned by Toyota Motor.
To contact the reporter on this story: Makiko Kitamura in Tokyo at firstname.lastname@example.org
To contact the editor responsible for this story: Kae Inoue at email@example.com