Toyota has put the India launch of Prius, the world’s first mass-produced hybrid vehicle, on the back burner. Infrastructure issues, a steep duty structure and inability to launch at a competitive price are some of the reasons cited by company officials.
The recent move by Honda, Toyota’s arch rival, to slash the price of its Civic Hybrid by Rs 8.14 lakh could also have interfered with Toyota’s plans to launch Prius in India, sources said. Toyota was looking to launch the car in 2009 at Rs 20-22 lakh. Honda’s Civic hybrid currently costs Rs 13.36 lakh.
The hybrid cars, which use both petrol engine and electric motor, are fuel-efficient and have lower emission levels, making them environment-friendly. Toyota’s domestic arm, which does not have the required manufacturing infrastructure to roll out hybrid cars, is unsure of the initial volumes and feels that the Indian market is not yet ready for such cars.
Toyota is said to be working on a small, inexpensive car for India, which could also be sold in other markets in Asia, Africa, South America and perhaps Eastern Europe. However, this car, which could cost as little as Rs 2.5 lakh, might not be sold under the Toyota brand name. Instead, Toyota is likely to develop an all-new low-cost brand for this car. The Japanese carmaker has done this earlier with Lexus, its luxury car brand, and Scion, its youth-oriented brand.
Toyota Motor Corp and its mini vehicle unit Daihatsu Motor Co are developing a new car for India that will likely sell for around $5,000 (Rs. 2.5 lacs). Toyota, the world’s biggest automaker, has lagged rivals in the race to win over India’s cost-conscious consumers - a battle that promises to heat up in earnest with Tata Motors scheduled to launch its $2,500 Nano car soon.
A venture of India’s Bajaj Auto Ltd with Renault SA and Nissan Motor Co plans a similar car, while Hyundai Motor Co and General Motors Corp are also studying an ultra-low-cost vehicle.
Toyota has so far only disclosed plans for what it calls an “entry family car”, which is scheduled to be produced in India and Brazil from 2010 and 2011, respectively. That car is expected to cost around $8,000, although Toyota has not officially mentioned a price.
The Asahi said Toyota will likely build the $5,000 car in India, with sales also possible in Brazil. Toyota executives have so far denied any interest in developing an ultra-low-cost car, arguing that selling such a car under the Toyota badge could hurt its brand image.
Toyota Motor Corp. has recently expanded the production of the Corolla compact passenger car at two of its North American plants, company officials told Jiji Press on Tuesday. In North America, Toyota manufactures the Corolla in California and Canada, with annual production volumes reaching some 200,000 units and 160,000 units, respectively.
The two plants will increase their Corolla production for three months through December. As a result, their combined output should be 15,000-20,000 units more than earlier planned, the sources said. Toyota has suspended the production of large-sized vehicles at three of its U.S. plants due to a growing inventory of unsold vehicles resulting from weak U.S. demand.
Toyota is now focusing on smaller vehicles with greater fuel efficiency that sell better in the U.S. market. To shore up sales, the automaker has launched zero interest campaigns on new auto loans.
Toyota Motor Corp., Japan’s biggest carmaker, surged the most in almost 21 years in Tokyo after U.S. and European governments agreed to buy stakes in banks helping ease credit market concerns. Toyota rose 500 yen, its daily trading limit, or 16 percent, to close at 3,720 yen on the Tokyo stock exchange. Honda Motor Co., Japan’s second-largest carmaker, jumped 18 percent to 2,485 yen, and Nissan Motor Co., the third-largest, advanced 17 percent to 544 yen.
The U.S. government plans to buy stakes in nine major banks, according to people briefed on the matter, to help rescue frozen credit markets. France, Germany, Spain, the Netherlands and Austria committed 1.3 trillion euros ($1.8 trillion) to guarantee loans and take stakes in lenders. Japanese carmakers rebounded on the news after posting record declines last week.
“A major sense of relief is spreading in the markets and boosting the auto shares,” said Mitsuo Shimizu, a market analyst at Cosmo Securities Co. in Tokyo.
Toyota Technical Center (TTC) celebrated the grand opening of its new engineering and safety testing facilities here today with Michigan Governor Jennifer Granholm and U.S. Congressman John Dingell, as well as several hundred government officials, community leaders, suppliers and Toyota team members.
TTC, a division of Toyota Motor Engineering & Manufacturing North America (TEMA), already has a site in Ann Arbor. With the expansion in York Township, TTC is adding 400 new jobs and will boost its employment to 1,100 by 2010. “Toyota’s investment of $187 million to advance research and development demonstrates our commitment to the North American automotive industry,” said Shigeki Terashi, TTC president. “TTC has been conducting R&D activity in Michigan for over 30 years and recognizes Southeast Michigan as the center for automotive R&D in North America.”
“Continued commitment and investments by Toyota are important as we maintain our efforts to diversify our economy and create jobs here in Michigan,” Governor Granholm said. “The Toyota Technical Center is a huge win for Michigan and our workers - our reputation as the automotive capital of the world brought Toyota here, and we will continue to attract R&D and advanced manufacturing jobs because of our global leadership in automotive research and development.”
Toyota seems to have gotten off to a very good start with the new Corolla Altis, notching up more than 1,100 bookings already, barely a month after the car was launched in India.
Toyota which aims to sell up to 20,000 units of the Altis in India in 2009, expects to sell around 8,000 cars between September-December this year. The company hopes that with the launch of the Altis, Toyota will be able to garner a 30-35% market share in the C+/entry-level D-segment in the country by the end of next year. The company currently has a 15% market share in this segment.
