[volkman10]

Toyota Compact Car Company will be responsible for developing products for emerging markets.

These cars will not be sold with the Toyota badge but rather will be with the TOYOTA COMPACT badge.

Toyota Motor Corporation and subsidiary Daihatsu Motor announced their intention to set up an internal organisation that would primarily focus on the emerging markets towards the end of last year. In an exclusive report, we can now reveal that the internal brand has been christened as ‘Toyota Compact Car Company’. As the name suggests, the internal company will be responsible for compact vehicles to be introduced in the emerging automotive markets around the world as Toyota group embarks on a new strategic journey to expand its global footprint and focus on the volume-based segments.

Source

[dark.knight]

There will always be people to justify such collaborations and spin-offs, but I simply don't get it. You have Toyota one of the most profitable car companies on earth and they have no in-house R&D for developing countries to manufacture their own cars? Its come to a point that all Japanese companies are collaborating or getting acquired by each other in order to keep the industry alive. This is all too evident by Nissan's acquisition of Mitsubishi, Toyota's acquisition of Daihatsu, Nissan's early stake in Subaru, Isuzu and Honda's early partnership, Toyota and Suzuki's present stake in Subaru Corporation which in turn owns Subaru, Honda and Yahama joining forces in the motorcycle area, Toyota and Mazda's equity alliance etc. Almost no permutation combination is left now except for Toyota and Honda's union which I don't forsee for a considerable period but might happen nonetheless.

I get it, its a small country and the present global market is unstable and bringing costs down and keeping workforce intact is the need of the day but the roots of their collaboration is sometimes so deep that technically you are buying into just one or two strands of DNA when buying a Japanese car irrespective of the 7-8 brands that are presently in existence.

Obviously its working, in terms of volume this tiny nation manages the maximum sales of automobiles per sq.ft of country area, Germany might come very close. Electronics and automobiles are perhaps the only two major reasons that Japan is thriving and the national players aren't going to let each other down if it comes to it. However that originality, that distinction is fading and getting ever so blurred as time goes given the numerous times that platforms have been shared, R&D and design has been done together and in the merging of philosophies.

[GTO]

I doubt it'll be a sub-brand at the customer level. Maybe just a new division within the company. Toyota would be stupid to brand its lower-end cars like this; the name will become synonymous with cheap or being a "2nd-grade Toyota". Customers won't take kindly to it.

[naikameya]

Originally Posted by GTO

I doubt it'll be a sub-brand at the customer level. Maybe just a new division within the company. Toyota would be stupid to brand its lower-end cars like this; the name will become synonymous with cheap or being a "2nd-grade Toyota". Customers won't take kindly to it.

I second that. While it might be wasteful to manage so many external facing brands if the resources don't get shared, a bigger problem is that you can't sell a poor man's car by calling it a poor man's car. That is exactly what killed Nano...forever.

But you never know... the auto management gurus are known to surprise us.

[GTO]

Originally Posted by naikameya

a bigger problem is that you can't sell a poor man's car by calling it a poor man's car

Just ask Datsun - the brand tried coming back from the grave, but hasn't really gotten out of it yet. The only thing Datsun is managing to somewhat sell is a cheaper Kwid. That's really not what Carlos Ghosn had in mind while resurrecting Datsun.

[FourWheelDrift]

Hmmm ... anyone remember Scion ? Did well with millenials in the US market for a while, then went out of fashion and was shut down.

So, Toyota will try the same thing once again, in other markets ?

Cheers,

FourWheelDrift

[avishar]

No no no no! It will be a very stupid idea if it is launched with a unknown sub-brand. Have you not learnt from others mistakes? For eg, Datsun?

The Toyota brand is not a luxury brand. Instead, it stands for bullet-proof reliability. So there isn't going to be any brand dilution if a cheaper Toyota starts selling in larger numbers. Its brand attributes is not dependent on exclusivity.

[landcruiser123]

Don't make the consumer feel he's buying a cheaper version of your product by branding it or adding a tag-line. Tata did it with the Nano and failed.

Toyota can make Lexus and Hyundai can make Genesis, but these companies should not make 'cheap' brands.

Something like Hyundai-Kia is okay where they share some tech resources but build cars which look completely different.

[400notout]

According to this report on cartoq

However, we have learnt that the Toyota-ised versions of the Baleno and the Brezza won’t be sold with a Toyota badge. Instead, the Japanese auto giant will use ‘Toyota Compact’, a new sub-brand, to sell these cars

This could be to preserve Toyota brand value amongst MS rebadged cars. A kind of heads up to the customer that the products wouldn't have core Toyota values, they're just backed by Toyota service.

[greenhorn]

Why not badge them scion? its a somewhat adjacent brand, and toyota has invested fairly into it before shuttering them in the US
A lot of us Scions were rebadges

[arunramaswamy]

I do not understand this concept of "Emerging Market" specific products and being re-designed (Read watered-down) for India.

Wasn't Etios exactly that and Toyota have already got the answer they were looking for? I am pretty sure with good equipment list Etios would have been a great C2 Sedan and would have sold better than the Yaris joke.

Why would they want to burn their fingers again? And what is this Toyota-Suzuki collaboration? Wouldn't they anyway be selling Cheap cars (India-specific)?

Why not grow some balls and be a premium player in India Toyota if you do not think the Indian diaspora will buy your mass market product? Is it difficult? What Skoda can do, Toyota can do far far better.

As I see it now, Indian mass market thinks Toyota products are not good enough to plonk their hard earned money and Toyota thinks Indians cannot afford their global offerings. Well suits the Indian customers just fine. As it is nobody in the mass market is missing a Toyota and its absence have been adequately covered by the existing and upcoming competition.

[hemanth.anand]

From the link in the opening post, I found this quoted section interesting.
If they really don't want to use the Toyota badge, Will they bring the Daihatsu badge? Although I don't know the legal terms in the alliance between Toyota and Suzuki and if they can really do this.

The significant objective of TC is to establish work processes uninterrupted by conventional practices and rules. Moreover, it will be based on Daihatsu’s approach to produce affordable, high-quality competitive products mainly for the emerging markets. As outlined by Toyota earlier, the Compact Car Company will have three sub-divisions: a Product and Business Planning division, a Product Planning Division and a Quality Planning Division. It was announced earlier by Toyota that Toyota Motor Asia Pacific Engineering and Manufacturing Co., Ltd. would be renamed as Toyota Daihatsu Engineering and Manufacturing Co., Ltd. (TDEM) and become part of the new internal company.

Many people have told that it doesn't make sense to bring Daihatsu after the alliance with Suzuki, but frankly, I don't understand that point.

[vivekgk]

This looks like a plan to go back to Toyota's old strategy of dumping end-of-life products in their third world markets, like they did with the Qualis and the Etios, without affecting the brand value of their better products like the Yaris and upward. They're probably gonna sell the regarded Suzukis under this brand.

[searacer932]

It looks like Toyota are saying that if you want 'safer' cars then buy 'Toyota' cars and that if we want 'unsafe' cars then buy 'Toyota Compact' cars. I think the strategy does make sense. Looks like Toyota does not want their brand name to be associated with tin cans/unsafe cars such as Brezza and Baleno.

[ksameer1234]

Great way to shoot yourself in the foot Toyota! Every car maker thinks that India is a poor-country with no highways and people still moving around in bullock-carts. The best way to sell cars in India hence is to introduce clearly communicated budget brand shouting out loud that these made-for-India (read cheap, made-for-budget) cars are what Indians truly need.

This thinking is precisely why Maruti Suzuki has 50% market share. They did not create a cheap sub-brand, they created a premium sub-brand. And look where they are today. India is a growing economy with people having growing aspirations. If we see value, we are willing to pay premium. Why else would we buy Innovas in hordes? This isn't the direction Toyota should be headed.