Toyota is looking to emerging markets for future growth.Considering North America, Europe and Japan to be essentially mature, Toyota announced today that it is increasing its small car efforts in a number of emerging markets.
Over the next few years, Toyota plans to introduce eight compact cars designed specifically for emerging markets in Asia and South America, where General Motors and Volkswagen already have an upper hand.
"In emerging markets, there are four or five automakers vying to take the lead in sales volumes," Toyota Executive Vice President Yukitoshi Funo said at a media gathering in Tokyo. "Particularly in the Southeast Asian region, Volkswagen and others are looking to challenge our lead so we can't be resting on our laurels."
By 2015, Toyota is aiming to sell half of its global inventory in emerging markets. Last year, around 45 percent of its cars were delivered to buyers in fast-growing markets like China, India and Brazil, and that represents a massive gain over the roughly 19 percent share it saw in 2000.
Most cars sold in global markets are produced locally in order to reduce their costs, but Toyota is aiming to go one step further by sourcing 100 percent of its emerging market vehicle components locally.
Reducing its dependence on more costly imported parts would help keep cars profitable even with list prices under $13,000, and it would help Toyota avoid unforeseen production stoppages like last year's tsunami and earthquake in Japan.
But Toyota says that it isn't planning to compete in the ultra cheap market like some home market rivals in India and China.
"We won't go to the 500,000 yen ($6,300) segment - it's not our category," Funo said. "We want to beef up our presence in segments where we can be competitive. There are many other options for customers looking in that price range, including used cars."
The eight new compacts it plans aren't going to compete with each other in individual markets, but they might be exported to North America or Europe, Funo said.
"If customers in the United States or Europe like them, I will flexibly think about [selling them there]," he said.