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First look: Toyota, Honda unveil new Asian compacts

Another Thai Honda: All-new Brio goes on sale in Thailand in March.

Japanese target Asian mass-markets – and maybe Australia – with low-cost city-cars

2 Dec 2010

TOYOTA and Honda this week presented two new city-cars designed to target high-volume Asian markets, both of which could eventually also be sold in Australia.

Underlining the importance of India – the world’s most populous nation and Asia’s second-fastest growing major economy – Akio Toyoda attended his first overseas car launch as Toyota Motor Corporation president to unveil the new Indian-built Etios sedan in Bangalore yesterday.

The pint-sized Etios is crucial to the world’s largest car-makers hopes of increasing its seventh-place position in the world’s largest car market – which is dominated by Maruti Suzuki with a 39 per cent of India’s passenger car market - from just 2.8 per cent so far this year to 10 per cent in five to 10 years.

“Profitability may be thin in small cars, but we are looking at the long-term,” Mr Toyoda told Bloomberg. “The all-new Etios reflects our determination to serve an even-broader range of customers here with genuine Toyota quality.”

On sale now in India priced from 496,000 rupees ($A11,290), Toyota’s cheapest Indian model undercuts Ford’s Fiesta (589,030 rupees or the equivalent of $A13,400) and Honda’s City (815,000 rupees or $A18,560) – but not Suzuki’s dominant Swift (405,300 rupees or $A9235).

Of course, Tata’s Nano remains India’s (and the world’s) cheapest car at 131,331 rupees ($A2195), while Nissan also plans to launch a super-low-cost car – built by the nation’s second-largest motorcycle make, Bajaj Auto – in 2012.

Toyota’s aggressively priced compact sedan is expected to find 70,000 annual sales – more than the total number of vehicles Toyota sold in India to October this year, when 874,000 Suzukis and 299 Hyundais were sold.

Mini and compact cars comprise three quarters of the market volume in India, where sales rose 18.7 per cent last year to 1.43 million units. Last year, Honda was the fourth-largest car-maker in India, behind Suzuki, Hyundai and Tata Motors.

Around the same size as the Mazda2 sedan (and only 35mm shorter than Toyota’s own Yaris sedan), the Etios measures 4265mm long, 1695mm wide, 1510mm high and is powered by a new 1.5-litre engine, Indian production of which will eventually bring the car’s local content to 90 per cent, creating up to 2500 Indian jobs.

The Etios sedan will be joined in April by a hatchback version also built by TMC subsidiary Toyota Kirloskar Motor (TKM). The smaller ‘Etios Liva’ hatch will come with a 1.2-litre engine.

Toyota says the Etios was designed specifically for India’s rapidly expanding middle-class – hence its “status-evoking” styling and “smooth ride even in demanding conditions” - over a five-year period, development of which continued unabated during the GFC.

Variations of the roomy B-segment sedan - dubbed by some within Toyota as the “21st century Corolla” - will also be exported from India, which supplies Australia’s first affordable sub-compact model, the Suzuki Alto hatch ($11,790), and now Hyundai’s i20 (from $15,490).

However, like this month’s all-new Nissan Micra hatch, which will be joined here by a Thai-built light sedan in 2012, the Etios will also be produced in China and Thailand, from where Australian’s Honda Jazz and City, Ford’s Fiesta and the Mazda2 are sourced.

8 center imageLeft: Toyota Etios interior. Below: Honda Brio.Toyota Australia makes no secret of its desire to import its smallest vehicles – including the Yaris and Corolla - from lower-cost Asian production sites than Japan. Toyota already makes the Yaris sedan in Thailand and China, where it has sold just 644,000 vehicles this year to General Motors’ 1.98 million and Volkswagen’s 1.65 million.

Toyota has confirmed it will launch the next-generation Yaris in Australia by October, by which time it will be joined in the light-car segment by replacements for Holden’s Barina and Kia’s Rio hatch and sedan models plus an all-new Hyundai Accent (i25) sedan from Korea, plus a host of Chinese models from Great Wall, Chery, Geely and others.

However, like Hyundai with its i10, Toyota also appears closer than ever to joining Suzuki and Holden (with its new Barina Spark) in Australia’s fledgling sub-light segment.

“We have been looking in the sub-compact area for some time,” Toyota Australia executive director of sales and marketing David Buttner told GoAuto at the Sydney motor show in October.

“It is no doubt an emerging segment in the Australian marketplace, with the Suzuki Alto and some other products that are coming. TMC has some plans on the drawing board, but I have nothing I can share with you today.

“There is a vast proliferation of models being developed around the world and we are always privy to what they are and we make our pitch.

“Everything depends on volume, landed cost and production cost of the vehicle. You can’t have vehicles uniquely designed for your market if your volumes (are insufficient) to get a return on the investment required to develop that vehicle. But we are always watching.

“We are seeing vehicles coming out of India, although not to any great extent yet. Certainly there is a change in global sourcing patterns, and I am sure Toyota will be observing and understanding what our competitors are doing and looking at what we have to do to maintain our number one position,” said Mr Buttner.

Toyota Australia has ruled out a local release of the three-plus-one-seater iQ micro-car on the basis of its (circa-3.5-metre) size and cost, but the low-cost/high-volume Etios could represent another option for it in the emerging sub-light segment – whether or not the hatch version is smaller than the Yaris three-door (currently 3750mm long).

For the record, Toyota Style Australia – which last December revealed it was working on a regional product on behalf of Toyota Japan that would not even be sold in Australia - has confirmed it did not have any involvement in the Etios’ design.

However, TSA manager Paul Beranger told GoAuto in Sydney that his team was in discussions with Toyota representatives from Thailand and Malaysia over an undisclosed design project.

Meantime, for now, Honda has ruled out Australian sales of its new entry-level Asian-market hatchback, the Brio, which made its global debut in bright green prototype form at the 27th Thailand International Motor Expo on November 30 and was first revealed as the New Small Concept (NSC) at the New Delhi motor show in January 2009.

Due on sale in India and Thailand in 2011, Honda says its all-new sub-B economy hatch will employ local steel and components to reduce costs.

Honda Australia already sources the majority of its models from Thailand, but the Brio is smaller than the Jazz at 3610mm long, 1680mm wide and 1475mm high.

Unlike the edgy NSC concept, the pre-production Brio features an all-glass tailgate, less aggressive bumpers and lights, visible rear door-handles and a huge Honda badge on a large chromed grille crossbar, but loses the show car’s bigger polished alloys, LED headlights and sharp D-pillar glasshouse treatment.

Honda says the Thai model due on sale there in March will return fuel consumption of less than 5.0L/100km. The Brio will have a local starting price of about 400,000 baht ($A13,595).

“Honda would like to expand the joy of mobility to more customers in Thailand, India and other Asian countries through the introduction of a new small vehicle with compact and highly efficient packaging by utilizing our own experiences cultivated by motorcycle business here in Asia,” said Honda president and CEO Takanobu Ito.

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