Toyota aims to cut Japan sourcing

TOYOTA Australia is looking to cheaper production sources such as Thailand for its next-generation Corolla and Yaris which it admits are too expensive from Japanese factories.

This would put both vehicles in a far more even pricing keel with most rivals, as well as help improve the local operation’s bottom line in the wake of a disastrous $107.9 million operating loss for its 2009-2010 financial year ending March 31.

The third-generation Yaris is due to be unveiled sometime towards the end of next year, while small car buyers will have to wait until later in 2012 at the earliest to drive the all-new 11th-generation Corolla.

Toyota Australia senior executive of sales and marketing Dave Buttner said switching the sourcing for Corolla and Yaris from Japan to somewhere else could come soon enough.

“I think that any manufacturer who is locked in for the medium or longer term in Japan will struggle in the competitive marketplace when you look at what is happening with other manufacturers now,” he told GoAuto Media in Melbourne.



From top: Toyota Yaris, Toyota Aygo, Toyota iQ.

“So we have to look at other manufacturing bases in the future.

“Yaris could be Thailand – there is no definitive plan yet. We’ve got plants in India now, so there are choices in the region.”Honda Australia led the way in the light-car segment when it switched sourcing the first-generation Jazz from Japan to Thailand for the 2006 model year. Since then it has been followed by the recently facelifted Mazda2 and, soon, the Ford Fiesta and next-generation K13 Nissan Micra.

This will leave the Yaris in company with only the outgoing Nissan Micra, Mitsubishi Colt and Suzuki Swift as ‘Made in Japan’ babies.

In the mainstream small-car class, only the Mazda3, Mitsubishi Lancer, Suzuki SX4 and Corolla are sourced from their Japanese parent companies’ home turf.

South Korea supplies the Hyundai i30, Holden Cruze and Kia Cerato, while the petrol Honda Civic sedan, 2012 Mk3 Ford Focus and possibly some future Mazda3 models are or will be out of Thailand.

Interestingly, Toyota has sourced the Corolla from outside of Japan before for Australia, with local manufacture of the 43 year old nameplate occurring for most of its career up until 1999 (when it was ousted by the 2000 Avalon at the Melbourne plant), while some of the ninth-generation series from 2001 to 2007 also coming out of South Africa for a time.

Today, as more manufacturers extend to low-cost labour rate sources such as Thailand, South Korea and India (with the latter supplying the new Hyundai i20 and next year’s mooted-for-Australia i10 runabout), Toyota Australia realises that it cannot afford to let young and first time buyers stray.

It also is wary of the wave of cheaper Chinese light and small cars that are almost on our doorstep, offering size and performance for a fraction of the price of Toyota’s offerings.

“We haven’t forgotten about China,” Mr Buttner said.

“But what we have to make sure with our small and compact (light) cars for the next generation is to look at both where they are manufactured and their specification regarding safety etc.

“That’s because 75 per cent of Toyota passenger-car sales come from small and compact, and in 2005 they represented 45 per cent of the marketplace, and in 2009 that was 69 per cent.

“In terms of entry into the Toyota brand, our total loyalty (rate) is 65 per cent and first-time entry rate is higher for Yaris and Corolla.

“Here people are coming into our brand, having a good experience, and coming back and buying again. So we are very focussed on those two segments in the market place.

“Trust me. We would ignore those two segments at our peril.”Meanwhile, Mr Buttner reiterated that a model to slot in at under the $15,690 Yaris YR three-door was still a priority for Toyota.

“We have been looking at a sub Yaris,” he said. “I have made no bones about that for a number of years. But we have not found anything appropriate yet.

“As part of our future model line-up study it is something that we are considering.”On pricing grounds he quelled speculation that the next-generation Aygo – a sub-B segment hatch co-developed with PSA Peugeot Citroen and built solely in the Czech Republic – is on the agenda for Australia.

Sadly for Smart car-style aficionados, the lauded iQ city car is also a non-starter for Australia.

“We couldn’t bring Aygo in because it is an expensive car,” he said.

“There is always going to be niche buyers, but if you bring in product that is just niche then you gotta have volume. And we have a large enough model range now.

“We’re trying to bring in some niche stuff, but we’re still trying to pitch it well into the marketplace. Rukus is an example of that. So will FJ Cruiser.

“(But the iQ) is still too expensive. You could land it here at a cost, but then how many buyers are you going to get? We’ll only sell 10 a month.”Yet Mr Buttner is also cold on the idea of importing models manufactured by the Toyota-owned (and small-car specialising) Daihatsu subsidiary.

“We’ve had Daihatsu cars in the past, but we’re not currently looking at Daihatsu product,” he said.

“And you have to look at the product you put your badges on …”