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Toyota Oz bids for iQ

Smart: New iQ four-seater is claimed to accommodate four adults in comfort.

Tiny but trendy Toyota iQ is on the agenda for Oz, maybe even if it loses money

21 Oct 2008

TOYOTA Australia has put its hand up for the iQ micro-car and remains in negotiations with its parent company in Japan to import the brand’s smallest ever model.

Revealed as a concept at the 2007 Frankfurt motor show before being revealed in final production form at this month’s Paris motor show, the tiny city-car would be positioned below the Yaris in Toyota’s range to compete with the likes of next year’s Suzuki Alto, the yet-to-be-confirmed Mazda1 and a host of Chinese-built babies from brands like Chery and Lifan.

“iQ is an interesting vehicle,” said Toyota Australia’s executive director of sales and marketing David Buttner at this month’s Australian International Motor Show in Sydney.

“I’ve spoken quite openly about the fact that sub-Yaris would be a nice place to be, particularly with the downsizing that we’ve seen and that is now sustainable in the Australian marketplace. We’ll continue discussions with TMC.

“At any point in time we always go in confidently but that confidence sometimes is tempered a little by the availability of engineering resources to develop products specific for Australia.

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“We put our bid in and we hopefully did put a compelling enough story for each and every product. We don’t always (succeed) but we always try pretty hard,” he said.

Asked when the decision would be made to import the iQ, Mr Buttner said Toyota Australia planners would meet locally the following week (last week) to prepare for future model discussions with Toyota Motor Corporation (TMC) early next year.

“We are always keeping our eye on new product globally, to see what Toyota’s got. We have a five-year cycle with TMC. We’re up there again next year at a joint product discussion in the first quarter, and we have some pre-meetings coming up here next week actually.

“We’re locked in for five years and we review every 12 months. We have at least two product discussions every year and we’ll just always keep pushing for product that meets the needs of customers here in Australia,” he said.

Toyota Australia’s corporate manager of product planning Peter Evans told GoAuto in March that both the iQ and the sub-RAV4 Urban Cruiser were on the company’s future product radar, but would not be sold here before 2010.

“Both models are very worthy of interest moving forward, provided the pricing was right. Lead times are long in this industry, especially if any unique engineering adaptation is required. Hence with no current approved plan, even if we secured them tomorrow, 2010 would be a relatively early introduction,” said Mr Evans earlier this year.

Mr Buttner cautioned it was far too early to discuss pricing, but confirmed the iQ would need to be priced sufficiently below the top-selling Yaris light-car, which starts at $15,190 for the 1.3-litre YR three-door.

That would allow Toyota to minimise sales substitution with the Yaris and to compete successfully with a new wave of sub-light-sized city vehicles, which next year should lower Australia’s new-car entry price point from $13,990 (for Hyundai’s Getz 1.4 three-door and Proton’s Savvy 1.2 five-door), to closer to $12,000.

“That’s something we just haven’t decided. The movement in price in that segment, the specifications and value for money in that segment… it’s really a price where we’ve seen deflation – look at the price and spec of cars now compared to a couple of years ago. You’d have to be looking at a sub-$15,000 vehicle.” Mr Buttner dismissed speculation the iQ could be sold as some sort of boutique niche model to rival Daimler’s Smart models, complete with a price premium over the Yaris.

But he suggested his company could sacrifice profit margins to establish the model here.

“You have to look at your total range of vehicles and you have to look at your profitability across those vehicles,” he said.

“I wouldn’t say that we’d deliberately set out to make a loss on anything, but we make decisions driven by the economic circumstances and timely needs of the markets. We look at the economic circumstances, we look at the product (and) we make decisions based on that.” He said Toyota’s plans to import the iQ would not be dumped because of the recent downturn in value of the Australian currency relative to the US dollar, which makes imports more expensive and exports more lucrative for Toyota.

“Regardless of the weakness of the Australian dollar we have a commitment to the Australian market to remain competitive, to bring in products that customers want and of course everyone is nervous and shaky at the moment… “(But) we’ll always continue to provide products people want. That’s our job, that’s what Toyota strives to do globally,” said Mr Buttner.

Read more:

First look: Toyota thinks petite at Paris

Geneva show: Toyota eyes iQ, Urban Cruiser

The Road to Recovery podcast series

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