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Daihatsu hangs on

Ray of hope: The YRV Concept shown at the Tokyo motor show could point to Daihatsu's future.

Daihatsu sales may be slumping but under Toyota control there is some hope for the future

11 Apr 2000

DAIHATSU'S road back to health is to be a long one, according to the brand's new general manager, Mr Alan Porich.

Mr Porich, a Toyota Australia executive, is set to assume his new role on July 1 when control of Daihatsu Australia passes to Toyota. In Japan, Toyota Motor Co owns 51 per cent of Daihatsu.

Mr Porich has just returned from a two-week briefing in Japan where he says Daihatsu executives were positive about the brand's future in Australia.

The first six months of Toyota Australia control will be spent integrating back office systems and reviewing the 130-strong dealer network.

"We have to pick up economies of scale and reduce the overall costs of peration," Mr Porich said.

"Daihatsu does about five per cent of the business done by Toyota." A gaggle of revised or new cars is expected to trickle in during the next year, though Mr Porich is realistic enough not to expect a huge increase in sales volumes in the short to medium term.

"The mix will change soon. We're not planning to cut back models, but the change is coming from Japan, a world wide change to some bits of the line-up," he said.

"The focus on growth is longer term. There are some new models coming but the move to high volume may be a little way off. Daihatsu is a niche player new products coming will ratify that. Daihatsu has a good name in small cars and we will be seeking to build upon that, to reinvigorate the brand.

"We want to return the brand to where it was five years ago." Mr Porich identifies Daihatsu's strengths as being the builder of cheap, well engineered small cars.

"Daihatsu in Australia will develop its own brand and image and customer base (separate from Toyota). Rural buyers and unfussy practical people make up the base. There is plenty of repeat business. Customers want a rock solid brand. We want to hang on to that and at the same time make the brand a bit more exciting," Mr Porich said.

"Image cars are important to any franchise, we want to build in a couple of those over next few years. We'll still supply functional, down to earth cars but a tad more excitement is coming in the years ahead." He said Daihatsu had to regain the confidence of its target market and rebuild the brand.

"Over time, building the brand is just as important as building the products," Mr Porich said.

In the early 1990s Daihatsu Australia expected to increase its business from about 15,000 vehicles or three per cent, to about four per cent of the market. At present Daihatsu holds 0.7 per cent of the market.

Killing Daihatsu's hopes in the mid-1990s was the onslaught of the bargain-basement South Korean brands and the uncooperative yen/dollar exchange rate hampered Daihatsu's ability to respond on price or product.

Recently the three-cylinder sub-$12,000 Sirion offered some hope of a return to respectable volumes, but according to some sources restricted volumes stifled sales. The Sirion is a huge hit in Japan where it is also sold bearing a Toyota badge.

A four-cylinder Sirion has been revealed as a concept and may come to Australia. It uses a version of the 1.3-litre engine found in the Toyota Echo.

Daihatsu's once popular range of small four-wheel drive vehicles, the rugged Feroza and Rocky, proved too agricultural for the burgeoning urban 4WD buyer.

At last year's Tokyo motor show Daihatsu showed a stylish, small and quite feasible open two-seater called Kopen, based on its mini car platform and powered by a four-cylinder, 660cc, 16-valve, turbocharged engine.

Daihatsu also showed a potential replacement for the Charade, called YVR. Its boxy stance could mean it would be billed as a mini-people mover.

One of the toughest parts of the job for Toyota will be paring back the dealer network.

Mr Porich said that in some months last year some dealers would have "not fired a shot" in terms of new car sales. The dealer network sold 8134 vehicles in 1998 and 6418 in 1999, according to VFACTS.

The majority of the Daihatsu car park is also out of warranty and thus less likely to be visiting the franchised dealer for service and parts.

Several Daihatsu dealers also sell Toyotas and thus are familiar with Toyota's dealer strictures. Others, Mr Porich warns, will have a period of grace in which to upgrade to Toyota standard.

"It will be up to dealers to consider their links with Daihatsu. There is a good long-term future but in the short term we cannot offer more volume." Mr Porich said it was never the plan to kill off Daihatsu and that in Japan, Daihatsu executives were still enthusiastic about a sales operation in Australia.

Mr Porich said his role as general manager would also give him responsibility for sales and a marketing role would be filled by another executive.

"We hope to maintain as many field people as possible so that the dealer's point of contact remains constant," he said.

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