Toyota & Daihatsu To Form Joint Venture — New Company By January

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Toyota Motor Corp. has confirmed to form a joint venture with its subsidiary Daihatsu to develop and market compact vehicles in emerging markets like India, Vietnam, and Pakistan. With this, the Japanese company is planning to expand its market share in the Asian markets.

The company plans to establish the new unit in January 2017 said in a statement. Toyota said that the operations will be led by compact carmaker Daihatsu. Daihatsu was absorbed by Toyota Group earlier this year.

Daihatsu will be responsible for procurement, development and production preparations of compact cars. Both the companies will use existing production sites to produce compact vehicles.

Toyota Executive Vice President Shigeki Terashi said in a statement that with the establishment of the internal company, Toyota will look to learn the fundamentals of Daihatsu's competitiveness and will look to change the way they work.

The companies is intending to develop Daihatsu into a global brand with the focus on emerging markets for entry-level compact cars.

The compact vehicle is becoming smaller and energy efficient mainly due to environmental and traffic concerns and the joint venture will enter the segment to provide compact cars we per requirement in the markets.

Daihatsu with a market share of 16 percent in the passenger car market in Indonesia, it manufactures Ayla among others in a joint venture with Ayla International.

In Malaysia too, the company works as a joint venture and has a market share of 32.5 percent.

The company has models in the compact-car segment and is worthy models for the Indian market. For the small car segment it has the Ayla and Sirion, for the SUV segment it has the 7-seater Terios and Cayla.

It is indeed a good move by Toyota to bring Daihatsu to India as it has not been very successful in the compact vehicle segment. Daihatsu might be able to fill that gap for Toyota in India.

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