Toyota, Daihatsu to form joint company for emerging markets

Toyota Motor Corporation and its fully-owned subsidiary Daihatsu Motor Co plan to form a company that will be responsible for compact vehicles for emerging markets, from product planning to production. Last month, Autocar India reported that Toyota was planning to take the help of Japanese small carmaker Daihatsu for production and sales of small cars in India. 

The new company is likely to be set up in January 2017. The objective and outline of the new entity is to develop and launch competitive compact vehicles ― based on Daihatsu's approach to manufacturing affordable, high-quality products ― for emerging markets, in which the potential for growth is high. However, competition in the segment is intensifying.

While Daihatsu will basically be responsible for unified development, procurement and production preparation for compact vehicles for emerging markets based on ‘DNGA’, a Daihatsu vehicle architecture now being defined, Toyota will support these efforts by providing knowledge and resources.

Toyota and Daihatsu will jointly formulate and share product and business plans and also put their existing production bases to mutually effective use. As such, the company will be positioned differently from the so-called "companies" of the product-based in-house company system Toyota introduced to innovate its work processes in April 2016.

Explaining one of the benefits of this initiative for Toyota, its executive vice-president Shigeki Terashi said, "With the establishment of the internal company, Toyota intends to learn the very fundamentals of Daihatsu's competitiveness and change the way we work."

Daihatsu president Masanori Mitsui said, "We will further advance our knowhow cultivated in the manufacturing of mini vehicles and be a Toyota Group driving force, not only for mini vehicles, but also for compact vehicles for emerging markets. For Daihatsu, this initiative represents an important opportunity for enormous and sustainable growth. Separately, both companies confirmed today that Daihatsu will continue to take the lead in the development of the Daihatsu brand."