Toyota may rope in Daihatsu to boost Indian small-car presence

Japan's Toyota Motor Corp, struggling for a stronger foothold in the affordable end of India's car market, and has sought to rope in its mini-car affiliate Daihatsu for help.

A similar partnership between Toyota and 51-per cent-owned Daihatsu Motor Co has proved successful for years in Indonesia, Southeast Asia's biggest car market.

Toyota's executive vice president Yasumori Ihara earlier this year asked Daihatsu to help design affordable small cars suited to buyers in India, where Toyota models tend to come with a relatively high price tag, according to a Reuters report citing four unnamed Daihatsu executives and a Toyota executive.

The request could see Daihatsu take the lead in developing no-frills cars that would be sold under the Toyota brand and through its sales channels in India.

Unlike in Indonesia, Daihatsu currently doesn't sell cars in India.

"Toyota is struggling big time in India" largely because it uses relatively "high-quality, high-spec" components for its cars there and failed to make use of cheaper parts available from indigenous local suppliers, a senior Daihatsu executive told Reuters.

In contrast, rivals such as Suzuki have set up comprehensive local supply chains for low-cost parts in India.

"We're currently looking extensively into why a strategic no-frills car like (Toyota's) Etios doesn't sell well in India ... as part of an effort to ready ourselves in case we're asked (to develop low-cost cars) formally by Toyota," another senior Daihatsu executive said.

There are no specific details of how Daihatsu would help Toyota's India effort.