Toyota And Daihatsu To Form ‘Emerging-market Compact Car Company’

It will be officially formed on January 1, 2017

Japanese carmaker Toyota is one of the world’s largest automotive firms. It has its products on sale in most of the established and emerging automotive markets around the world. To cater to and compete in emerging markets, Toyota will form an internal company, called Emerging-market Compact Car Company (EmCCC) with it’s fully owned subsidiary, Daihatsu. As the name suggests, the company will place utmost priority on emerging automotive markets across the globe. The company will also work towards introducing competitive cars based on Daihatsu’s approach of manufacturing affordable and high-quality products.

Toyota says that under this newly formed company, there will be three separate divisions: Emerging-market Compact Car Product & Business Planning, Emerging-market Compact Car Product Planning and Emerging-market Compact Car Quality Planning. Even the already established Toyota Motor Asia Pacific Engineering and Manufacturing Ltd. (TMAP-EM) will be renamed to Toyota Daihatsu Engineering and Manufacturing Co. Ltd. (TDEM) and internally moved to fall under EmCCC. TDEM will become responsible for supporting the production of Daihatsu-centered compact cars.

The primary aspect on which the Emerging-market Compact Car Product & Business Planning division will focus on will be to conduct overall planning for products and business operations, including making proposals for Toyota-brand vehicles portfolio for relevant markets. The other two divisions will be responsible for final product development and quality for Toyota-brand vehicles.

Once the company is formed, current Daihatsu president, Masanori Mitsui will be appointed chairman and, Toyota managing officer, Shinya Kotera, will be appointed president of the new internal company.

This formation can potentially lead to a dominant role of the Japanese car firm in emerging car markets like India. Here Toyota doesn’t have products to compete in many segments, such as a premium hatchback, a sub-4 metre sedan or even an entry-level hatchback. All these segments are hotly contested and form a major chunk of the top 10 selling cars in the country month-on-month. Toyota needs to be more aggressive in the Indian market and with the formation of the new internal company, a great platform will be laid for the Japanese auto giant to flex its muscles further.