| SHANGHAI, April 21
SHANGHAI, April 21 Toyota Motor Corp is
giving its Vios and Yaris models a major makeover for China as
part of the Japanese group's make-or-break move into the
no-frills entry-level segment of the world's biggest autos
Versions of the Vios and Yaris have done relatively well in
the United States, Europe and Japan, "but we have not made
sufficient progress with the car in China," Hiroji Onishi, head
of Toyota's China operations, told reporters during the Shanghai
auto show on Sunday.
"We tried to give (the models) a proper "daqi" stance
typical of what Chinese consumers look for, and we improved fuel
efficiency," he said, referring to a local phrase that Chinese
use for a car's road presence.
The revamps are a key plank in Toyota's fightback strategy
in a market where its sales were battered last year in the
fallout from a row between Beijing and Tokyo over disputed
islands in the East China Sea.
Onishi said it could take Toyota at least a year to win back
business lost to that damaging territorial dispute, leveraging
the new no-frills models.
The re-designs, with the new sedan version replacing the
existing Vios and a hatchback replacing today's Yaris, are a
recognition by Toyota that it misread the Chinese market even
before last year's dispute that halved the company's sales in
September. The Japanese firm will keep the existing model names
for the new cars that should be in showrooms by the end of the
The new cars are critical to Toyota's China strategy as they
are planned as high-volume models to regain momentum in the
market and restore branding after the Yaris fizzled - partly
through a perceived lack of 'daqi' and because it was priced too
The existing Vios, launched in 2002, cost from 89,500 yuan
($14,500), while the Yaris, brought to market six years later,
cost from 87,000 yuan - while annual incomes for many are
50,000-60,000 yuan. Neither car really took off with a new
consumer class of people who now just about earn enough to be
able to afford a car.
THE ELUSIVE MILLION
A decade ago, Akio Toyoda, the founding-family scion who now
heads the group, ran Toyota's China operations and set the
"aspirational" goal of selling 1 million cars a year in China by
2010. It missed that goal in 2010 and again in 2011. In
September last year, days before the diplomatic dispute with
China, Toyota said it aimed to sell up to 1.8 million cars
annually in China by 2015.
The company's 2012 China sales fell nearly 5 percent to
840,000 cars, and Masaki Taketani, Detroit-based research
director at consulting firm IHS Automotive, doesn't see sales
topping 1 million until at least 2015.
Much will depend on what Chinese drivers make of the Toyota
models' design, style and price makeover.
"This is a live-or-die car for us," a senior China-based
Toyota executive told Reuters ahead of the Shanghai show.
Crucially, General Motors' Chevrolet Sail, a China
entry-level car it launched in 2010, starts at around 56,000
yuan. GM sold 218,000 Sails last year at an average of more than
18,000 a month. Sales of the Yaris averaged around 1,250 a
month, while average monthly Vios sales were just 730.
Toyota China's Onishi said the remodelled no-frills cars
would use more parts sourced locally in China to keep down the
manufacturing cost, but it would be difficult for Toyota to
bring down selling prices below 60,000 yuan. Instead, it would
aim to compete in the same price range as the Nissan Motor
Sunny, which starts in China at 82,800 yuan.
"That said, we're still discussing whether we could come up
with a more strategic pricing," Onishi added.
IHS' Taketani said The revamp would be a test case for
Toyota and other Japanese companies battling in China.
"This is a must-win car for Toyota," he said, predicting the
Japanese group would do well to sell 80,000 of the new cars by
2015, well short of the 200,000 a year he believes Toyota is