Daihatsu not to enter India any time soon

Daihatsu, the other Japanese small car specialist, had been studying the Indian small car market with keen interest and exploring ways to take on Japanese rival Suzuki in what is one of the largest small car markets in the world. But the recent Toyota-Suzuki alliance seems to have put an end to those plans.

Daihatsu is more likely, at least in the near future, to concentrate on the Indonesian and Malaysian markets where it has a good presence. In addition, this will also allow Daihatsu to continue producing cars at current quality levels. Daihatsu's cars are efficient and perform well according to insiders, but they lack the quality levels demanded in our market. And then there's the not-so-small matter of them meeting India's Europe-based emission and upcoming crash test norms. 

As a result, it now appears that Toyota will delve into the small car market itself and will take the assistance of Suzuki and Maruti when it does so. "Suzuki are the masters of small cars in the Indian market," according to Hiromi Fukui, chairman, Toyota Kirloskar Motor, "and we the students have a lot to learn from them".

While plans haven't been finalised yet, it appears that the Japanese companies will share a lot when it comes to platforms, engines and most importantly suppliers, the latter will be the key to successful localisation of quality small cars. It is here that Toyota will get the most help. While we still may have platforms and components from Daihatsu in India, they will, for now, fall under the Toyota umbrella.

Toyota and Suzuki, however, are unlikely to go the Renault-Nissan way. What the two companies share won't be visible or apparent and they may even avoid going head-to-head like Skoda and Volkswagen do.  

What Toyota will also do is set up a dedicated R&D centre in India which, right from the outset, will focus on small cars. Its design studio, which created the Etios facelift, will be upgraded to handle larger projects and Toyota will look at expanding its network as well. 

One thing's for sure. Having burnt its hands with the Etios and its derivatives, Toyota isn't likely to err when it comes to either design or interior quality again. Just how much Suzuki and Maruti help Toyota, however remains to be seen. Interesting times ahead.