Toyota Motor Corp. plans to market a new compact car, made specially for India, that will retail for about 500,000 yen ($6,250).
The car is set to hit the market in 2016 as part of a strategy to counter low-priced vehicles offered by other makers, sources said May 23.
The auto giant will not sell the car under the Toyota brand name. Instead, a new brand name will be created solely for the vehicle, they said.
Toyota plans to increase annual sales of the car to about 500,000 units in the first three years, the sources said.
Toyota introduced its Etios cars in India in 2010. However, even the cheapest model is priced at around 800,000 yen. Other makers are selling less expensive models.
For example, the Nano, manufactured by Indian carmaker Tata Motors Ltd., is priced at less than 300,000 yen, making it the world's cheapest car.
Toyota decided it needed a car that costs less than the Etios.
Until now, Toyota has been regarded in India as a manufacturer of pricey high-class cars.
The new brand is intended to foster an image of an economy minded car for the masses.
Toyota is trying to expand its customer base from high-income earners to those who are buying a car for the first time.
The new compact will feature safety features and environmental friendliness that are common to all Toyota models based on lower-priced, locally produced auto parts.
The interior will be basic, with manually operated windows.
Toyota currently manufactures five models in India, including the popular Corolla and Etios. It produced about 200,000 units in 2012, and plans to increase production to around 300,000 units in 2013.
The compact will be manufactured at a new factory in Hosur, in Tamil Nadu state, southern India. The facility will be Toyota’s third factory in the country.
In a related development, rival Nissan Motor Co. plans to revive the brand name Datsun for emerging economies as early as 2014. It also plans to sell a Datsun retailing for about 600,000 yen in India the same year.
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