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Toyota Eyes $7000 World Car

Automaker plans to find new customers with an emerging-market stripper.

by Bengt Halvorson (2007-01-21)

Toyota is planning a new emerging-market car aimed at budget-minded shoppers in China and Russia, reports AFP, citing a story in Britain's Financial Times. Toyota president Katsuake Watanabe had said to the Times, "The focus is on low-cost technology" for the car, which is expected to undercut Renault's Logan, a venture with Romanian automaker Dacia. The Logan uses Renault/Nissan's global B platform (as the Nissan Versa) but with reduced equipment and a simpler design; the stripped-down subcompact is aimed primarily at emerging markets in Asia, Eastern Europe, and Africa and starts at about $7000.

Toyota says that its competing vehicle in this class, like the Logan, will pass European safety standards. While not designed with Western Europe in mind, the Logan has found some success among budget-minded buyers in several countries. Such models are unlikely to ever go on sale in the U.S., where it would simply not be cost-effective to install the required safety equipment on a vehicle in this price range.

As it stands, U.S. automakers have said that domestically produced small cars are a loss leader. They're looking to China and other emerging markets to produce potential U.S.-market small cars. Just last month, the Chrysler Group struck a deal with the Chinese automaker Chery to build a subcompact model based on last year's Hornet concept.

Watanabe said that Toyota plans to deliver the car at such a low price - presumably at a profit - by radically rethinking the design and production process, incorporating lower-cost materials, and possibly developing new materials for the project as needed.

By entering the emerging-market segment, Toyota has nearly all of the world market niches covered, including in the U.S. This year, the automaker is introducing a new version of its Tundra pickup that looks to be a greater threat than before to what has traditionally been the stomping ground of GM, Ford, and Dodge.

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