How Toyota failed to understand the biggest market in the world

Article by Christian A., on October 30, 2012

Toyota Motor Corp. said that its underperformance in China was due to the anti-Japan protests caused by a territorial conflict. According to sources and dealers, Toyota failed to understand the biggest market in the world. They said that China’s budget-conscious consumers didn’t embrace the Yaris subcompact, which was launched in 2008.

This model was targeted at increasing brand loyalty and pushing China sales of a million units annually. The Yaris, which was successful in other markets, also didn’t do well in appealing to China's new emerging middle class. Several dealers and insiders said that the Yaris didn’t have 'daqi', which the Chinese refers to as 'road presence'.

When compared to Nissan Motor Co Ltd's more expensive Tiida, the Yaris seems cramped and unexciting. Thrifty first-time buyers considered the Yaris to be over-priced, priced from 87,000 yuan ($13,900), 55% higher than General Motor's Chevy Sail.

According to January-August records, Yaris sales in China averaged only 1,250 a month. This was before the protests in China against Japanese products. In comparison, Nissan sold 12,000 of its Tiida subcompacts a month and GM sold 17,000 Chevy Sails.

The third-generation Toyota Yaris’ launch pushes the model’s continuing European success story even further. The model has constantly possessed a segment share of more than 5% for the past decade. Toyota Yaris is behind the company’s sales growth all over Europe. Consequently, it raised the brand’s image to a whole new level. Moreover, it became a crucial backbone of the industrial operations of Toyota in Europe.

Having a share of 26 percent of the whole market, the model is able to go up against other vehicles in the small car classification. Its share holds over four million sales per annum. That being said, Yaris continues to be one of the most sellable autos in the European car market. Gasoline engine automobiles represent more than two-thirds of the segment. This makes gasoline engine cars prevail in that particular segment.

The establishment of a variety of new car models causes the increase in decentralization within the B-segment for the past few years. Examples of these types are the B-multipurpose vehicles and the Sports Utility Vehicles (SUV). Even so, the hatchback continues to be the most valuable and top-grossing in its segment, raking in millions. It holds 50 percent of the overall sales.

Rising fuel price rate and Carbon dioxide taxation bring about the reduction of buyers from other segments. Due to this, B-segment sale stability is projected to stay intact for the coming years.

The second generation model gained recognition for its engine efficiency, resilience, spaciousness, flexibility and urban environment drivability. The latest model combines its developed features with the assets of the preceding generation car. Among the developed features are a more energetic and chic styling, a breakthrough in physical quality, an upgrade in economical multimedia connectivity, proficient power plants, cutting-edge drivetrain and better nimble vital to urban driving.

Topics: toyota

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