June 14, 2017 3:11 pm JST  (Updated June 15, 2017 10:31 am JST)

Daihatsu eyeing joint car production with Toyota in Thailand

Move would mark the minicar maker's entry into the Southeast Asian country

A Daihatsu showroom in Shiga Prefecture

Osaka -- Japanese minicar maker Daihatsu Motor is looking to work with Toyota Motor in Thailand to develop small cars for emerging markets, the company's president said in an interview in Osaka on Wednesday.

"We are looking to undertake joint production in Thailand," Daihatsu President Soichiro Okudaira told the Nikkei.

Okudaira, a former Toyota executive, took over as president last week.

The project will make use of Toyota's production and development facilities. Okudaira did not give details about the type of models to be produced or when they would be released.

The move will mark Daihatsu's first foray into Thailand. The company already produces cars in Indonesia and Malaysia.

Soichiro Okudaira

Asked about the joint development, Okudaira said: "We consider the ASEAN region to be the base of the development." He also named Thailand as one of the focus areas, in addition to existing production locations such as Indonesia.

"We are currently discussing with Toyota on the outline of the development, including what type of components we will need, and where we can procure them from," the CEO said. 

Daihatsu has laid out a target of expanding production by 70% globally to 2.5 million units by fiscal 2025.

"Not only [do we need] to make the most of existing production sites such as Japan, Indonesia and Malaysia, we will need to explore potential locations where we could transfer our car-making expertise," Okudaira said. He also mentioned that the carmaker is keen to invest where it is essential to expand production capacity.

Originally, Okudaira was a Toyota engineer developing cars for China and other parts of Asia. Daihatsu's leader insists his new company has an advantage over Toyota in its strong presence in the compact car market it has established through years of selection and concentration of the business.

"Toyota expects Daihatsu's experience could bring something fruitful to the collaboration," Okudaira said. Speaking about India as a potential market, "The market has high potential, but it won't be that easy to expand into a market where Suzuki Motor has built a such strong presence" Okudaira said. "I'm not in a position to talk about the Toyota-Suzuki alliance, but for the time being, we will work with Toyota to explore opportunities in India."

(Nikkei)

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