NAGOYA, Japan -- Toyota Motor is pouring 1 billion reals ($316 million) into a new Brazilian production line for the Yaris, which the Japanese automaker sees as ideally positioned to take advantage of growing demand.
An existing factory in Sorocaba, in the state of Sao Paulo, will house the new line, Toyota announced Monday. The plant's output capacity will remain at just over 100,000 units a year. But the share taken up by the Etios subcompact will be shrunk to accommodate the Yaris, production of which will start as early as July 2018.
The Etios, a mass-market model, and the further upmarket Corolla account for most of Toyota's sales in Brazil. The Yaris will occupy the middle price range.
This is part of Toyota's strategy to bounce back in emerging markets. The automaker previously tried building market share with the Etios and other strategic models, but had trouble striking the right balance between high quality and low prices.
Toyota then turned to Japanese subsidiary Daihatsu Motor, which specializes in turning out low-cost autos. In January, the pair formed an internal company dedicated to selling small cars in emerging markets.
In August, Toyota started selling the Yaris Ativ in Thailand, which starts at the equivalent of around $13,000. This price range makes the model the most affordable sedan offered by Toyota in the Association of Southeast Asian Nations.
Global auto production is projected to reach 112 million units in 2023, up 21% from 2016, according to PwC Japan Group. Emerging-market demand is expected to soar 37% over that span, compared with 3% growth in developed markets, the Japanese arm of the global auditing company said.