The car Toyota really needs | Opinion

Toyota dominates the new car market thanks to an expansive line-up of models that spans from the pint-sized Yaris hatch to the jumbo Toyota LandCruiser.

But there is something missing, and its absence puts Toyota in danger of losing its stranglehold on the new car market as it undergoes radical change.

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Chinese brands are on course to secure three spots inside the top 10 selling brands, with the likes of Chery and GAC looking to make it four or even five in the coming years.

How are they doing this? The same way Toyota has achieved its current dominant status — offering very affordable vehicles to introduce new customers to the brand and then trying to keep them hooked for life.

Just look at the entry price points for the leading Chinese brands, BYD has recently introduced the $23,990 electric Atto 1 (known as Seagull overseas), MG has the even cheaper $21,990 MG3 and the GWM Haval Jolion starts at just $26,990.

Toyota’s cheapest passenger car is the Yaris, with the pint-sized city car starting at $28,990. That doesn’t include on-road costs, so buyers are spending more than $30k to get a Toyota into traffic, compared to MG’s drive-away pricing for the MG3. Even comparing the like-for-like MG3 Hybrid against the Yaris, the MG costs just $28,888 drive-away — so cheaper than the Toyota even before on-road costs are added.

Which means the missing piece in the Toyota line-up is a more affordable offering, a gateway vehicle that will attract first-time new car buyers and get them accustomed to the Toyota way of life.

This is what vehicles like the Yaris, Echo, Starlet and even the Corolla have done over the decades. Hyundai used the same tactic with the Excel and Accent, as did Ford with the Laser and Fiesta, Honda with the Jazz, City and Civic, and Kia with the Rio and Cerato. But as brands become more established it can be harder to maintain that razor-sharp price at the bottom of the range.

Making the Yaris hybrid-only was good for the brand’s image and helped with the New Vehicle Efficiency Standards (NVES) but it did drive the price higher. But it also likely pushed Toyota out of the reach for many first-time buyers, buyers that would have bought a Yaris and been inducted into the Toyota eco-systems in years gone by.

Perhaps Toyota can leverage its relationship with one of its Chinese partners, BYD or GAC, to create an all-new, more-affordable model to sit underneath the Yaris. The new GAC Emzoom is a very impressive small SUV for, again, less than the cost of a Yaris Hybrid. 

Toyota is obviously not in an immediate danger of dramatically losing marketshare, but there is clearly a hole in its line-up that it should be able to fill.