The most significant product launch at the Shanghai auto show may turn out to be not a glitzy concept car, high-end luxury sedan or any of the many hybrids on show, but Toyota’s makeover of its entry-level Vios and Yaris models. Even before the escalation of the maritime territorial dispute between Beijing and Tokyo last year hit Toyota’s China sales, the Japanese car maker had been struggling to establish the sort of toehold in the Chinese market for its entry-level models that it has so easily secured elsewhere in the world. The Vios, which Toyota has sold in China for a decade, and the Yaris, introduced in 2008, were priced too expensively for a first car and didn’t have the street cred that Chinese consumers were seeking.
The new versions of both models don’t do too much to improve the price positioning, though rising incomes are bringing the vehicles’ reduced price (low 60,000s of yuan, down from the low 80,000s of yuan) more in line with one year’s average earnings (50,000 yuan–60,000 yuan) — typically what a first-time car buyer pays. Whether the new looks — restyled front and interior, longer body, more aerodynamic shape — are to Chinese buyers’ tastes, the sales will show.
Toyota’s total sales in China last year fell to 840,000, down 5% from 2011’s volume. The company hasn’t broached the million-cars-a-year level since 2009. That is the sales volume it considers the bare minimum — and which the company’s head, Akio Toyoda, set as its goal for 2010 when he ran Toyota’s China business a decade ago.
The new Vios and Yaris are seen as critical to getting sales in China back to that level. Industry scuttlebutt says Toyota is looking for combined annual sales for the two models of 200,000. That is more than eight times as many as it managed last year with the older versions. Geopolitics may still provide a backdrop to Toyota’s sales efforts in China, as it will do for all the Japanese carmakers, but Japan’s industry leader is wagering a lot on this particular spin of the wheel.