Developing Localized Products That Are
“Made by Toyota”
released on May 2011
After gaining confidence with the successful export of the Land Cruiser to Latin America in the mid-1950s, Toyota introduced the Crown to the U.S. in July 1958. Although the Crown was a hit in Japan, its design was not suited for American highways and Toyota would eventually halt passenger car exports to the U.S. in December 1960. Through this setback, Toyota learned that designing cars to suit specific market needs is critical to ensuring success, and accordingly Toyota began conducting repeated tests under local conditions.
Research into local preferences of both interior and exterior vehicle design started in the 1970s, and Toyota’s design capabilities overseas eventually expanded to the U.S. and Europe. In emerging markets such as Southeast Asia, where passenger cars were not common, Toyota recognized the need for a heavy-duty vehicle for both cargo and family use that could be driven on unpaved surfaces. The result was the Kijang minivan in 1977. The Kijang satisfied local preferences as an “Asia Car,” yet still remained affordable in comparison to competing vehicles on the market.
The Innovative/International Multi-purpose Vehicle (IMV) Project in 2002 was the next step in locally producing an inexpensive product with a strong edge. Models developed and produced under the IMV Project, such as the Fortuner SUV, Innova minivan, and new variations of the Hilux pick-up truck, went on sale in Thailand and Indonesia from mid-2004, followed by the Philippines, Malaysia, India, Argentina, and South Africa in 2005. This “customer first and not product first” approach proved popular as customers no longer viewed a locally manufactured Toyota as inferior. Then Senior Managing Director and Chief Asia Operations Officer Akio Toyoda later stated, “IMV’s success indicated that both customers and the market acknowledged the ‘made by Toyota’ concept.”
Toyota would use its combined experience and know-how from the IMV Project when development of the Etios for the Indian market began in 2005. Already aware that it would be impossible to provide an affordable vehicle by merely adapting a global model for local production, Toyota thoroughly exercised the genchi genbutsu philosophy, such as the body engineer conducting research all over the country’s coastal and inland regions to verify areas prone to rusting, and reworked the entire design process so that the Etios could be manufactured locally. To clearly identify and further understand the qualities that customers look for when buying a B-segment vehicle, focus groups were held with 700 Indian customers. By going to such lengths to tailor the Etios for the emerging market, Toyota hopes to not only attract customers who long for the Toyota brand, but also customers who are buying a car for the first time.