Sales target for new Yaris very ambitious

The new Yaris is the eighth model under the project, which has already taken a step towards the second phase. The first eco-car model, the Nissan March, was launched in 2010. The new Yaris is not the third generation model sold in Japan and Europe from 2011, but the one revealed at the Shanghai Motor Show in April. This Yaris is planned to be one of Toyota’s strategic models for emerging markets, just like the third-generation Vios, launched in Thailand in March. In other words, the new Yaris is essentially a hatchback version of the new Vios. Therefore, this latest Yaris produced in Thailand is expected to be exported not only to other Asean countries but to more than 80 nations around the world – similar to the Vios. 

In Thailand, Toyota has set a monthly sales target of 4,000 for the new Yaris. This is very ambitious, considering the model’s past performance and the current state of the market. This target is more than four times the average sales of the old Yaris between January 2010 and September 2013, while the market share of the old Yaris in the sub-compact segment, excluding eco-cars, has been deteriorating. This share decreased from 7 per cent in 2010 to 4 per cent prior to the new launch, while the model has seen a decline in popularity. 

Even for the eco-car sub-segment, a monthly sales target of 4,000 is optimistic. From January to September this year, monthly eco-car sales were only around 15,000, meaning that the Yaris would have to gain a share of more than 25 per cent of the segment, or 10 per cent of the total sub-compact segment. To achieve this, the model would have to compete for market share with existing eco-car models, especially the top three. The Nissan Almera, the Suzuki Swift and the Mitsubishi Mirage are currently at the top, holding around 24, 21 and 20 per cent respectively of market share. 

Further competition will come from the Honda City and the Vios, both of which equally hold around 20 per cent of market share in the subcompact segment. The launch of the Mitsubishi Attrage in July, and what happened afterwards, can give us a glimpse of how well the new Yaris might perform. In fact, Attrage sales were also targeted at between 3,000 to 4,000 cars, and its launch did stimulate sales in the eco-car sub-segment, up from a low level of around 10,000 in April and May, to around 14,000. Average sales of the Attrage were 2,700 per month, or 18 per cent of the market share. Taking a deeper look, however, sales of the Attrage were partly at the cost of other models, especially the Nissan Almera and the Mitsubishi Mirage. Both had a market share of up to 35 per cent prior to the launch. 

The expansion of the eco-car segment also came at the cost of overall sales in the sub-compact segment, which had been weakening significantly from the first half of this year. It is also noteworthy that a large portion of sales in the eco-car and sub-compact segments this year is a spillover from the First Car scheme last year, which gives the buyer an excise-tax rebate for any order made before the end of 2012. By mid-October, there were still more than 140,000 vehicles yet to be delivered. 

Therefore, potential sales of the new Yaris will also have to be built on other models’ advantage. In the eco-car segment this advantage could account for up to Bt45,000. In contrast to the Mirage, the pricing of the Yaris is not appealing. The entry price for the 1.2 J Eco model is Bt469,000, significantly higher than the cheapest eco-car at Bt380,000. The variant also lacks several basic functions, such as a central lock system or electric windows, which are currently offered in other eco-car models of the same price level, including the Attrage. On top of this, a slightly better Yaris variant – the 1.2 J – is priced at Bt519,000, higher than the weighted average price of all eco-car models sold so far in 2013, at Bt504,599 and Bt506,047 for the top three models. On the other hand, the new Yaris features the biggest dimensions of all models in the segment. This is similar to the popular Almera, which is positioned between the eco-car and sub-compact segments. 

Toyota has long been recognised for its extensive service networks and higher prices in the used-car market. In the end, buyers will decide whether Toyota’s positive brand image will help offset the limitations of the new Yaris. November is surely very exciting. 

 

Kon Thueanmunsaen is a senior analyst at Asean LMC Automotive. He can be contacted at [email protected]