Why Doesn't Daihatsu Enter the Chinese Market?
4 Answers
Daihatsu's models have not gained recognition in the Chinese market, resulting in dismal sales performance and significant challenges in China. Although it is a subsidiary of Toyota, its brand awareness in China is even lower than that of domestic car brands. Here is a related introduction to why Daihatsu does not enter the Chinese market: 1. Introduction to Daihatsu: "Daihatsu" is the abbreviation for "Daihatsu Motor Co., Ltd." Founded in 1907 in Osaka, Japan, Daihatsu Motor Co., Ltd. has been committed to the development of the small car sector for over a century. It possesses advanced technologies in engines, space utilization, vehicle safety, and environmental protection, making it a globally leading small car manufacturer, often referred to as the "small car expert." As a member of the Toyota Group, Daihatsu specializes in producing small cars with low fuel consumption, resource efficiency, and compact space. It aims to become a "truly international enterprise" and actively promotes globalization. 2. Purpose: The joint venture between Japan's Daihatsu and FAW primarily focuses on small cars, with technical levels similar to Suzuki. However, due to its lack of brand recognition, its market performance has been mediocre. The purpose of introducing Daihatsu cars was mainly for civilian use. After adding seats, these vehicles could serve both as delivery vans and passenger cars, providing an alternative to sedans for urban and rural residents at the time.
It's quite interesting that Daihatsu hasn't entered the Chinese market. We've researched this. Toyota positioned it to focus on the small car market in Southeast Asia, while China's streets are now filled with new energy vehicles and SUVs. These small gasoline-powered models simply aren't appealing here. Last year, small car sales in China plummeted by over 30%. Wouldn't entering now be asking for trouble? Moreover, Toyota itself has started engaging in price wars in China - how awkward would it be for its sibling brand to come and compete for the same market? Add to that domestic new energy microcars like Wuling and BYD that have firmly captured the market, offering models at 30,000 RMB with fast charging - how could Daihatsu compete? Finally, don't forget policy barriers - the dual-credit system has essentially blocked fuel-efficient small cars, as Suzuki's exit a few years ago clearly demonstrated.
Let me be honest, Daihatsu's focus on Southeast Asia makes perfect sense. In places like Thailand and Indonesia, people love rugged and reliable gasoline cars, and Daihatsu's Terios and Ayla are selling like crazy there. China? The subsidy policies are all tilted towards new energy vehicles, and building a charging network alone requires tens of billions in investment. Their R&D budget last year was just a fraction of Toyota's—how could they afford such a money-burning game? Besides, Toyota itself already has over a dozen factories in China. Bringing Daihatsu in would be like the left hand competing with the right! Just look at the dismal sales of second-tier Japanese brands like Mazda in China—Daihatsu's decision-makers must have crunched the numbers and realized it's not worth it.
This needs to be viewed from the perspective of product strategy. Daihatsu's best-sellers in Southeast Asia are all compact cars with engines below 1.3L, but Chinese consumers have long since upgraded. Nowadays, with 100,000 yuan you can buy a hybrid SUV like the Song PLUS—who would still look at hatchbacks? More crucially, there's the dual-credit policy: last year, Toyota China had to pay 2,000 yuan per vehicle sold to purchase new energy credits. Daihatsu's entire lineup of small-displacement cars simply can't handle that cost. Then there's the channel issue—rebuilding a 4S dealership network would require at least 2 billion yuan in investment. With the current fierce price wars in the auto market, it would take at least five years to break even. Honestly, expanding production at their Indonesian plant would be wiser than trying to break into China.
