ROME - Toyota aims to double its market share in Europe to 6 percent. The Corolla, its first car designed for European tastes, is expected to contribute substantially.
'We not only target 600,000 cars for the year 2000, but we have a stated objective of 800,000 for 2005,' said Alan Marsh, Toyota Europe's vice-chairman, on the eve of the Corolla's launch.
'It means we have to put every effort into retaining our current customers and steal away more from other makes, which is, of course, ambitious,' said Marsh.
The maker's first quarter sales were up 17 percent against a 2 percent drop in the overall market.
Toyota's expansion plan has three elements:
Increased production in Europe
Products developed for European tastes
De-centralized marketing of its cars.
To raise output, Toyota is considering a new European factory to build a small car. It will also increase the capacity of its UK factory.
'But it is purely speculative to assume that we will build a factory in northern France, near Lens,' said Marsh. He said other possibilities included Spain, eastern Europe, the UK and even another French location.
Toyota will raise capacity at its Burnaston, UK, plant from 100,000 to 220,000 units soon. The company will invest £200 million ($326 million) in a second assembly line there, which will build the Corolla beginning in 1998. The factory cost £800 million when it was set up in the early 1990s.
'The investment is relatively low, as is the small increase in the workforce (by 500 to 3,000), since we had planned our central resources - such as the paint shop - in Burnaston with future growth in mind,' said Marsh.
Until UK production starts, all Corollas will come from Japan. Later only sedans and wagons will be imported.
Toyota will decide next year whether to build a second car aimed at European consumers. It would be smaller than Toyota's current Starlet.
'The project is still under development, but we will show a concept study for such a car in Frankfurt,' said Marsh. 'It is a feasibility study for this project, which is likely to be signed off within six months. Approval for production may be expected sometime next year.'
Production would therefore begin about 2000.
Marsh emphasized that such a small car was in line with Chief Executive Hiroshi Okuda's belief that Toyota should build cars that appealed to local tastes.
Until the Corolla, all Toyota cars sold in Europe were designed in Japan with only minor adjustments for the European market.
The Corolla is only the first step towards more freedom for the company's European operations. Another is the increased independence of Toyota's EPOC design center in Brussels. It has had only an advisory role, but from now on it will be allowed to offer European design proposals in competition with Toyota's main studio in Japan.
Toyota believes it needs two models unique to Europe and a clearer image for them. In common with other Japanese makers, Toyota now finds it hard to claim its cars are of superior quality to European makes. It is working on a pan-European advertising campaign.
Toyota Europe is also being gradually reorganized. The number of Japanese managers will fall by around 20 percent as 'we address the market with more local European staff and management,' said Marsh.
The London office's activities will be integrated more closely with those of the Brussels headquarters. Brussels will have responsibility for all marketing issues.
Toyota's sales offensive will receive a boost when the European Union lifts import quotas on Japanese cars in 1999.
'In certain markets, these (quotas) were a handicap,' Marsh admitted.
In Spain Toyota is a marginal player because it is allowed to sell only the UK-built Carina E in any significant numbers.
Jacques Calvet, chairman of PSA/Peugeot-Citroen, wants to extend the lifetime of the quotas, but other automakers have been quiet on the issue. Toyota is more concerned about other European legislation, such as tougher fuel-consumption and emission rules. Toyota has not announced any advanced engines for its cars sold in Europe, but Marsh said the company will be ready when necessary.
'Toyota is world leader in alternative engine technologies such as lean-burn engines, hybrid power systems and direct fuel injection,' he said.
'But in a way, we are a conservative company, so we prefer to wait until our systems are absolutely proven and needed.'