BLOG: In Daihatsu deal, Toyota zigs while Detroit zags

Toyota President Akio Toyoda said he would build Daihatsu into a truly global brand.Photo credit: Reuters

TOKYO — Toyota Motor Corp. is zigging while Detroit zags on a key question: How important are small cars and emerging markets to determining future winners and losers?

Toyota last week doubled down on its bet on Japanese minicar maker Daihatsu, agreeing to buy the remaining 48.8 percent of the company it doesn’t already own.

President Akio Toyoda said he would build Daihatsu into a truly global brand to give Toyota Motor an even stronger foothold in small cars and deeper inroads into emerging markets, which are expected to drive long-term demand growth for automobiles.

Toyoda said he wants to build Daihatsu into a brand like BMW’s Mini and wagered about $3 billion — the price Toyota expects to pay for Daihatsu’s outstanding shares.

Compare that with decisions last week in Detroit.

Fiat Chrysler Automobiles CEO Sergio Marchionne said the market has undergone a “permanent shift toward SUVs and pickups.” He then said the company will stop building the midsize 200 and compact Dodge Dart cars.

At the same time, Ford Motor Co. decided to pull out of Indonesia, one of the most populous countries on Earth and a promising growth market.

FCA and Ford aren’t completely giving up on small cars and emerging markets. FCA hopes to source small cars from a partner company. And Indonesia is still just one of a host of developing nations. Ford is still deeply entrenched in Thailand, for example.

But Toyota’s move serves warning to Detroit about tunnel vision.

The world’s biggest automaker is dipping into its deep cash box to go on the offensive. And its strategy banks on broadening its reach — through more small cars in fast-growing markets. Will rivals in Detroit regret pulling back into well-tried comfort zones?

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