Fighting words were never going to be part of the script in the recent UMW Toyota Motor press conference announcing a fresh investment in Malaysia totaling RM2 billion. Decorum saw to that. But reading into the body language of the Toyota top brass present, you could say they want their crown back.
History has shown that when large corporations go unchallenged over long periods, a defensive mindset sets in and they end up being caught by the ‘hungrier’ chasing pack. The year 2015 was when Honda – with merely a range of passenger car models – toppled mighty Toyota as the sales champion, national brands excluded.
The writing was always on the wall when Honda Malaysia made a gutsy call years earlier to double down on the production capacity (which saw a new plant being opened in 2014), a move backed by investments in human resource, particularly in areas of engineering and localisation – key factors in speeding up product introduction while keeping a tight rein in costs.
The results have spoken for themselves; the new City and Jazz expanded their market shares significantly with more variants and lower pricing, while the HR-V is unchallenged, with Honda being the first among major mainstream players to introduce a B-segment crossover.
‘We’re gunning for you, Honda’
It’s ironic but UMW Toyota is seemingly doing a ‘Honda’. They will build a brand new plant specifically for passenger cars, this will come on-line in early 2019. They will also upgrade the existing plant for their frame-based vehicles (e.g. Hilux, Hiace, Fortuner, etc.) and bump local production capacity to 100,000 units. UMW Toyota estimates that the RM2 billion to be invested will include engineering resources and human capital.
When queried as to why they are doing so. UMW Toyota official repeatedly referred to the objective of ‘increasing competitiveness’. To these ears, it sounded like a tacit admission that Toyota has fallen behind in the game. So we can certainly expect better spec-ed cars with better value, and fresh new models (not just replacements) with quicker introductions following their global unveiling.
While no specific models were mentioned during the briefing, we can also assume that UMW Toyota will finally address the dearth of mid- and compact- sized SUVs in their current lineup; the next generation RAV4 could be assembled here, and most certainly the much anticipated CH-R crossover. Models with Energy Efficient Vehicle status will also be produced at the new plant, so don’t be surprised to see a couple of hybrid models including the next generation Prius C and the hybrid version of the recently-announced Sienta MPV.
What will happen between now and 2019?
No one writes off Toyota. Despite falling behind Nissan in the first quarter this year, an anomaly due to the volume lull between the old and new Hilux changeover (Toyota sells more than 2,000 units of its popular pick-up each month without breaking a sweat), normal service should resume as the production of the pick-up ramps up. If our unofficial data is correct, Toyota actually sold more vehicles than Honda in May. With the funky new Sienta MPV expected to add a few hundred units more to Toyota’s monthly total and the Vios to receive a significant mid-life makeover soon, 2016 isn’t a foregone conclusion as many may predict.
For seizing the initiative, Honda Malaysia has done extremely well for itself, but in the process it has also awakened the giant who won’t take this lying down. As car buyers and eventual beneficiaries, we’ll have to thank Honda (ironically) for more competitive Toyota models in less than three years’ time. There, you have just got to love competition.