Daihatsu Australia closes its doors

TOYOTA Australia has denied the winding down of its Daihatsu operations will now pave the way for the US-inspired Scion "youth" brand.

Toyota Motor Corporation Australia’s sales and marketing director, David Buttner, admitted that Toyota was still working on a feasibility study of the sassy Scion brand, but the withdrawal of Daihatsu from Australia was a completely separate issue.

"The withdrawal of Daihatsu is not related in any way whatsoever to Scion," he said.

Toyota Australia late yesterday announced it will axe the Daihatsu brand from Australia, which is the only country to lose the marque.

In all, 79 dealers are affected - 44 of them are also Toyota dealerships but only two are stand-alone dealers. They are in Bunbury, Western Australia and Maroubra, Sydney.

Mr Buttner said Toyota regretted the decision but the extremely competitive local light car market had forced its hand.

"The highly competitive sales environment and the future outlook for the Daihatsu brand in the small and light car market does not make continued operations viable," he said.

"When Daihatsu first entered the light car market there were 10 competing brands and now there are 23, each fighting a market segment where margins are historically low."The decision comes after intensive study of Daihatsu’s small car operations and its forecast performance here, none of which were optimistic.

"We conducted a thorough review which examined matters including the local sales environment, customer preferences, increased competition, financial outlook and recent volume trends," Mr Buttner said.

"This review determined that the long-term viability of the Daihatsu business was limited in the Australian market."Mr Buttner said the decision "was not easy to make".

"Daihatsu has been a part of the Australian motor industry for more than three decades. Business logic, however, must outweigh sentimental attachment," he said.

Daihatsu Australia’s operations will start winding down from today but the brand will continue to be marketed until March 2, 2006. Warranty, servicing and parts will be honoured by Toyota dealerships under a 10-year agreement.

"Of course, there may be some (buyer) repercussions because of this announcement," Mr Buttner said.

"But we will support our customers wholeheartedly in the future. Beyond April 2006 we will have an appropriate number of authorised service outlets organised."Daihatsu currently has about 3000 vehicles in stock nationally.

Mr Buttner said the remaining cars would not be rebadged and sold as Toyotas and that it would be up to the marketplace to determine price points.

Daihatsu globally is a division of the Toyota Motor Corp, the world’s second-largest automotive company.

In 1998 TMC acquired 51 per cent of Daihatsu and in 2000 Toyota Australia took over distribution of the brand in Australia.

Daihatsu Australia was initially established in 1975 as a joint-venture between the then Thiess Toyota and the NSW state distributor York Toyota, shipping company Nichimen and by Daihatsu Motor Co Ltd.

Daihatsu took full advantage of regulations that enabled it to import light trucks with purpose-built fully built-up bodies. The technique revolutionised light truck quality in Australia and encouraged a far more competitive local body building industry.

Daihatsu was largely responsible for introducing light four-wheel drives to Australia, a trend picked up and expanded into the now booming "soft-roader" segment of sports utility vehicles.

There are about 138,000 Daihatsu cars and trucks on Australian roads and last year it sold 5016 vehicles - just 0.05 per cent of the total local market.

Its best year was in 1995 when it sold 7800 vehicles.

The marque is made up of Charade, Copen, Delta truck, Terios four-wheel drive and the just-launched 1.3-litre Sirion, which has failed to ignite sales.

Mr Buttner said the Daihatsu business had been marginal for several years but declined to say how much money it was losing.

"It had not been significant but enough to make us look closely at it," he said.

Nor would he comment on a suggestion that the Australian market was swamped with too many brands, all trying to make money on very slim profit margins.

"Certainly when you look at the Australian market at the moment we have 44 brands competing in a market of less than one million vehicles.

"If you look at the segment Daihatsu competes in there are 23 brands represented.

"It’s certainly a very competitive market but whether it’s too many or not it is not for me to judge."Daihatsu owners will be advised by letter of Toyota’s decision. Advertisements will appear nationally on Saturday and owners can obtain information through a customer hotline on 1800 457 470 or from the Daihatsu website on www.daihatsu.com.au