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The boss of Toyota says his company will not engage in a price war with Nissan by launching a budget car brand to compete with Datsun in developing markets.

Toyota Motor Corp president Akio Toyoda told Reuters his customers expected a certain level of reliability from Toyota vehicles, and insisted he had no intention of boosting sales at the expense of vehicle quality.

“When we think about what customers value in our cars, it’s reliability,” Toyoda said. “We won’t risk sacrificing quality simply to meet a certain price range.”

The news follows last week’s announcement from Nissan that it would launch a range of low-cost vehicles under the reborn Datsun name in India, Indonesia and Russia in 2014.

Toyoda admitted his company was not equipped to make an ultra cheap car.

“To grow sustainably, we need to make a certain level of profit on cars, no matter how big or small they are,” he told Reuters.

“Does Toyota have the ability to make cars for 500,000 yen ($5800) like Tata Motors? I don’t think so.”

Toyota currently manufacturers and sells the compact Etios sedan in India for approximately 400,000 rupees ($7500), although it is still considered too expensive to compete with market favourites like Maruti Suzuki.

German rival Volkswagen is reportedly more open to introducing a budget brand, with the group’s research and development chief admitting there is a market in emerging countries for a model in the 5000 to 7000 euro ($6300 to $8900) range.

Volkswagen R&D boss Ulrich Hackenberg told Germany’s Auto Motor und Sport the company was considering an entry-level vehicle at the bottom end of that price range under a new brand name.

“Here you really have to closely look at what [features] can be done away with,” he said. “Those cars would not be sold under the name Volkswagen, more as their own brand.”

Hackenberg put no timeline on when the cut-price car could hit the market.

  • mattyman

    What happened to Daihatsu? They seem to have been forgotten, they only have 2 models, Sirion (popular with rentals) and the Terios. Both are quite aged now.

    • Gat

       Daihatsu is ok, they still have competitive models, just not available in oz market.

    • JHP

      they do have daihatsu still, but its only available in japanese market.
      they stopped selling in oz long time ago, and they recently retreated from eu market, coz of the rise in yen value.

      • Noddy

        I always liked Daihatsu. Reliable, cheap, very fuel economical surprise surprise because of low weight!

  • Golfschwein

    It seems puzzling. Do we really need to go lower than the respective companys’ Toyota, Dacia and Skoda brands? I wouldn’t be insulting these markets. They want what we want.

  • JamesB

    Wait a minute. Isn’t Scion like an entry-level Toyota brand?

    • horsie

      Yes in the US,  but its more of a youth brand than a budget brand.
      had in other countries. For example the car we know as the Rukus is branded Scion. however the Yaris is Toyota.
      Foreign car companies had (not so much now) a much stronger stigma than other markets.

  • Bachman Turner Overdrive

    Nissan already make low quality, unreliable cars… What? They want to plumb new depths with Datsun. Sorry, they have plumbed new lows of quality and reliability with Renualt.., just at a higher price.

    • Guest

      Agreed, Nissan needs to try turn around their existing brand before trying to re-establish another one.

    • Cc

      Infiniti’s are the Japanese Nissans..

      The rest is almost completely Renault trash

  • Altezza

    Mr Toyoda is right, there is no absolute need to establish cheap brand for the expense of reliability. For a brand that was well known for reliability and the parent company of luxury brand Lexus, no way Toyota would ruin their image for establishing a cheap brand.

    I think that Nissan on the other hand…while their idea for bringing Datsun name alive was a great idea, but using Datsun name for cheap cars was a wrong move. They should use Datsun as a youth brand, just like Toyota done to US only Scion brand.

  • http://www.facebook.com/people/Batsosi-Busang-Motsepeng/100002297622666 Batsosi Busang Motsepeng

    Toyota already does with a third world trash like Etios.