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Toyota reveals mid-term growth strategy

Toyota has revealed that diesel is a major part of its mid-term growth strategy.

Speaking at the launch of the new four-cylinder 148bhp and 175bhp D-4D engines, Matt Harrison, marketing director of Toyota GB, says: "The least powerful of these two engines will be seen first of all in additional models for the Toyota Avensis range. These go on sale in the UK from July 1.

The 175bhp unit will be introduced in the UK in 2006 and into other models such as the RAV4 and Lexus models in the future.”

Toyota revealed that in the key volume sectors it is achieving strong petrol sales but weak diesel ones.

The company said that it would address this “imbalance” by introducing the new 2.2-litre D-4D engine into the Avensis. This will be the first step by Toyota in a two-year strategy to grow its share of diesel sales in the key market segments of supermini, lower medium, upper medium, off-road and MPVs.

Harrison added: "We are staggering the introduction of these engines because the growth of diesel sales in the UK’s upper medium segment over the last three years have been for models with mid-power 121-150bhp engines.

Engines above 150bhp have consistently only accounted for around 5% of sales. With our current 2.0-litre D-4D 114bhp engine, which will continue in the Avensis line-up, we have only been able to compete in around one third of the upper medium diesel market. By introducing the 148bhp derivative it now gives us access to 95% of the market opportunity.”

Toyota has decided to delay the introduction of the 175bhp engine until next year when the Avensis range undergoes minor styling and specification changes at the same time.

Toyota GB says the overall diesel engine passenger car sales in the upper medium sector are now 258,000 units a year or 56% of total segment sales. Overall diesel sales have grown 31% in the sector since 2002.

Harrison says: "Our broad objective this year is to sell 24,000 Avensis models in the UK, a little less than last year.

“Next year we expect, even after the introduction of these diesel engines, to see sales of 22,000 units. The reducing numbers are due to the declining new car market in the UK. The upper medium sector is difficult because it has become fragmented. You have volume manufacturers at one end of it discounting their products with special price package fleet sales, which we will not compete with, at the other end you have BMW and Audi introducing premium brand models such as the 3 Series and A4.

"We also limit our Avensis daily rental business to around 1,000 units each year to keep our residual values high and we expect the cars to retain at least 40% of their new price over the traditional three year period - just behind the new VW Passat."

Toyota will continue to offer the existing 2.0 D-4D engine on the entry Avensis T2 and volume selling T3 grades. The new 2.2 D—4D will be introduced for saloon and hatchback T3-S, T3-X, T4 and T Sprit grades and on all Tourer models.

Prices for the new Avensis 2.2 D-4D models range from £18,145 to £22,145.

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