Toyota LogoToyota is working on a compact car to sell in India and reports say that they’ve set a target price tag of US$5,000 which is about 2.4 lakh INR or RM 17,600. This is about double the price of the Tata Nano’s expected retail price. The new compact car is set to hit the Indian roads in 2010, where it will also be produced for export to emerging countries such as Brazil, which has been referred to as the world’s biggest emerging market.

Although some of the media abroad have reported that the car will be based off a Daihatsu which is becoming rather common practice for the two Japanese automakers lately (Toyota owns a majority stake in Daihatsu), apparently Toyota Kirloskar Motor India managing director Hiroshi Nakagawa found it important to say that the new car will be very much a Toyota development, not a Daihatsu. Hmm, is there something wrong with Daihatsu’s reputation in India or something?

Nakagawa also declined to comment on the reported US$5,000 price tag, only saying that it would be in a different class than the Tata Nano – presumably this means it’s not as barebones as the Nano and will be higher up in the food chain.