Toyota and Daihatsu are working on a low cost car to build in Indonesia for the Indonesian market as well as the ASEAN region. According to reports, the car will be smaller than the low cost Vios-like Toyota Etios that Toyota launched in India recently, which leads me to believe it’s likely to be a hatchback. The car will be priced the equivalent of 800,000 to 900,000 yen in Indonesia, which translates to about RM29,800 to RM33,600.

To support this new vehicle, Daihatsu will invest as much as 20 billion yen (RM746 million) in Indonesia (not including land acquisition) to build a new factory with a 100,000 car annual output, of which about 70,000 will be used by Toyota.

The factory will boost Daihatsu’s current manufacturing capacity from 330,000 units a year to 430,000 units a year. It will have an initial capacity of 50,000 units a year. It will be located in the Kawasan Industry Suryacipta in Karawang Timur, Jawa Barat. Expected to be ready in end 2012, the new factory will handle stamping, welding, painting and assembly.

Things are definitely changing for Indonesia. Daihatsu and Toyota used to build only cars like the Avanza and the Innova for the Indonesia market. There is a Daihatsu Sirion currently sold in Indonesia but it actually uses our Perodua Myvi’s styling and is built in Malaysia by Perodua and imported into Indonesia. Deals like this might just end with Daihatsu having additional capacity for monocoque low cost cars.

Everyone over here is curious as to what this new low cost car might be, especially what kind of car and bodystyle. Word is that it will be based on a new minicar Daihatsu will launch in Japan in summertime this year with a targeted claimed fuel economy of 30km per litre. The Daihatsu e:S Concept (shown above) comes to mind, but it could also just be a Indonesian-ised Perodua Viva.