Toyota GT-86 and Subaru BRZ ASEAN Introduction
by hans | December 10, 2011 4:03 pm
The local blogosphere and online forums are abuzz with news that the Subaru BRZ will be coming to Malaysia next year. This author was also present at the interview with the regional distributor of Subaru, Motor Image’s Group Chief Executive Glenn Tan, representing NST-CBT when he made that comment (and even got it in recording) regarding the Subaru BRZ’s introduction in Malaysia. We think that Glenn’s comments may have been misread and we want to set the record straight. Glenn’s comments need to be taken in the right context, because he never did confirmed anything regarding the BRZ’s introduction in Malaysia, let alone confirming that the BRZ is coming to Malaysia by 2012.
At the recent 28th Thailand International Motor, Motor Image hosted a media launch event for the Subaru XV, which will be assembled at Motor Image’s parent company Tan Chong Group’s Segambut assembly plant. You can read more about that story and our brief driving impression at tomorrow’s New Sunday Times motoring pullout Cars, Bikes and Trucks this Wednesday Dec-14 New Straits Times Annual Motoring Review.
After the launch, members of the Malaysian media had a short interview with Motor Image Group’s Chief Executive Glenn Tan. On the question regarding other new Subaru model launches in the short term, Glenn answered, ‘We are looking to bring in the Subaru BRZ as well, hopefully Q2 or Q3 of 2012. It will be made available to Malaysia as well. At least that is my target. We are working on that and see how it goes.’ As you can see, he made that comment in the context of his personal wish in his capacity as a Subaru distributor. One must also realize that Glenn is not your typical CEO. Instead of being reserved and careful when speaking to the press, he frequently speaks his mind, including many work-in-progress items. Which is good for the media but at the same time one needs to read between his words very carefully. Glenn is very passionate about his cars and in Singapore, where the Subaru brand under Motor Image is very successful, he is almost like a rock-star. Many of the things Glenn says are still work-in-progress, but unlike other CEOs, he doesn’t mind telling them. About two years ago Glenn mentioned that Motor Image is looking to CKD the Forester in Malaysia, using Tan Chong’s assembly plant. But we now know that the plan did not materialize and instead, have evolved into the XV CKD programme. Thus explains our caution in making fast conclusions on any comments from Glenn Tan. Although I must stress that he is not to be faulted, instead the responsibility lies with the listener. After all, he did say Motor Image is ‘looking into,’ never once did he said anything about confirmed plans for a Forester CKD. Likewise with the BRZ.
Outside of China (62,412 Subaru vehicles sold during fiscal year 2011) and Japan (158,105 Subaru vehicles sold during fiscal year 2011), Australia is Subaru’s largest market in the Asia Pacific, with 41,150 units sold during fiscal year 2011 (April 2010 to March 2011). So we will look to Australia as a cue regarding the Subaru BRZ’s availability in the Asia Pacific. Subaru Australia’s Managing Director Nick Senior have earlier commented that introduction status of the BRZ in Australia is still unclear, saying that a decision will only be made after mid-December. Subaru Australia is 90% owned by UK based multi-brand auto retailer Inchcape Plc, 8% owned Subaru’s parent company Fuji Heavy Industries and 2% owned by Toyota’s trading arm Toyota Tsusho Corporation.
Nick Senior’s comments comes after the fact that Toyota Australia have recently confirmed that the Toyota GT-86, Subaru BRZ’s sister car, is confirmed for local Australian launch by mid-2012. It’s a simple academic fact but do not underestimate its implication and how this reflects the balance of power between Toyota and Subaru in this GT-86 / BRZ project. With the exception of Singapore, it is highly unlikely for any markets in the region to be able to confirm availability of the BRZ until Australia gets the green light, assuming the vehicle is even launched in Australia at all, let alone confirming its launch by 2012.
Toyota currently owns 16% of Subaru, and the BRZ is only possible with Toyota’s funding. Insider sources state that Subaru was initially not keen on the project, and even resisted it because of the huge technical challenges posed by the targets set by Toyota’s President and race-car driver Akio Toyoda. The BRZ / GT-86′s low and rearward bias engine positioning, together with the power output target (normally aspirated) posed a huge challenge. Only after some significant political struggle was Toyota able to force its way to implement Toyota’s own direct-injection technology to meet the specific power output target of 73.4kW per litre.
As this is a joint venture project, funded by Toyota, with much of important conceptual and background planning tasks like product planning and design is done by Toyota, so expect Toyota to wield significant influence in determining at which country and at what price the BRZ is allowed to be sold. Unlike other Subaru models, distributors like Motor Image would need to convince more than just the folks at Fuji Heavy Industries, Subaru’s parent company to grant them a reasonable ex-factory price and a realistic sales target in exchange for the rights to sell the car. Toyota will have to do its famed highly detailed market studies at great length before even allowing any dual-branding of its model in any country. Plus, Toyota distributors in the local country will not be too happy if they are expected to sell decent units of the GT-86 and yet have to contend with competition from Subaru dealers. Surely there will be a lot of resistance and the management of Toyota Motor Co. will need to deal with this.
Also note the way Toyota have been building up demand with two iterations of the FT-86 concept car, hosted numerous teaser ad campaigns in both print and online medium building up to the GT-86′s launch at the recent Tokyo Motor Show. Toyota was first to launch the GT-86, and then only followed by the BRZ. Toyota even invited members of the media from all over the world for a test drive session at the Fuji Speedway, with Toyota’s President Akio Toyoda personnally gracing the event. Meanwhile, Subaru only presented a transparent body shell at both the Frankfurt and Geneva Motor Show. Again, it’s these tiny little nitty gritty details that many missed but they tell a lot.
The fact that the BRZ does not feature AWD, a trademark Subaru feature, is in itself an obvious testament how Toyota’s influence in the project. The omission of AWD in the BRZ is creating a bit of a problem for Subaru’s PR machinery, which has always made its Asymmetrical AWD feature the center of the brand’s USP. If you are Subaru’s marketing head what are you going to do now that your flagship car doesn’t even have the much touted Asymmetrical AWD feature that you have previously wax lyrical about, even going as far as pointing how regular drivetrains of other makes provide inferior performance. As far as Toyota is concerned, that is an issue Subaru has to deal with. The heavy AWD goes against the GT-86′s most basic principle of being a lightweight front-engine rear-wheel drive sports car. So no AWD. Period. No further discussion.
Then there is the AP issue that Motor Image has to contend with. To our limited knowledge (and we could be wrong), approved import permits (APs) for the Tan Chong Group comes from its subsidiary Auto Dunia. Earlier this year, the Tan Chong Group introduced the Infiniti brand to Malaysia under its new subsidiary Inspired Motor Sdn Bhd. In August this year, Nissan Motor Co.’s CEO Carlos Ghosn have given a mandate to all his staff and Nissan / Infiniti distributors worldwide to triple Infiniti’s market share of the global luxury sector to 10% by 2016. To meet this tall order, Inspired Motors will need every single AP it can get its hands on. Amongst the local auto industry circles, it is common knowledge that Tan Chong Group has a principle of not purchasing APs from any third parties. Which explains Nissan’s limited CBU from Japan model offerings and why Motor Image in Malaysia does not even sell a single car in some months. Plus, the margins are definitely higher on a large luxury car like an Infiniti than a compact sports car like the Subaru BRZ.
In short, don’t get your hopes to high. Even if the BRZ does make it into Malaysia, supply will be very limited. Why would the principal at Fuji Heavy Industries bother to allocate any cars to Malaysia, where import duties are extremely high and the local distributor will need a very low ex-factory price, eating into their margins, to be able to sell it competitively. China will probably tell FHI that they need 10,000 cars for the year, and the first export batch needs to be out on the next available shipment in the soonest. Give us the cars fast and we will talk about the price later. That’s how Chinese distributors will negotiate. As for Malaysia, 20 units a year is our very optimistic unscientific projection, considering Motor Image’s sales trend over the past years. Price will be well beyond RM 200k. However, Motor Image is also a Subaru distributor for the Southern China region.
As for the Toyota GT-86. Our unofficial sources have hinted that the GT-86 might be made available for ASEAN markets, including Malaysia, but none of Toyota’s local country distributors in the region are keen to take on the car. Obviously on this side of the world (except Singapore), where imports from non-ASEAN countries are slapped with extremely high import duties, the GT-86 will be far from being affordable, defeating the purpose of the GT-86 in the first place. Sales volume will be very limited and does not warrant the minimum investment required to support a new model. Still, the GT-86 is Akio Toyoda’s pet project and the Toyoda-san will still want to see at least some units on the roads in this region to boost Toyota’s sporting image, its halo car. Before enthusiasts criticize their local Toyota distributors for not making the GT-86 affordable or not importing the car, understand that Toyota is a very huge organization and the entire company is structured in such a way to support high volume models best.
As mentioned earlier, remember to get a copy of tomorrow’s New Sunday Times motoring pullout Cars, Bikes and Trucks this Wednesday Dec-14 New Straits Times Annual Motoring Review for our coverage on the Subaru XV launch, Thailand Motor Expo and our interview with Glenn Tan.
Source URL: http://www.motorindustry.org/2011/12/10/toyota-gt-86-and-subaru-brz-asean-introduction/