Daihatsu has announced that it will cease selling vehicles in Europe by 2013.
In truth, the Japanese manufacturer’s presence in the European market place and particularly in the UK has been reducing over the past couple of years.
The brand has never commanded a large proportion of the European market selling less than 60,000 units in 2007 before the recession hit. This figure dropped by around two thirds in 2010 with less than 20,000 sales in Europe.
The company’s failings are more tangible in the UK – having sold around 5,000 models in Britain in 2007 and 2,300 the year after, the Japanese manufacturer managed just 170 sales last year.
When this minority share is coupled with increasing financial strains on the manufacturer and increasing CO2 restraints that are becoming more expensive to cope with, it is easy to see why Daihatsu has decided to pull the plug on its European invasion.
Poor sales and the prevailing Yen
While the value of the Euro and the British pound has dropped, the Yen has remained strong making the export of vehicles from Japan a much more expensive business than in previous years.
The appreciation of the Yen has meant Daihatsu prices are no longer competitive and without a viable customer base there seems little point in following the likes of Nissan, Toyota and Honda in establishing foreign production plants.
A similar decision was taken by Nissan when it pulled the European Cube from its line-up while Honda has lowered its 2011 sales expectations and Toyota has already shifted production of the Prius to Thailand – all to avoid the impact of the Yen.
What does that mean for Daihatsu?
The decisions taken by Nissan, Toyota and Daihatsu all agree on the fact that the strength of the Yen has made it near impossible to continue exporting from mainland Japan.
However the fact that Nissan and Toyota have initiated less dramatic changes would imply that the real reason behind Daihatsu’s retreat from Europe is in fact a reflection of its poor reputation there.
There hasn’t been any new Daihatsu stock in the UK since 2009 and there is a similar lack of demand for the brand as well.
Fortunately for Daihatsu its major market remains in Japan and for the financial year ending in March 2009 the company recorded decent overall revenues in the face of the economic climate, only experiencing a decrease of around five per cent on the previous year.
The decision to leave Europe seems to be one of damage limitation as opposed to financial necessity for Daihatsu.
David Hort currently works for a number of automotive websites including Askaprice.com writing up to date news, features, blogs and buyers guides from the motoring world.