Toyota Motor Corp’s Auris on display in Tokyo on Monday. (Reuters)

Oct. 23 (Agencies): Toyota Motor Corp, the world’s biggest automaker by market value, introduced its Auris hatchback, as it seeks to boost sales of compacts, which account for about a third of Japan’s passenger car market.

Toyota expects domestic sales of 3,000 Auris Compacts a month, it said. The Auris, which was on display at the Paris Auto Show last month, comes with a 1.5-litre or 1.8-litre engine, and costs between 1.62 million yen ($13,600) and 2.3 million yen.

It will go on sale in Japan today, competing with Nissan Motor Co’s Tiida and Honda Motor Co’s Civic.

Toyota, which has a market share of more than 40 per cent in Japan, is accelerating its push into the compact segment as consumers opt for more fuel-efficient cars. The automaker had introduced its redesigned Corolla Compact, its best-selling model earlier this month, following three new compacts last year.

Toyota aims to sell 200,000 Auris Compacts in Japan and Europe next year, it said. The Auris, which will replace Toyota’s Corolla Runx and Allex hatchbacks in Japan, will go on sale in Europe in early 2007.

Toyota’s small cars have helped it win market share from Renault SA and General Motors Corp in Europe and from GM and Ford Motor Co in the US.

Daimler partners

DaimlerChrysler has cut to two its list of potential partners for building a small car, chief executive Dieter Zetsche told a newspaper, but is wary about giving any Chinese firm a leg up in the US market.

“We spoke with a handful of possible partners and there are two left now,” he said in an interview published on Monday in Germany’s Frankfurter Allgemeine Zeitung, adding that he still hoped to have a contract on the subcompact signed by year’s end.

Industry sources have said China’s Chery is one of the companies in talks, and Zetsche said cost/benefit analysis spoke in favour of Chery because DaimlerChrysler could not make small cars at costs that would make the business “comfortable”.

He said, some partners did not offer the quality needed to make the small car in conjunction with US arm Chrysler for sale in North America and elsewhere.

Asked whether he was worried that he could be giving a Chinese carmaker a platform to enter the US market, he said, “One reason why we have not concluded a deal with the potential partners is also the question of how we avoid that. We have very clear ideas there. Regardless of this, there is no doubt that not only Chery but also other Chinese rivals will sell their products in America and the rest of the world, with us or without us.”

Chinese carmakers have used joint ventures with foreign manufacturers to build up a booming domestic industry but are increasingly looking to use this knowhow to develop their own products that can compete in China and on export markets.

One source familiar with the matter said talks between Chrysler and Chery could drag on for some time given disagreements mainly over pricing and profit sharing.