Toyota’s ‘baby’ Land Cruiser seen bolstering Asia car sales

Toyota Motor is counting on a new Land Cruiser, the smallest in its lineup, to defend its foothold in Asia as China’s automakers rapidly expand across the region.

The Land Cruiser FJ is far exceeding Toyota’s sales target in Japan and is also doing well abroad, said Masaya Uchiyama, the line’s chief engineer. The SUV costs from around ¥4.5 million ($28,500) and was developed after customers asked for a smaller Land Cruiser to fit Asia’s often narrow roads.

“We’re trying to reach people who may previously have avoided the Land Cruiser because of its size,” Uchiyama told reporters in Toyota, Aichi Prefecture.

The FJ debuted in March in Thailand where it’s made, kicking off sales in the key Southeast Asia region. Long considered a safe haven for Toyota and its Japanese peers, Chinese brands led by BYD are making inroads there with affordable electric vehicles.

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Southeast Asia is among the world’s fastest-growing car markets and for decades has been a core manufacturing base for Toyota and Honda Motor. But China’s export push is shifting dynamics there. In Thailand, Chinese brands — bolstered by generous EV subsidies and low tariffs — have expanded to claim nearly 30% of the country’s car sales, up from just 4% five years ago.

“The Chinese are producing SUVs and incorporating technology that’s very impressive,” Uchiyama said. While Toyota is watching new developments closely, he said, the Land Cruiser line represents a different proposition because of its focus on reliability and durability.

Toyota said roughly 12,000 Land Cruiser FJ units were registered in Japan from mid-May through August, well above its target of 1,300 sales per month. The company sold around 3,000 FJs in Thailand, the Philippines and Vietnam, the three Southeast Asian markets where the model is currently available. Toyota’s more mass-market Yaris Cross, a crossover SUV that’s smaller than the FJ and built for city driving, can command more than 3,000 sales in a single month in Thailand.

Shorter and narrower than its three more spacious Land Cruiser siblings, the FJ comes with a 163-horsepower engine and driver-assistance features including one that helps the car master steep descents without locking the tires.

During a recent test drive at an offroad course in Toyota city, the SUV handled tough climbs, rocky terrain and large potholes with relative ease. With its hydraulic steering, making tight turns required greater force than in its larger siblings but also provided more immediate road feedback.

The FJ “could be an important model in Southeast Asia because it can make the Land Cruiser brand more accessible to a wider range of customers,” said Tatsuo Yoshida, a Bloomberg Intelligence analyst. Its smaller size “should also be an advantage for daily use in cities, while keeping good off-road capability.”

Still, succeeding in some of the more competitive markets outside Japan won’t be easy. The compact SUV is going up against models including the 5-door variant of Suzuki Motor’s Jimny, which starts at around ¥2.9 million.

In Thailand, where Toyota has dominated for decades and remains by far the best-selling carmaker, Chinese brands such as Chery, Jaecoo and MG are making inroads with attractively priced offerings. Chery’s V23, a boxy electric SUV with a retro design, is priced from around 700,000 baht ($20,800), well below the FJ’s 1.29 million baht.

Toyota’s Japanese rival Mitsubishi Motors, meanwhile, is reviving the Pajero after ending production of its flagship SUV in 2021. While Mitsubishi hasn’t yet disclosed pricing, it would likely compete with the Land Cruiser 300, the line’s largest and most powerful model, which starts at around ¥6.3 million in Japan.

Toyota can point to the Land Cruiser’s 75-year track record as a reliable workhorse in its competition with rivals. A 1950s Land Cruiser predecessor was the first vehicle to climb to the sixth station of Mount Fuji, and versions since have been used for anything from ambulances and firetrucks to safari tour vehicles.

The new FJ caters to a slightly different crowd as SUVs become more popular with urban drivers. Beyond Japan and Southeast Asia, Toyota anticipates robust demand for the model in Africa and the Middle East.

“We plan to introduce it in all markets where it makes sense to have a more compact Land Cruiser,” Uchiyama said.