SHANGHAI (REUTERS) - Toyota Motor is giving its Vios and Yaris models a major makeover for China as part of the Japanese group's make-or-break move into the no-frills, entry-level segment of the world's biggest auto market.

Versions of the Vios and Yaris have done relatively well in the United States, Europe and Japan, "but we have not made sufficient progress with the car in China", Mr Hiroji Onishi, head of Toyota's China operations, told reporters during the Shanghai auto show on Sunday.

"We tried to give (the models) a proper 'daqi' stance typical of what Chinese consumers look for, and we improved fuel efficiency," he said, referring to a local phrase that Chinese use for a car's road presence.

The revamps are a key plank in Toyota's fightback strategy in a market where its sales were battered last year in the fallout from a row between Beijing and Tokyo over disputed islands in the East China Sea.

Mr Onishi said it could take Toyota at least a year to win back business lost to that damaging territorial dispute, leveraging the new no-frills models.

The re-designs, with the new sedan version replacing the existing Vios and a hatchback replacing today's Yaris, are a recognition by Toyota that it misread the Chinese market even before last year's dispute that halved the company's sales in September. The Japanese firm will keep the existing model names for the new cars that should be in showrooms by the end of the year.

The new cars are critical to Toyota's China strategy as they are planned as high-volume models to regain momentum in the market and restore branding after the Yaris fizzled - partly through a perceived lack of "daqi" and because it was priced too high.

The existing Vios, launched in 2002, cost from 89,500 yuan (S$17,900), while the Yaris, brought to market six years later, cost from 87,000 yuan - while annual incomes for many are 50,000 yuan to 60,000 yuan. Neither car really took off with a new consumer class of people who now just about earn enough to be able to afford a car.

A decade ago, Mr Akio Toyoda, the founding-family scion who now heads the group, ran Toyota's China operations and set the"aspirational" goal of selling 1 million cars a year in China by 2010. It missed that goal in 2010 and again in 2011. In September last year, days before the diplomatic dispute with China, Toyota said it aimed to sell up to 1.8 million cars annually in China by 2015.