Japanese auto major Toyota Motor Corp will invest USD 350 million (about Rs 1,400 crore) for setting up a second plant in India as part of its plans to introduce a ’strategic’ small car in the country by 2010.
Ending months of speculation over the second plant, Toyota, which runs the Indian operations through a joint venture with the Kirloskar Group, has decided to set up the new plant at its existing location in Karnataka.
Mr. K K Swamy, Toyota Kirloskar Motor (TKM) deputy managing director, said, “We have decided to build the second in Bangalore at the site of the existing facility with an investment of USD 350 million”.
Further he said that the new plant will have a production capacity of 1,00,000 units and will become operational by 2010. The company’s current plant has a capacity of 63,000 units a year.
TKM has been scouting for a location for months and finally zeroed in on the existing location to drive synergies with the existing operations.
He further added”From this plant, we will roll out a strategic new small car which is currently under development at our Japan R&D facility. The small will meet the broad needs of the Indian customers”.
The new small car, which will have high localization level, is primarily aimed at the Indian market although some of it will be exported.
Toyota had in the past declared that it would capture 10 percent of the Indian car market by 2010 and the new car is expected to play a key role in it.
Asked about the pricing and positioning of the small car, he said it would not be at the ‘Nano’ range nor it would be too expensive.
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Toyota Division passenger cars recorded April sales of 121,097 units, up 7.2 percent over the same period last year. Passenger-car sales were led by Camry, which posted April sales of 40,016 units. Camry Hybrid reported sales of 6,678 units in April, up 40 percent over April 2007. The Prius hybrid gas-electric mid-size sedan posted best-ever April sales of 21,757 units, an increase of 53.8 percent over last April. Yaris reported best-ever April sales of 11,434 units, up 45.9 percent over the year-ago month.
The new small car, which will have high localization level, is primarily aimed at the Indian market. In this effort up to what company get success this is matter of concern.