The Hindu : Karnataka / Bangalore News : Toyota Kirloskar likely to set up second unit in Bangalore

Online edition of India's National Newspaper
Wednesday, Sep 28, 2005

Karnataka

Karnataka - Bangalore

Toyota Kirloskar likely to set up second unit in Bangalore

Special Correspondent

Delegation meets Chief Minister; joint venture to invest Rs. 1,500 crores more

FUTURE PLANS: Atsushi Toyoshima (right), Managing Director of Toyota Kirloskar Motor Private Limited, and K.K. Swamy (left), Deputy Managing Director of the company, at a meeting with Chief Minister N. Dharam Singh in Bangalore on Tuesday. — Photo: V. Sreenivasa Murthy

BANGALORE: The top management of Toyota Kirloskar Motor Private Limited met the Chief Minister N. Dharam Singh and Industries Minister P.G.R. Sindhia here on Tuesday fuelling speculation about the car makers plan to expand operations by setting up a second manufacturing unit in the State with an additional investment of Rs. 1,500 crores.

However, the delegation of the joint venture between Japan's largest carmaker, Toyota Motor Corporation (99 per cent equity) and the Kirloskar Group (one per cent stake), was tight-lipped about the meeting attended by company's Managing Director, Atsushi Toyoshima, among others.

"We have no comments to make except to say that the meeting was part of a courtesy call. We keep meeting several Ministers in the Government," a company official said referring to the 30-minute meeting during which the company is understood to have discussed its proposed expansion plans in India.

The company started production in India in December 1999 and has so far invested Rs. 1,500 crores in its plant at Bidadi on the outskirts of Bangalore with a capacity to make 60,000 units annually.

The company official said the Bidadi plant "will be reaching peak capacity by early next year" going by the current production levels of 42,000 units of Innova and 11,000 units of Corolla. A new plant may thus become imperative for the company to cater for the increasing demand from customers.

It is understood that the proposal submitted by the company for setting up a second plant in the State is expected to come up for consideration at the October 6 meeting of a high-level committee headed by the Chief Minister.

`Under wraps'

With several States vying with each other to grab Toyota Kirloskar Motor Private Limited's second manufacturing unit, Mr. Toyoshima is believed to have requested the Chief Minister not to make the proposed investment figure public.

A formal announcement on Toyota's fresh investment plans for India is likely to be announced from the company's headquarters in Japan, the official said.

Small car

Earlier, company officials have been reported as saying that Toyota and its subsidiary, Daihatsu Motor, plan to set up a small car assembly factory in Bangalore for which a feasibility study is on.

The report said that Toyota and Daihatsu plan to start the manufacturing unit in Bangalore by the end of 2007 with a capacity to produce 1,00,000 cars a year.

The car to be built in India is likely to be modelled after the small car they earlier co-developed and sold two brands in Japan — the Toyota Passo and Daihatsu Boon.

Both the Passo and Boon come with 1 litre and 1.3 litre engine options.

The Passo is one of the more affordable models in Toyota's vehicle line-up. The Indian version is likely to be priced even lower, the report said.

Mr. Toyoshima had recently said that it would be impossible for Toyota to capture a substantial market share in India without a compact (small) car in its stable.

The company at present commands a five per cent market share of the one million-a-year passenger car market in India. "We want to be present in all car segments in India," Mr. Toyoshima had said.

Toyota's Innova and Corolla are manufactured here, while Camry and Land Cruiser Prado are being offered in India as completely built units.

Printer friendly page
Send this article to Friends by E-Mail

Karnataka