Japanese automobile major Toyota Motor Corporation on Friday announced an ambitious plan to set up another plant with a capacity to manufacture 1 lakh units per annum at its existing site in Hosur with an investment of ₹ 1,400 crore ($ 350 million). The plant will be operational by 2010.
The company currently has a joint venture Toyota Kirloskar Motor Private Limited (TKM), which manufactures utility vehicle Innova and Camry from its existing plant with a capacity to produce 60,000 units annually. .
Plans call for the second TKM plant to produce passenger vehicles, including the Corolla as well as a new strategic small car, which is being developed with the aim of meeting the broad needs of customers in India, where motorization is expanding rapidly. Moreover, TKM plans to export them in the future, a company release said.
TKM had earlier said that it wanted to capture 10 per cent of the growing Indian market by 2010 and launch of a small car is key in its strategy to attain this goal. India remains largely a small car market with 70 per cent of the cars produced being categorized so and is dominated by Maruti Suzuki India Ltd.
The lucrative Indian small car market has already attracted global players and Japan's Honda has also taken the plunge by setting up a second manufacturing plant in Rajasthan to roll out a small car by 2009. General Motors has also announced that it will be launching its global small car in India within the next two years and has set up its second plant in Maharashtra.
TKM will strive to achieve high local procurement levels for the new strategic small car. In terms of sales, the company intends to increase the dealerships from its existing level, in future. In line with TKM's increasing annual production capacity, its affiliated suppliers are currently considering investment in the Indian industry as well, and both of these factors are predicted to have a major impact on the economy.
Toyota hopes that promoting business activities deeply rooted to the local community in India, which is a country with great potential, will be a positive contribution not only to the development of the automobile industry in India but also to the development of its overall economy and job creation.