Toyota to cut capex, but cars on roll

Japanese automaker Toyota has said it is looking to roll back its commitment to spend ₹3,200 crore on its second plant in India, largely on account of lower commodity prices.

The company clarified that though its Japanese parent has been hit hard by the global recession, the Indian plans are insulated and are on track, and it would unveil its small car for the Indian market soon.

'We are continuously working on reducing our cost and investment by bringing in lots of value engineering for rolling out the small car. I hope the investment will come down and I am sure it will,' said Hiroshi Nakagawa, managing director, Toyota Kirloskar Motors.

He refused to specify the quantum of the reduction.'There will be no reduction in the planned capacity addition as we think it would be fully utilised once our small car is launched next year,' he said.

'We are looking at increasing the level of localisation in our vehicles. Current products like Innova and Altis have on an average 50 per cent local content but the small car will have a high local content of almost 75 per cent,' Nakagawa said.

'We are also exploring the possibility of increasing sourcing of components from India. Besides we would also be exporting the small car out of here making India the hub for it,' he added.

The small car is expected to be based on the Yaris platform and may have a 1.2 litre petrol engine to avail the benefit of lower excise duties. Ahead of this launch, Toyota is expanding its dealer network from 85 to 150, and would launch its sports utility vehicle, Fortuner, this year.