Now Toyota plans small car plant in India

Toyota Motor Corporation plans to invest about $89 million with mini-vehicle unit Daihatsu Motor Co. to build a factory in India to produce 100,000 small cars a year from as early as 2007, the Nihon Keizai newspaper said on Thursday.

Toyota is looking at repeating the success of Suzuki in India which built and sold Keijidosha cars (cars that enjoy a lower tax structure in Japan since they are small and economical).

The model most likely to be produced at the new plant is a 1-litre-class car based on the Passo model that Toyota and Daihatsu co-developed, the report said.

Some of the vendors when contacted by Business Standard indicated that the four-door version of the Daihatsu Sirion hatchback is also being considered. Sources at Toyota Kirloskar near Bangalore were unavailable for comment.

Daihatsu is known for building quality small cars with great economy -- the Passo can stretch a litre to 15-17 kpl. Top Japanese auto maker Toyota, which operates in India through a joint venture with the Kirloskar group, will build the new plant near its factory in Bangalore, the report said.

The plant will be the first in India for Daihatsu. Spokeswomen at both companies said nothing had been decided. The spokeswoman at Daihatsu added, however, that her company aimed to build cars in India at some point.

Many global auto makers such as Volkswagen AG are looking to enter or expand in India, considered one of the most promising car markets along with China due to its huge population and growing economy.

Toyota built a record 48,000 utility vehicles last year in India -- more than double the volume in 2000 -- but is still a minor player with just 3.5 per cent of the market, which is dominated by Suzuki Motor Corp. unit Maruti Udyog Ltd. Toyota has said it wants 10 percent of the Indian market by 2010.

The current plant contributes to the international multi-utility vehicle project and is set to add the Fortuner SUV and a Hi-Lux pick up truck to the current range of Innova models.

Daihatsu, Japan's second-largest minivehicle maker after Suzuki, will manage and operate the new plant, the paper said.

Toyota and Daihatsu plan to jointly set up a firm to supervise the local operations.

Toyota and Daihatsu operate jointly in several overseas markets, including Indonesia, Pakistan and Venezuela.

Toyota's Bangalore plant began production in 1999 and has an annual capacity of 60,000.