Toyota Kirloskar to import engines for compact car

Toyota Kirloskar Motor (TKM), the Indian subsidiary of the global auto major Toyota Motor Corporation, said it will import engines for its upcoming compact car from the Japanese car-maker's facilities till production volumes achieve break-even.

"Initially, the company would import engines from its facilities in Thailand or Japan. TKM could start manufacturing engines here only after the volumes touched around 2.5 lakh vehicles per annum," said Shekar Viswanathan, director of TKM.

While it looked at sourcing more than 50 per cent components locally for giving it a cost competitiveness vis-a-vis other compact cars in the market, manufacturing engines at this scale was not profitable.

"We would look at increasing local sourcing in the coming years provided it matched the quality and cost parameters," he told Business Standard on the sidelines of a programme on traffic safety.

The compact car is currently under development and is slated to be launched two years from now.

Meanwhile, TKM's upcoming plant at Bidadi near Bangalore would have at least seven on-site suppliers, as the company is looking at bringing its suppliers closer to its facility. The Tata Motors' Singur plant for the small car 'Nano' has adopted a similar model — where the vendors are located around the periphery of the mother plant.

"These suppliers would be essentially ones that would manufacture heavy components like seats, blasts, and other metal parts for the car," Viswanathan said on the sidelines of a function here.

TKM's existing facility at Bidadi, that manufactures 60,000 vehicles per annum, uses about a quarter of the entire 432 acres. The second plant would spread over 130 acres. The second plant, that was scheduled to go onstream by 2010, would have an initial capacity of around one lakh vehicles per year that would be scaled up in the future. TKM could double the capacity in 3-4 years from the time of commencement of the plant.

TKM would use its new facility for manufacturing other models from the Toyota stable as well, apart from the compact car. These would not be in the luxury car segment, Viswanathan clarified. TKM was still working on the product-mix, informed a company spokesperson.

TKM reported nearly a 12 per cent increase in total vehicle sales in 2007 at 54,181 units compared to the year before. The multi-utility vehicle Innova topped the list selling 46,527 vehicles during the year. The Toyota-Kirloskar joint venture currently manufactures Innova and Corolla from its Bangalore facility.