Toyota Plans Over $700m Investment

Japanese automobiles giant Toyota Motor Corp and the Bangalore-based Kirloskar group have indicated a $700 million-plus investment plan for their automobiles joint venture, Toyota Kirlos-kar Motor Pvt Ltd, in two phases. About $170 million will be invested in the first phase, while another $500-700 million will be pumped in during the second phase.

In the first phase, Toyota Kirloskar will produce a Toyota utility vehicle for the domestic market on the lines of the Japanese companys Kijang model. The production of this vehicle is slated to commence from December 1999 at a new 50,000 units per annum capacity plant at Bidadi, near Bangalore. The utility vehicle is expected to be a 10-seater, with a diesel engine. It is being designed for use in both urban and rural areas.

In their detailed projections, the two partners have targeted annual sales of 20,000 vehicles in the first year, 35,000 in the second year, 40,000 in the third year, 45,000 in the fourth year, and 50,000 at the end of five years.

In the second phase, slated to begin from 2003-2004, Toyota and the Kirloskars propose to make an additional investment of $500-700 million. This is projected to increase the projects production capacity to 200,000 vehicles per annum.

The two partners also propose to invest in other car models, which will be introduced in the country in the second phase. The production and design details of the models are currently being worked out.

Toyota Motor, which has a 74 per cent stake in Toyota Kirloskar, will bring in Rs 444 crore as equity investment in the joint venture company. Toyota Kirloskar has an authorised share capital of Rs 600 crore. The balance Rs 156 crore