Toyota to set up 2nd plant in Bangalore

The Rs 1,400 cr unit will also make small cars.

Toyota Kirloskar Motor (TKM), the Indian arm of Japanese auto major Toyota Motor Corporation, the world's second largest automaker, on Friday said that it will invest Rs 1,400 crore to build its second car plant at Bidadi near Bangalore adjacent to the existing plant.

This new unit will also be the base for a new 'strategic small car'. According to Toyota, the second plant, which will begin operations by 2010, will have an initial annual production capacity of around 100,000 vehicles, with plans to increase that over time.

Toyota, with 0.6 per cent of the Indian car market last year, has lagged behind rivals in the world's second-fastest growing major economy. Automakers including General Motors Corp, Honda Motor Co and Volkswagen AG have already announced a combined $6 billion investment in the country.

Currrently, Toyota Kirloskar has a capacity of manufacturing 63,000 units per annum.

TKM will produce passenger vehicles, including the Corolla as well as a new strategic small car. TKM also plans to export them in the future, a company release said. With this move, Toyota joins its global peers such as Suzuki, Hyundai, General Motors and Ford Motors in increasing its manufacturing presence in India in the recent past.

Toyota's plan to introduce a small car in India comes at a time when the second-largest global car maker is aiming to capture 15 per cent of the Indian car market by 2010, from its current share of less than 5 per cent. Currently, a little over 1.2 million passenger cars are sold in India and is expected to double by 2010.

K K Swamy, deputy managing director, Toyota India, said: "At present, the R&D of this new small car is underway at our headquarters in Japan."