Toyota Kirloskar to get out of red this year

The company hopes to sell 56,000 vehicles in 2006.

Toyota Kirloskar Motors (TKM) today said it would make a net profit this year after wiping out the cumulative losses.

The company, which has invested Rs 2,400 crore so far, hopes to sell 56,000 vehicles in 2006 against 40,700 in 2005, a growth of 40 per cent, according to K K Swamy, Deputy Managing Director, TKM. The company has been selling cars in India since 2000.

TKM, which also manufactures transmissions for parent company Toyota Motor Corporation (TMC), hopes to sell 160,000 units this year and earn a revenue of Rs 400 crore.

TMC owns 89 per cent in the joint venture while 11 per cent is held by the Kirloskar Group.

TKM today launched its first model for the current calendar, the all new sixth generation premium luxury sedan, Camry, with a 2.4 litre petrol engine and priced in the range of Rs 20-22 lakh, ex-showroom, Delhi.

The new Camry, that comes close to its launch in the US (January this year), is priced at Rs 86,000 to Rs 2.5 lakh more than its earlier version, close to half of which is due to the new four per cent countervailing duty introduced in the recent budget.

"The CVD is not just on the imported value of the car but also on other taxes, thus effectively charged at 8 per cent," said Swamy.

The Camry sold in India is imported as a completely built unit, thus attracting a duty of 103 per cent. Given the small sales volume, the company is not eyeing the CKD version in the near future.

Sales of this model in India is expected to be 1,000 units this calendar, almost same as last year.. The size of this segment is estimated at 4,500 units year, with other models like the Mercedes C Class, Skoda Superb and Honda Accord.

Discussing the company's plans on developing small car for India, company executives said that no decision has been taken and the location of the next plant too is undecided.

Given the company's plans to sell 56,000 units in the current year, the capacity of its plant near Bangalore is likely to get exhausted in this calendar.

Moreover, TKM wishes to have a 10 per cent marketshare by 2010, when the size of the Indian car market is expected to be 2 million units a year.