Toyota mulls facility in north

Plans fresh offerings in the volume segment.

Toyota Kirloskar Motor is planning to expand in north India and is looking at expanding its presence through fresh offerings in the volume segment. Toyota Kirloskar's plant in Bidadi near Bangalore, which can roll out 60,000 cars a year, is today running at full capacity.

The availability of skilled and manageable labour, tax sops offered by some northern states like Uttaranchal and Himachal Pradesh and access to the larger car market in the region are some of the reasons cited for the move.

While sources close to the development confirm that Toyota Kirloskar is keen to enter the volume segment, the new offerings need not necessarily be in the compact segment.

"The definition of a compact car in India is not the same as it is in other major markets in the world. Hence to compartmentalise volume segment models as compact will be incorrect," said an industry observer.

Toyota Kirloskar's management had said the company was eyeing 10 per cent, or 200,000 units, of the two million units passenger vehicle market in India by 2010. Toyota's current market share in India is estimated at less than five per cent.

The sources said Toyota Kirloskar might even consider Uttaranchal as a location for its next phase of expansion. Uttaranchal's Chief Minister ND Tiwari had last month visited Toyota's facilities near Bangalore and had invited the company to set up a facility in the state.

Toyota Kirloskar is also expected to build on its volume through the launch new models in the volume segment, which today accounts for over 50 per cent of the Indian passenger vehicle market.

It is also learnt that Toyota's subsidiary Daihatsu, which specialises in compact cars, will bring its products into the country. It is still not clear whether the new series of compact cars from the Toyota family will come form Toyota itself or from its subsidiary.

Industry sources, however, did not rule the possibility that the Japanese automobile major entering the volume segment with a combination of products from both companies.