Toyota to strengthen dealership network by 65% by 2010

Preparing ground for launching a 'strategic' small car in the Indian market, the world's largest car maker, Toyota, will expand its dealership network by over 65 per cent by the end of 2010 to increase its interface with customers.

The company, which is present in India through a joint venture with the Kirloskar Group, today reported a jump of 8 per cent in its sales during September at 6,187 units over the same month last year.

At present, Toyota has 90 dealerships and has firmed up plans to enhance it to 150 outlets, of which about 60 per cent would come up in semi-urban and rural locations, Toyota Kirloskar Motor (TKM) said in a statement.

TKM is investing about Rs 3,200 crore in setting up its second manufacturing facility in Bangalore with an initial production capacity of 70,000 units to roll out a 'strategic' small car by early 2011.

It already has a plant in the city near the upcoming facility, which can produce up to 80,000 vehicles every year.

With rising demand from semi-urban and rural areas, the company plans to expand to smaller cities, such as Allahabad, Srinagar, Shillong, Belgaum, Ambala, Tirupati, Meerut and Patna, before the launch of the small car.

Meanwhile, the company said that "the introduction of Fortuner in August, and the consistent demand for the Corolla Altis and Innova have helped in the surge of the total sales."

"With rising rural sales and the impending launch of our compact car, we believe setting up dealerships in small towns is viable," TKM General Manager (Sales) Sailesh Shetty said.

Besides, in order to push sales, the company is in talks with some nationalised banks and other financial institutions to provide retail financing to its customers for purchasing TKM's vehicles.

"Alliance with nationalised banks is part of our expansion strategy, and we hope to achieve the objective of greater penetration in smaller towns," Shetty said.

TKM at present has tie ups with a range of lenders, including State Bank of India, Bank of Baroda, HDFC, Kotak Mahindra, ICICI and Axis Bank.