Honda, Toyota shift plans to fast lane

The small car segment is hotting up, with major automobile players like Honda and Toyota announcing plans to get into this market soon.

Honda Motors India plans to expand its capacity fourfold from 50,000 units to 200,000 units by 2010, with the small car business being a major part of its growth. It is scouting for a location for a new plant, and is negotiating with several state governments, including Rajasthan and Tamil Nadu.

Masahiro Takedagawa, president & CEO, Honda Siel Cars India Limited, said: "We will be investing $200 million in the Indian market in phases. The small car will be a major part of our expansion drive, but it will take some time before we complete market studies, and meet customer satisfaction with our product."

Toyota Kirloskar Motor plans to enhance its market share to 10 per cent from the present 4 per cent, and the proposed small car will be a major driver for this growth.

Atsushi Toyoshima, managing director, Toyota Kirloskar said: "It may take two to three years before we come up with the right kind of small car for the Indian market. Some models have been lined up, but not chosen. We will first access the price-sensitive Indian market; so that the volumes help us achieve a market share of 10 per cent by 2010."

Existing small-car players are also revving up for the battle. After riding high on its Santro, Hyundai Motor India is looking at another small car, positioned between the Santro and the Getz.

"Already one-third of our sales of 300,000 is being exported. Keeping in mind the huge export demand, the other car proposed to be launched will take some load off the orders. We have set an export target of 50 per cent of sales by 2008," said Arvind Saxena, vice-president, marketing and sales, Hyundai Motor India.