Toyota Kirloskar Auto Parts Pvt Ltd (TKAP) today said it would invest another Rs 500 crore in India for expanding its second plant, which produces transmissions, and setting up of a third plant to manufacture 100,000 engines a year for Etios, a compact car being produced for the domestic market.
“We will be producing engines for our forthcoming compact car, Etios, at the third plant of TKAP. The Etios has been specially designed for the Indian market and it will be launched by December 2010 in India. To begin with, Etios will sport an imported engine from Japan,” Hiroshi Nakagawa, managing director of Toyota Kirloskar Motor (TKML) said. TKAP is a 64:26:10 joint venture among Toyota Motor Corporation (TMC), Toyota Industries and Kirloskar Group.
With the new round of investment, the total investment in TKAP will go up to Rs 1,000 crore. The company operates two plants in Bidadi near Bangalore. While the first plant produces 52,000 front and rear axles and propeller shafts, the second one makes 170,000 transmission units per annum.
The expansion of the second plant and the setting up of the third plant would be completed by the third quarter of 2012 and early 2013 respectively, he said. The fresh investment would create 500 jobs.
Hisashi Suzuki, managing director of TKAP, said while the third plant would produce 100,000 engines, the second plant would start manufacturing 240,000 transmissions a year from early 2013.
After utilisng part of this production for Etios, the rest would be exported to Thailand and Argentina, he said.
TKAP produces manual transmissions for Fortuner manufactured in India, Thailand and Argentina. It also produces axles and propeller shafts for Innova made in India. Domestic production of engines and transmissions would enable the company to provide the best quality product at a competitive price, he said.
Apart from the fresh investment in TKAP, TKML’s second car plant at Bidadi at an investment of Rs 3,200 crore is also nearing completion. The plant has an initial capacity of 70,000 units. It would be scaled up to 100,000 units later, he said.
Vikram Kirloskar, vice-chairman of TKML, said the company would further expand its operations in India. The company had asked the Karnataka government for more land for expansion, he said.
Nakagawa said the company was studying options for raising prices of their models in India. “We know that prices of many materials have gone up recently. Presently, we are exploring possibility of absorbing these additional costs internally and take a call on raising prices later,” he said.
He said the company was looking at doubling its sales in the country to 140,000 units during 2011. This year, Toyota hopes to achieve a 26 per cent rise in sales at 70,000 units. In 2009, it had sold 55,000 units.
The company will also export Etios to neighbouring markets from India. “We are studying the market opportunities for exports,” he said.
