The Foreign Investment Promotion Board (FIPB) has given the go-ahead to Toyota Kirloskar Motor Ltd to import completely built units (CBUs) of its range of vehicles.
The FIPB has recommended the proposal for final approval from Union commerce and industry minister Murasoli Maran, sources said.
The proposal had the support of the department of commerce, which is the administrative ministry for imports and trading.
Sources said Toyota was likely to launch its highly popular Land Cruiser, Camry and Lexus brands in India next year through this channel.
The Land Cruiser is expected to be priced under Rs 40 lakh, the three-box Camry at over Rs 20 lakh and the top-end luxury sedan Lexus at around Rs 50 lakh.
The Lexus is compared with the top-end Mercedes S-class sedan produced by DaimlerChrysler. Toyota is also likely to launch domestically several of its other car models from its global portfolio. But the number of imports will be restricted, the sources said.
Toyota had sought FIPB's permission to import CBUs from its parent, Toyota Motor Corporation of Japan, and other overseas units. This would complement its main manufacturing activity, the company had said in its application.
The company's Bidadi, Karnataka-based plant currently rolls out the multi-utility passenger vehicle Qualis.
The plant is expected to produce a variant of the Qualis next year and also a passenger car based on the popular Corolla platform.
Company officials were not available for comment. In its application, Toyota had said that its plan is to import CBU vehicles and pass them on to dealers for further sale to retail customers.
Accordingly, the proposed activity will be mainly in the nature of wholesale trade with complete back-up arrangements in terms of product warranty, performance and after-sales service.
Customers will also be assured of better quality and after-sales service, including easy availability of spare parts, the sources said.
However, the company has observed that "the demand for CBU units is not expected to be high".
In fact, the government has cleared proposals by DaimlerChrysler India (formerly Mercedes-Benz India), Ford India, General Motors India and Honda Motorcycles and Scooters India Ltd for importing completely built vehicles for sale in the Indian market.
The proposals were cleared after the core group of FIPB recommended allowing import of CBUs of vehicles on the condition that the numbers will be limited and a fresh appraisal will be made after two years.
Earlier, there were apprehensions that with the quantitative restrictions having been lifted, carmakers may resort to large scale imports and prune down their manufacturing operations. The effective import duty on CBU vehicles is, however, as high as 120 per cent.
