Toyota to enter small car segment

To open eight dealerships across the country

Toyota plans to enter the small car segment in India. The move comes close on the heels of the announcement in the Budget 2006 that the excise duty on small cars would be cut down by eight per cent to 16 per cent.

Car makers like Maruti, Hyundai and Tata had slashed prices on the small cars by Rs 13,000-Rs 22,000 after the announcement.

Addressing the media here, Toyohiko Ino, director, marketing groups, Toyota Kirloskar Motor Pvt Ltd, (TKM) said the company was mulling entering the small car segment.

"This would help us tap the market emerging out of the growing middle-income segment in the country. The design would fit into the Toyota framework and a new brand would be developed," he added.

He, however, declined to give a time frame for this initiative. According to data provided by the Society of Indian Automobile Manufacturers (SIAM), the total number of passenger cars sold from April 2005 to February 2006 was pegged at 7.71 lakh units, of which small cars accounted for 5 lakh units.

For the same period last year, the total number of cars sold was 7.3 lakh units, of which small cars accounted for 4.41 lakh units.

Earlier, Ino inaugurated the company's 55th dealership at Trichy, its third in Tamil Nadu, after Chennai and Coimbatore. He said that another eight dealerships would be opened in Madurai, Rajkot, Amristar, Kannur and Bhopal by mid 2006.

The company's premium car-model Corolla is popular in Tamil Nadu and has sold over 520 units from 2005 till February 2006. The company has also sold 3,700 Innovas. The recently-launched sixth generation Camry had sold 47 units between 2005 and February 2006.

For Innova, the localisation is to the tune of 70 per cent and for Corolla, it is about 55 per cent. Camry is imported in a completely-built condition. The company is planning to enhance localisation in a long run. However, it would continue to import Camry in a completely-built condition for some more time, he said.

He added that, as of now, the company did not have any plans to export to countries like Bangladesh and Sri Lanka. But the company is planning to export to Nepal. It has already sold six units in the country and has a distributor at Katmandu.