A unit of the Kirloskar group said on Wednesday it was close to a deal with Japan's Toyota Motor Corp to make sports utility vehicles.
"We have to finalise the indigenisation programme. The details are going on," Vikram Kirloskar, chairman of Mysore Kirloskar Ltd, told Reuters by telephone from Bangalore.
He said the two partners would sign an agreement and apply for government approval after working out the details.
"Until we cross all our t's, we will not sign. The day we sign the joint venture agreement, we will apply for government approval," Kirloskar said. Earlier on Wednesday, a Toyota spokesman told Reuters in Tokyo: "We are still in talks with Kirloskar and have not applied yet to the Indian government to set up the venture." Kirloskar said the exact amount of investment in the project, to be funded entirely by equity, was still being worked out.
But he confirmed a report in Japan's Yomiuri Shimbun daily on Wednesday that Toyota planned to hold a 70 to 80 percent stake in the venture. Kirloskar said the sports utility vehicle, expected to be manufactured from 1999, would be a new variant of the Kijang model. "It is a utility vehicle but not the existing Kijang," Kirloskar said.
In early June, the Press Trust of India reported that Toyota would invest nearly $240 million of a total of $340 million in the joint venture. In late May, Toyota executive vice-president Akira Yokoi told Reuters in Tokyo that the firm hoped to announce the joint venture agreement before the start of the company's summer holidays in Japan on August 9. Bangalore was one of four possible sites for the venture, Yokoi said.
AFP adds: A spokesman for Toyota said:: "Although we cannot comment on details at this moment, we want to submit an application to the Indian authorities for approval of the project as soon as conditions are met." Starting in 1999, the joint venture will initially manufacture 20,000 to 30,000 recreational vehicles per year, such as minivans and sports utility cars for exports to Asian countries. (Reuter)
Yomiuri said Toyota's production in India was initially limited to recreational vehicles as it hoped to avoid competing directly with Japan's Suzuki Motor Corp, which has already produced a small car that has dominated the Indian market.
