The Foreign Investment Board has cleared Japanese auto major Toyota Motor Corps proposal to invest $700-800 million in two phases in its joint venture with the Bangalore-based Kirloskar group.
The proposal will now be placed before the Cabinet Committee on Foreign Invest-ment for a final clearance after it gets the approval from industry minister Murasoli Maran.
The FIPB has not accepted the Toyota-Kirloskar combines request for special excise and import duty concessions. The Board said the project will enjoy the same concessions, if any, that exist under the current exim policy and excise guidelines.
The two partners had sought the concessions in order to make cars available at affordable prices to the consumer, according to their FIPB application.
The two partners had indicated a two-phased investment plan in their automobile joint venture project which involves an investment of $170 million in the first phase and another $500-700 million in the second phase.
In the first phase, the joint venture company Toyota Kirloskar Motor Pvt Ltd will produce a Toyota utility vehicle for the domestic market on the lines of its Kijang model.
In their second-phase investment plan beginning from year 2003-2004, the production capacity will be increased to 200,000 vehicles a year. The two partners have also proposed to invest in other car models, the production and design details of which are currently being worked out, that are to be introduced in the country in the second phase.
Toyota Motor Corp, which owns 74 per cent of the equity of the venture, will bring in Rs 444 crore as equity investment in the joint venture company which has an authorised share capital of Rs 600 crore.
The balance Rs 156 crore or 26 per cent of the equity capital will be brought in by Kirloskar Systems Ltd, a group company through which the Kirloskar group is investing in the project.
