Toyota Motors to invest in Rs 300 cr to enhance capacity of its Indian subsidiary

NEW DELHI: Toyota Motors Corp (TMC) will invest Rs 300 crore to enhance capacity of its Indian subsidiary by 60,000 units in the next one year.

Toyota Kirloskar Motors (TKM), the local subsidiary of the Japanese company, will take the cumulative capacity of its two plants in Bangalore to 2.1 lakh units to meet rising demand from the local market.

"We have plans to grow gradually as demand will justify our capacity additions. The major expansion will be for our Etios sedan and its yet-to-be-launched hatchback model Etios Liva. In case, the local demand outstrips our capacity projections in the domestic market, we may accelerate our expansion for the Indian customers," TKM's MD Hiroshi Nakagawa said.

These expansion plans comes after the parent TMC plans to have larger focus on emerging market including Asia and projects a larger chunk of sales from such markets. The world's largest car maker, by sales, Toyota is looking at 50% of its future sales coming from Brazil, Russia, China and India (commonly referred as BRIC) and other emerging markets.

"Fortunately we have a huge booking backlog for Etios and other cars that stretches up to six months in different cities and towns of India. But even after successive expansions in place to make deliveries faster to customers, we have not able able to bridge the demand-supply gap. We will expand in stage to narrow down the gap in next few months," Nakagawa added.

Toyota's India sales grew 31% to 74,362 units in the April-February months, which gives it around 3.5% market share of the 2.2 million Indian passenger car sold in the same period.

The company also plans to start exporting cars from India, primarily Etios to similar emerging market in near future, though is has not frozen any exact countries for shipment. Currently its entire production is targets Indian customers only.