Toyota to Produce Low-Cost Car in India

Tokyo, Apr 13, 2008; Toyota Motor Corp. last Friday announced plans to start producing low-cost cars in India in 2010.

The Japanese auto giant will build a new production facility at the site of Toyota Kirloskar Motor Private Ltd., its vehicle-manufacturing joint venture in Bangalore, southern India, at a cost of 35 billion yen.

The new facility will produce a total of 100,000 units of the low-priced model and the Corolla car a year for the time being. The facility will expand production if demand proves strong, Toyota officials said.

The new low-cost car will be both for sale in India and exports, the officials said.

Toyota, which has been lagging behind other automakers in the Indian market, aims to rev up its operations in the country through the launch of the new model.

Toyota started auto production in India in 1999 through Toyota Kirloskar Motor, which is owned 89 pct by the Japanese firm and the rest by India's Kirloskar Group.

Toyota Kirloskar Motor is capable of making 60,000 vehicles a year. It produced a total of 52,000 units of the Corolla and the Innova minivan in 2007.

Auto demand has been increasing rapidly in the so-called BRIC countries of Brazil, Russia, India and China on the back of their expanding economies.

Competition is particularly fierce in India, where Tata Motors Ltd., under the aegis of Indian conglomerate Tata Group, unveiled its Nano ultracheap car in January.