Tokyo / New Delhi: The world’s second largest auto maker, Toyota Motor Corp., or TMC, doubled planned investment in its second car factory in India, as it prepares to introduce a new low-cost small car to challenge Suzuki Motor Corp.’s dominance in the country where economic growth is spurring demand.
The company will spend an additional 33 billion yen ($334 million or Rs1,576.48 crore) for equipment to build the compact car, bringing the total investment to 68 billion yen, Toyota said on Wednesday.
Toyota had in April said it planned 35 billion yen for buildings and other basic factory equipment at its second plant in Bangalore.
Expanding: The Toyota car plant in Karnataka. The new plant will open in 2010 and have an annual capacity of 100,000 vehicles. Hemant Mishra / Mint
The new plant, being constructed by Toyota Kirloskar Motor Pvt. Ltd (TKM), will open in 2010 and have an annual capacity of 100,000 vehicles.
It will produce the Corolla sedan and the low-cost small car, developed specifically for emerging markets, Toyota said in April.
The company’s “strategic small car” is scheduled to be launched by 2010-11.
“TMC is expanding its local production in India and is actively investing to create attractive products. Its policy is to continue to contribute to the development of India’s automotive industry and to the country’s overall economy,” the company said in the statement.
Once production begins at the second plant in 2010, the two plants would have a combined annual production capacity of 1,60,000 vehicles.
The company’s announcement comes at a time when the Indian automobile industry is going through a rough time with passenger car sales during April-September period registering only a 5.39% growth. The segment grew by about 12% in 2007-08 fiscal year.
TKM is a joint venture between Toyota Motor Corp. and Kirloskar Group, where the Japanese firm holds 89% stake and the Indian company holds the rest.
(PTI contributed to this story.)