Toyota to invest $ 500-700 mn in India

Toyota to invest $ 500-700 mn in India
AGENCIES

Bangalore, March 17: International automobile major Toyota today said it had plans to invest between US $ 500 million and 700 million in India, but ruled out introducing a small car in the country for the present.

Toyota Kirloskar Motor Ltd (TKM) today officially opened its manufacturing plant at Bidadi, near here, which has an initial authorised capital for its first phase of operation of Rs 700 crore ($ 170 million).

The plant was inaugurated by Karnataka Chief Minister S M Krishna and Honorary Chairman of Toyota Motor Corporation (TMC) S Toyoda. TKM is a joint venture between TMC of Japan and the Kirloskar Group, manufacturer of industrial engineering equipment.

At a news conference later, senior company officials said during the second phase of the plant, expected to commence by 2003-2004, an additional investment of between $ 500 and 700 million has been planned.

Asked if Toyota has any plans to introduce a small car, Toyoda said the company would for the present concentrate on production and sale of its multi-purpose vehicle, Qualis, launched in India in January. ``Other models later,'' he said. ``We are studying what to do next. Production volumes of Qualis will be increased, and the plant will soon have two shifts.''

Managing Director of TKM, Sachio Yamazaki, said Qualis was available at prices ranging from Rs five lakh to Rs eight lakh and ``it included middle-class.''

Asked if the company was thinking of a price cut on Qualis, as the response to it was more than expected, Yamazaki said ``rather than price cut, the company is considering to increase the price of Qualis even as continuous efforts will be made with regard to customer satisfaction.''

He said the company did not have export plans for Qualis now, but in future efforts would be made not only to export finished products but also components from the Bidadi plant. To a question, Yamazaki said the equity of the Kirolskar group had come down to 11 per cent from the earlier 26 per cent as the latter had said there would be a delay in payment of increased capital, which had later been paid for by TMC.

But the Kirloskar Group would buy back the equity by 2004 and the original equity structure (74:26) would be restored, he added.

Vice-Chairman of TKM, Vikram S Kirloskar, said the plant had an installed capacity of 50,000 units per annum. Initially, 25,000 units would be produced per year and the volume would increased later depending upon the market response. "The company has so far registered 8141 bookings for Qualis, and 2326 Qualis had already been delivered," Kirloskar said.

The plant is located on a 429-acre site. Among those present at the inauguration were Japanese Ambassador to India Hiroshi Hirabayashi and Karnataka's Large and Medium Scale Industries Minister R V Deshpande.