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K. Giriprakash

Bangalore , March 4

TOYOTA'S operations in India are turning out to be highly successful for the parent with the subsidiary expected to wipe out its accumulated losses nearly six months before it is due while the company is expected to post a 15 per cent increase in turnover during the current fiscal.

Sources in Toyota-Kirloskar told Business Line that the Indian operations might wipe out its accumulated losses nearly six months before March 2006, the date it had targeted earlier.

The passenger car major is also expected to post an increase in turnover of about 15 per cent to Rs 3,100 crore during 2004-05. Company officials had last year said that the turnover is expected to grow 10 per cent this fiscal from Rs 2,700 crore posted in 2003-04.

Sources said that the newly-launched Innova, based on the international motor vehicle platform, has received an extremely good initial response. Within a few days of its launch, its bookings have crossed over 5,000 units. Toyota officials expect Innova's sales to cross its target of over 56,000 units for the entire year, within a few months itself.

If such a situation arises, Toyota may have to review its expansion plans. A year ago, the company underwent a capacity expansion from 45,000 units to 60,000 units in phases. It invested about Rs 130 crore for expanding its capacity.

Toyota hopes to have a total capacity of about 2 lakh units by 2008, as per its projections of capturing 10 per cent share of the passenger car market in India. The company is also expanding its workforce which now stand at about 2,500 employees. It hopes to expand its workforce by 5 per cent every year. Toyota expects to launch a small car in its attempt to reach its projected target of 2 lakh units by the end of this decade.

Sources said the company's robust financial performance is largely because of the good response for its products such as Corolla, Camry, Prado and the recently-phased out Qualis and innovative manufacturing practices such as just-in-time and strong financial discipline.

They said that the automobile companies in India work on extremely thin margins of between two per cent and three per cent and hence it was necessary to follow stringent financial norms.

Toyota-Kirloskar invested about Rs 700 crore for Innova during the last six-eight months. In 2003-04, it invested about Rs 80 crore for vehicle upgrades and other activities.

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