The Hindu Business Line : Toyota Kirloskar wipes out accumulated losses

Japanese carmaker Toyota Motor Corporation's Indian operations have finally turned around the corner after wiping out the entire accumulated losses of its joint venture, Toyota Kirloskar.

Sources close to the company told Business Line that Toyota had set a target of wiping out accumulated losses within the first six years of the joint venture's operations in India.

This has been achieved with the accumulated losses estimated to be between Rs 200 crore and Rs 300 crore being wiped out and the joint venture posting a small profit of around Rs 20 crore.

Toyota Kirloskar has also achieved its highest ever turnover since its inception by posting a turnover of around Rs 4,000 crore, an increase of 26 per cent over the previous year.

In volume terms, the company posted an 8 per cent growth. Toyota Kirloskar sold a total of 46,348 vehicles including 36,547 Innovas and 8,866 units of Corolla in 2005-06.

The total investment in the joint venture is around Rs 1,200 crore.

The increase in turnover, which was around 26 per cent more than the previous year, was achieved because Innova is higher priced than Qualis, which was phased out in 2004. Toyota has invested around Rs 700 crore for the manufacture of Innova, which is based on the IMV (international multipurpose vehicle) platform.

This project relies on global production and supply bases which are all based outside Japan. India being a key country for the IMV project, it supplies manual transmission parts for all the IMV-based vehicles.

The Philippines is the only other country, which also supplies manual transmission parts.

The diesel engines for the platform are sourced from Thailand and petrol engines are sourced from Indonesia.

Toyota Kirloskar has produced more than 2 lakh vehicles in its factory near Bangalore. While the production of 1st lakh was achieved in four years (1999-2003), production of the second lakh was achieved in less than half that time (2003-2005). This has been a result of Toyota stepping up its production capacity at the Bidadi plant from 20,000 units to 60,000 units last year.