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K. Giriprakash

Bangalore, Oct. 31 Toyota Motor Corporation (TMC) is learnt to be in talks with its joint venture partner in India, the Kirloskar Group, for equity infusion into the Rs 2,600-crore compact car project which is being developed in its plant near Bangalore.

Sources in Toyota-Kirloskar Motor (TKM) Company told Business Line that TMC, which holds 89 per cent stake in the joint venture, will pump in about Rs 500 crore for the new project — code named 800L — as its equity while the Kirloskar Group will have to pump in Rs 55 crore as it holds 11 per cent stake in the company. The rest of the amount will be through internal accruals.

TKM’s Vice-Chairman, Mr Vikram Kirloskar, had earlier said that his group will bring in its share of funds if required. Sources said that the construction of the new plant is going ahead as planned.

The new plant will have a capacity to produce 1 lakh cars a year. TKM plans to roll out the new car by 2010. The joint venture will first produce the sedan version of the new car and follow it up with a hatchback within six and eight months after the launch of the sedan.

The new plant will be equipped with a flexi platform which will enable the company to produce different types of cars. The diesel version of the car will have a bigger engine. After the launch of the car in India, a similar model is expected to be manufactured in Brazil as well as in Russia and China.

The new plant is expected to generate 2,400 more new jobs while vendors are expected to invest a total of about Rs 250 crore for the plant. Once the total production of both the plants crosses 2 lakh units, the company may consider manufacturing engines as well.

Meanwhile, sources in TKM said the company is set to recall 13 suspended employees who are expected to rejoin the factory by November 15. These employees were suspended after a strike disrupted the work at the factory a few years ago.

TKM generated revenues of around Rs 3,600 crore during 2007-08, which was nearly 24 per cent more than the previous year.

More Stories on : Outlook | Cars

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