The Hindu Business Line : No change in India investment plans: Toyota

The Japanese auto major is inclined to cut capex between 30 and 40 per cent, but its Rs 3,200-crore second plant at Bidadi, near Bangalore, is untouched, according to Mr Hiroshi Nakagawa, Managing Director, Toyota Kirloskar Motor India, Toyota Motor Corporation’s Indian subsidiary.

The new plant will have an installed capacity of one lakh cars and primarily meant for producing the compact car that the company is planning to roll out in 2010.

Speaking to Business Line on the sidelines of the inauguration of express maintenance service at its dealership Lanson Toyota, Mr Hiroshi Nakagawa said Toyota Motor Corporation is reviewing the investments it planned for greenfield and brownfield projects across the world due to tight credit and deepening consumer uncertainty resulted in auto sales witnessing severe beating.

To boost profitability

(According to a recent report in the Western media, Toyota Motor Corporation has set up an emergency committee chaired by the President, Mr Katsuaki Watanabe, to look at options to boost profitability over the next few months. Other measures include delaying new factory launches and cutting on development spending.)

“Toyota considers India as one of the promising emerging markets despite the current slowdown.” Beginning third quarter, auto sales are hit across all vehicle manufacturers in India. Toyota Kirloskar witnessed a drop up to 50 per cent in last two months.

However, Mr Nakagawa is confident that the market will recover from the second half of next fiscal year. He hopes that the new car will help Toyota’s market share to go up from three per cent now to 10 per cent by 2015.

Belt tightening

While the captains of North American Big three often meet with the US Congress with their hats in their hands seeking bailout packages, Japanese counterparts are tightening their belts to keep their nose above water adopting different strategies.

For the first time in a decade, Toyota is slashing the bonus for the second half of 2008 by about 10 per cent for middle and senior managers. Industry sources said that more than 7,500 people will get affected due to this action.

The second largest car maker in Japan, Honda, on its part, has pulled out of Formula 1 racing as it wanted to focus on its core business against the backdrop of global economic slowdown. The Honda Chief Executive Officer, Mr Takeo Fukui, recently announced that the company was unable to continue backing an F1 team because of the tougher economic times.

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