The Hindu Business Line : Small car project spells changes to Toyota structure

THE present structure of Toyota in the country is set for a change as it embarks on its small car project. Sources close to Toyota Kirloskar Motor Company (TKM) told Business Line that there could be three different entities in the country — two manufacturing joint ventures and an independent marketing arm. The latter will only market and sell the vehicles and outsource the manufacturing to the two joint ventures.

Daihatsu plans: Daihatsu is expected to float a venture with Toyota Motor Corporation to produce small cars while the other venture will make cars like Innova and Corolla. There is also another option being considered which is that of Daihatsu picking up equity in TKM itself.

It was earlier reported that Daihatsu may invest around $90 million to manufacture a small car for India by 2007.

The small carmaker plans to make one lakh cars a year in the country. The proposal to set up a separate plant for manufacturing the small car is currently with the Karnataka Government for clearance.

Warehousing: In another development, Toyota Kirloskar Motor Company is pumping in up to Rs 100 crore to expand the warehousing capacity which is expected to last till 2015. The current capacity of the warehouse can last only for another three years. Hence, most of the capital expenditure worth around Rs 100 crore earmarked for this year will go towards expanding the warehousing capacity.

Sales: Passenger car sales in India rose 17 per cent to 1.06 million units in 2004, but Toyota has less than 5 per cent share in the market. It expects to double its share by 2010 and by 2015, grow it to 15 per cent. Most of the growth will be through the volume-driven small car project. Small cars account for more than 70 per cent of overall passenger car sales in India.

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