The Hindu Business Line : Fresh equity infusion to be divided between partners

Bangalore, April 11 With fresh investments being made in the new Toyota small car project, the Kirloskar Group, the joint venture partner of Toyota Kirloskar Motor, may have to contribute its share of the funds.

While a senior official of the joint venture told Business Line that most of the funds will be through internal accruals, any fresh equity infusion will have to be divided between the joint venture partners. In this case, Toyota Motor Corporation will have to contribute 89 per cent of the total equity funds and the rest will have to be contributed by the Kirloskar Group. Toyota and Kirloskar Group hold 89 and 11 per cent respectively in Toyota Kirloskar Motor. In case the Kirloskar Group does not contribute its share, its stake in the joint venture could go down.

Meanwhile, sources in Toyota Kirloskar Motor said that the joint venture will produce a series of cars between 1.2 litre and 1.5 litre engine capacities and these cars will be both in hatchback as well as sedan versions. The cars will be both in diesel and petrol versions. The first car is however likely to be the 1.2 litre version which will be followed by other models. The joint venture also plans to export the cars produced in its Indian factory later.

Sources also said the joint venture will provide up to 25 acres in its plant at Bidadi for the vendors to set up a suppliers’ park. With the transfer production of Corolla to the new plant, the existing plant is likely to produce vehicles like pick-up vans on the Innova platform. The current capacity of the existing plant which mainly produces Innova is about 65,000 units per year.

The new Corolla model, will however be produced in the existing plant till the new plant is set up. The current Corolla model was launched in 2002 and the new version is expected to hit the market sometime towards the end of this year. Toyota Kirloskar Motor had earlier announced that it expects to capture 15 per cent of the total Indian car market by 2015 and its sales to grow to around 6 lakh units by that time. The joint venture has so far invested about Rs 1,500 crore into its existing plant out of which Rs 600 crore was for manufacturing Innova multi-purpose vehicle.

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